We handle cases across the United States. Allen Stewart is licensed to practice law in Texas, California, New York, Pennsylvania, Missouri, North Carolina, Ohio and Arizona.
What happens to a lemon car after it is brought back?
As a vehicle owner, the last thing you want to deal with is a lemon. The vehicle doesn’t run as expected, you are out the money and time spent to find the problem, find the right resolution and get it fixed – or have it repurchased or replaced by the manufacturer.
In a case with a happy ending for the auto owner, i.e. the vehicle is replaced by a working model or is repurchased by the manufacturer so you can find a better vehicle to transport you to and from work, you may wonder what happens to the vehicle once it’s back in the hands of the manufacturer.
In the event that the manufacturer reimburses the vehicle owner for the vehicle and takes the vehicle back, there are certain criteria to meet in order to put the vehicle up for sale again – in some states.
While the ideal situation would be the vehicle would not be put up for sale again to plague another owner, the manufacturer is concerned with the bottom line, and that means making money off of the vehicle whether it runs in a satisfactory manner or not.
The truth about repurchased lemon vehicles
Sadly, the possibility a vehicle is a lemon is not a rare occurrence. In fact, thousands of vehicles are repurchased by the vehicle manufacturers across the US each year. That’s right, thousands in a single 365-day span.
This means there is a greater chance of purchasing a lemon – without the warranties that ensure the Lemon Law is on your side – than you might expect.
Manufacturers purchase these vehicles from the owners and may – or may not – fix them before putting them on the lot in hopes of selling them once again. The titles for lemon vehicles are not always labeled to inform the new owner of its status.
Each of the 50 states has its own law regarding minimum standards for repairs related to warranties. In some states, those vehicles end up with a special title. In other states, there is no notification to a potential buyer that the vehicle had an issue that required multiple attempts at repair. Likewise the potential new owner may not realize that the defect was never fixed in a satisfactory manner.
Fewer than one-third of US states require the title to be marked when a vehicle is repurchased. Also, a common tactic is to transfer a car with a defect from a state that requires the title be marked when a defect exists to a state where title marking is not required.
Most dealerships have demo cars, or demonstrator vehicles. These vehicles tend to have high mileage on the speedometer (anywhere from 1,000 to 6,000 miles). This is due to the fact customers take them for test drives or employees use them for a short time as their daily driver vehicle. Either way, these vehicles have more road miles under the tires than a brand new vehicle that sits on the lot.
The positive side of purchasing a demo vehicle, if that is a route you are considering, is that these vehicles are not pre-owned or used. Therefore, they are covered by law and typically some type of warranty. These vehicles are less likely to leave you dealing with a lemon on your own.
In fact, under the Texas Lemon Law, the consumer is covered on a limited basis when purchasing a demo car. The criteria of the lemon law still need to be met in order to consider the vehicle a lemon and pursue compensation or replacement of the vehicle. However, that route is possible if you discover your newly purchased demo car has a significant, driver endangering defect.
In Texas, A rebuilt vehicle carries a “prior salvage” or “rebuilt salvage” title.
This comes from the fact the vehicle was in a condition to be considered salvage worthy, but then someone opted to rebuild the vehicle to be road worthy.
A rebuilt vehicle must pass safety and anti-theft inspections, and other state-mandated standards in order to return to the road.
A Texas title will include the “Rebuilt Salvage” brand and can be any of three categories: Rebuilt, which is mentioned above; Prior Owner Retained, which means the vehicle was branded owner retained and then sold; and Prior Non-Repairable/Repaired, which shows the vehicle previously was destroyed or considered totaled but was repaired to a drivable condition.
When purchasing a vehicle with these titles, it is important to remember that there are no warranties from a manufacturer to cover these vehicles. If you purchase said vehicle and run into an issue with the vehicle that prevents you from driving it, that issue will be yours to fix with no assistance from a dealer or manufacturer.
A vehicle with such a distinction on the title will not be covered under the Texas Lemon Law because it is well beyond any possible warranties it was sold with originally.
For those who are on the hunt for a new vehicle, it pays to be aware of the coverage provided by the Texas Lemon Law. Likewise, it is good to know what to do when purchasing a vehicle.
Remember to look over the vehicle carefully and take it for a test drive. If possible, have a professional look over the vehicle for you as well. Look for any telltale signs the vehicle has been in an accident, and ask questions about anything that does not look optimal about the vehicle. Don’t be afraid to walk away if the salesman cannot answer your questions to your satisfaction.
In the event that you have purchased a new vehicle or a used vehicle still covered under warranty, it pays to keep track of any issues that arise. Keep receipts and a written documentation of any repair attempts.
If the vehicle is out of commission for 30 days or more (and you don’t receive a loaner vehicle), then it is considered covered under the Lemon Law. This must occur within the first 24 months or 24,000 mile following the purchase of the vehicle.
The issue with the vehicle must lower the value of the vehicle and put the driver and any passengers at risk when traveling in the vehicle. It cannot be a cosmetic issue. Likewise, it cannot be an issue caused by an aftermarket installation. It must be something significant with the vehicle’s original parts, the ones it had installed when it was purchased from the dealer.
Reach out to the manufacturer and make sure they are aware (do this in written form and with Certified Mail) that you are having trouble with a vehicle.
Research the process of filing a complaint under the Texas Lemon Law as well. It requires filing a complaint and paying a fee. It will require the attendance of a hearing, as the manufacturer must be permitted to plead their side of the case as well.
Also, in the event that the vehicle is determined to be a lemon, the outcome will be determined by the examiner officiating the hearing. The replacement, repurchase or repair of the vehicle will be decided by the examiner, not the vehicle owner.