March 4, 2011

Used Car Lemon Law

Lemon laws protect new car buyers in every state in the nation, but it's far more common for used car buyers to get stuck with an unreliable vehicle, or to incur repair bills that cost more than the car. For such unfortunate consumers, it often goes downhill from there.

Owners of lemons, as these cars are often called, must still make car payments while their vehicle sits idle. One-sided arbitration clauses — built into practically every dealer's vehicle sales contract — work to keep many used car buyers from taking a case to court. Finally, a buyer may have to prove that the vehicle's problems existed prior to the sale in order to get some compensation. These factors plus the subject's complexity leave many American consumers in the lurch.

"Many of these cars are dangerous to drive," according to John Van Alst, used car fraud expert with the National Consumer Law Center. "Even if not, when a car becomes inoperable, it becomes a liability instead of an asset."

Although it's not always the case, some of these used lemons are sold fraudulently, such as when a dealer fails to disclose the vehicle's history, misrepresents the vehicle title or tampers with the odometer. Often, these dealers prey on the most vulnerable, low-income segment of the population.

A New Twist: Used Car Lemon Laws

The frequency and severity of consumers' used car problems has led some state legislatures to pass new laws. Currently, though, only six states, Connecticut, Massachusetts, Minnesota, New Jersey, New Mexico and New York have lemon laws on the books. The laws provide a statutory used car warranty, often based upon the age or mileage of the vehicle. If the vehicle exhibits problems during the warranty period, the dealer is given a chance to repair them. If those fixes don't work after several tries, the dealer usually must either replace the car or refund the buyer's money.

At least seven states have some other form of used car buyers' rights, requiring used car warranties or setting minimum standards for the sale of used cars: They are Arizona, Connecticut, Illinois, Maine, Nevada, New Mexico and Pennsylvania. Still other states, including North Carolina, have an Unfair and Deceptive Practices statute that can be invoked. But only those states with true used car lemon laws require the dealer to provide a replacement or refund for your car..

[via edmunds]


Post a Comment