Buyer beware: Lemon laws


Picture it. You’ve spent all morning walking the car lots, looking for a model you can afford when you spot the luxury vehicle of your dreams. You know you can’t afford it and you’re about to pass it by when just for fun you take a look at the dealer sticker. Wow! The sale price is way less than you thought. Wow! You really can afford this vehicle. Wait a minute. Take a closer look at the dealer sticker. The vehicle is a lemon law buyback. Uh-oh!

Lemon law buybacks are vehicles purchased new and returned to the dealer due to issues. In most cases, the buybacks have undergone extensive repairs, which either did not correct the situation or made it worse. By law, manufacturers have to buy back any new car that turns out to be a lemon in order to allow the owner to purchase a more reliable car.

Ideally, manufacturers would repair lemon law buybacks before putting them back into the hands of dealers, and if they didn’t, the dealers would. Unfortunately, that isn’t always the case. By law, neither manufacturers nor dealers are obligated to resolve the issues with lemon law buybacks. If the repairs are too difficult or expensive to make, they may leave the cars as they are.

Fortunately, dealers are required by law to disclose any issues with lemon law buybacks to potential buyers. However, to ensure they get the full story, buyers should ask for a detailed report of the buyback’s problematic history. Honest, credible dealerships will not hesitate to supply buyers with the information.

Because of the potential problems with lemon law buybacks, warranties are not usually offered. And, original warranties generally do not apply. Most manufacturers rescind those as soon as they buy back the vehicle. In most cases, the lemon law buyback is sold as is and the buyer must deal with whatever comes — no warranty, no protection and no refund. Should a buyer be lucky enough to get a warranty, they should read through it carefully so they know what is and is not covered.

While there are laws protecting buyers whose new cars turn out to be lemons, there may not be such protection for used cars. Laws vary by state, but most do not offer any protection for lemon law buybacks. Manufacturers and dealers will not be a source of help either. The problems were disclosed to the buyer; therefore, they are on their own.

While that luxury lemon law buyback might be appealing, you should think through the decision to purchase it carefully. Make sure you get a legitimate vehicle history report and a copy of the previous owner’s statement and review them carefully. Then, arrange to have a qualified mechanic inspect the car before you buy it.

That way, you will know for certain what is wrong with it and whether you are prepared to deal with the issues. Should you decide to take the plunge, ask the dealership for a warranty. If they feel like the lemon law buyback is a good deal and are secure in selling it, they will offer you a warranty, even if it is for a short time.