Lemons, Not Lemonade

By Lauren Baumbauer

August 21, 2009 5 min read

When you have lemons, make lemonade -- or so the saying goes. It may be tried and true for some of life's roadblocks, but not every sour situation has such a sweet outcome.

When it comes to buying a car and finding out it's a lemon, the circumstances result in more than just a bad taste in the mouth. How do you know if you have a lemon, and what can you do about it if you do? How do you avoid buying one in the first place?

A lemon, purely as it relates to cars, is "a vehicle that has a defect that cannot be repaired within a reasonable amount of time or amount of repairs," according to Marshall Meyers, managing partner for Weisberg & Meyers, a law firm specializing in lemon law litigation headquarted in Arizona.

Defects that determine whether a car is a lemon include: considerable problems caused by the manufacturer jeopardizing safety, affecting the market value of the car and the ability to use the vehicle. Recurring brake problems or doors that don't operate properly due to manufacturer error are examples of this.

The owner of a lemon can be compensated with a refund or a car replacement if it is covered under law. It's important to research both state and federal laws to know for sure. "State remedies offer refunds or replacements from use, market value or safety defects, and federal remedies provide cash compensation from diminished value," Meyers said.

Each state has its own rules regarding what qualifies, but generally the car shouldn't be older than 30 months as of the retail delivery date. There are also mileage limitations. For some states, once a car has three repairs for a problem under warranty, it may be fit for lemon territory. It is even possible a used car will be covered.

First, find out what qualifies as a lemon where you live. Carlemon.com provides lemon law summaries and statutes for each state, as well as information on the Federal Magnuson-Moss Warranty Act, enacted in 1975, which "makes breach of warranty a federal law." If the car doesn't qualify as a lemon in your state, the site lays out other resources that will help.

Meyers recommended documenting all repairs in order to have a case. "If you have a problem you can't fix, bring it in for repairs and keep records," he said. "That's the purpose of a warranty -- to help repair your car."

Make sure all documentation is accurate and the problems written by both the vehicle owner and dealership are detailed and consistent. Keep all logs of repairs or random breakdowns, noting mileage and exactly what happened. These are the basis of determining and filing a car as a lemon. The owner needs to be in charge and aware of what is documented.

"You must describe an unfixed defect the same, each time you take the vehicle in for repair, and you must make sure that your complaint is written on the repair order," states carlemon.com. It also offers a vehicle repair log with detailed sections to fill, from price and odometer readings to problem descriptions and vehicle information.

After documenting the car's repair history, an informal dispute resolution through the manufacturer is an option a consumer may take. However, according to Steve Solomon, author of "The Good, the Bad and the Rest: State Lemon Laws and Protection for Consumers," from the journal of the American Bar Association, "The major criticisms of manufacturer-funded dispute programs are that they are comparable to the 'wolf guarding the chicken coop,' and that the results are more protective of car makers than of the consumer."

Alternatively, you may consider hiring an attorney who works on lemon law cases and taking the manufacturer to court. The attorneys are paid by the manufacturer, not the consumer, so they have the consumer's interests in mind. Take advantage of consultations. Some websites provide resources to find attorneys for each state, such as lemonlawyers.net.

Always be aware of state Lemon Laws before purchasing your next vehicle. Some states don't honor leased vehicles or have lemon laws that are more business friendly as opposed to consumer friendly. Make sure a used car dealer provides a CARFAX report and documentation alerting the consumer about a lemon car.

Pay attention to anything that seems "off." If it's a new car with low miles at a used car dealership, it may be a lemon. As Meyers said, "If it's too good to be true, it probably is."

If you pay attention before your next car purchase and keep detailed documentation of repairs, your lemons may turn into lemonade after all.

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