Lemon Laws: Can You Apply for a Lemon Car Buyback?

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A car may qualify as a "lemon" if it has a serious defect or malfunction that the manufacturer can't or hasn't been able to repair after a reasonable number of attempts. The Magnuson-Moss Warranty Act is a federal law passed in 1975 that governs warranties presented to consumers in the United States, including those covering automobiles. On top of that, all 50 states and the District of Columbia have some sort of lemon law that covers automobiles. 

Jump to:
What is a lemon car?
Do used cars qualify for lemon law protection?
What should you do if you have a lemon car?
What do I get if my car is bought back as a lemon?
What happens to a lemon that is bought back by the manufacturer?
Should you buy a car with a lemon title?

What is a lemon car?

Although laws vary by state, generally speaking, a vehicle with a problem that makes it unsafe to drive and that has been taken into a dealership or qualified repair shop multiple times for that problem without a satisfactory fix in a reasonable amount of time could qualify as a lemon. 

An engine that won't run, a transmission that doesn't shift gears, or brakes that fail to stop a car are all major problems that should be covered under a new car's warranty, and a failure involving one of these vital components could lead to a vehicle that's unsafe to operate, or one that has lost a significant portion of its initial value. In such cases, consumers would be wise to check on their state's lemon law to see if their vehicle qualifies. Problems that don't necessarily affect a car's safety may not qualify a car as a lemon. Difficulties connecting a smartphone to a car's infotainment system are irritating but aren't going to leave a motorist stranded.

In some states, such as Alabama, Colorado, Illinois, Michigan and Ohio, a problematic car is only covered under a lemon law for a year. The time limit sits at two years in other states, including Arizona, Florida and Texas, as well as the District of Columbia. Maine's lemon law covers vehicles for up to three years, and in New Hampshire, a vehicle is covered under the state's lemon law as long as it is under warranty. In addition to the amount of time the vehicle has been owned, most states include a mileage limit, often capped at 12,000, 18,000 or 24,000 miles.

The number of times that a manufacturer can attempt to fix a defective automobile also varies from state to state, with most states specifying either three or four unsuccessful repair attempts in a specified amount of time before a vehicle may qualify as a lemon. The Center for Auto Safety, an independent nonprofit consumer advocacy organization, maintains a list of lemon laws by state and assigns grades to each state. New Jersey and Washington are the only two states to get an A grade, while Missouri, Louisiana, North Dakota, Colorado, and Illinois get the lowest F grade.

Do used cars qualify for lemon law protection?

It's not uncommon for used cars to be sold "as is, where is." In other words, there is no warranty covering the used vehicle, and if you have any problems, you may very well be on your own. Some states, however, do have some consumer protection laws that cover used vehicles. Arizona, California, Massachusetts, Michigan, Minnesota, New Jersey, New Mexico, New York, Rhode Island and Vermont have some sort of used-car lemon laws, but they can vary significantly in what they cover and for how long.

Because a used car purchase inherently carries more risk than buying new, used-car shoppers should do their homework before deciding to make a purchase. A look at the vehicle's title and maintenance history via a vehicle history report will give prospective buyers useful information, including whether or not the vehicle has ever been in an accident, whether it's been repaired or rebuilt, and even if it's been bought back by the manufacturer as a lemon. It's always a good idea to take a thorough test drive of any used car you're considering, and if you're not completely satisfied that everything is in good working order, consider taking the vehicle to a qualified mechanic for a checkup or prepurchase inspection.

What should you do if you have a lemon car?

First and foremost, you should never drive a car on public roads if you think that it is unsafe to operate. In the unfortunate event that you become stranded with a car that won't run or isn't safe to drive, it would be wise to record the date, time and mileage. Keep track of the time you had to wait for assistance, as well as all the times you had to rent a vehicle because yours was out of service.

If you have a problem with a vehicle that is covered under warranty, the first step is to contact the service department at a franchised dealership. Explain the problem you're experiencing, and make sure everything is recorded in writing. Any time you are asked to sign a repair order, make sure to check that the date, odometer reading and description of the issue are accurate before signing your name on the dotted line. Keep all of your records together and store them in a safe place.

Don't overlook your dealership's role in safeguarding you from trouble. If you're concerned that your car may be a lemon, a principled and friendly dealer can make your experience much more pleasant and easy to resolve — or just the opposite. Before buying a car, do some research on the dealership you're contacting. Consider asking the salesperson for the dealer's Customer Satisfaction Index scores from the manufacturer. Research the dealer through the local Better Business Bureau. And check out Edmunds' Dealer Ratings and Reviews.

If you and your dealership can't come to terms on a vehicle's status as a lemon (or not), it may be time to contact the vehicle's manufacturer. Check your state's lemon laws to find out if you need to send a certified letter to the automaker to give it a chance to correct the situation. Automakers such as Ford, General Motors, Honda, Hyundai and Toyota are relatively easy to contact, with customer service departments dedicated to helping owners who have problems. Make sure to document all communication you've had with a vehicle's manufacturer, noting the date and time you were in contact.

Arbitration, offered by organizations like the Better Business Bureau and independent law firms all across the country, is a potential process available to consumers who think that their car is a lemon. You can also get in touch with your state's consumer protection office. If you're not sure what else to do, consider contacting an attorney.

What do I get if my car is bought back as a lemon?

If your vehicle is determined to be a lemon under the law, you are entitled to a refund or "comparable replacement vehicle." That’s defined as either identical or a reasonable equivalent. A refund includes your purchase price, taxes, and the cost of any dealer-installed options, minus an offset for your use of the vehicle, again with variances from state to state.

What happens to a lemon that is bought back by the manufacturer?

Automobiles sold in the United States are safer and more reliable than ever before. Still, thousands of cars and trucks are bought back as lemons every year. Most of those vehicles will eventually be repaired and put back on the market. When that happens, the vehicle's title should be tagged, indicating that it was a lemon buyback car.

Should you buy a car with a lemon title?

Modern cars and trucks are incredibly complex machines, and there's no simple answer for buyers wondering if they should consider a used car with a lemon title. It's possible that a vehicle had a problem in the past that took time to properly diagnose and fix and that vehicle may turn out to be safe and reliable for a new owner. But remember that any vehicle that was bought back as a lemon likely caused a previous owner lots of trouble, and that should be reflected as a serious discount on a used car’s purchase price if it has a lemon or manufacturer buyback title.