Are you thinking of buying a new car? Are you considering purchasing a used or pre-owned car off a Craigslist posting? What are ‘lemons’ (the problem cars) and how to avoid them? If you are in the market for purchasing a new or used car you should be aware of the term ‘lemons’**. According to the Merriam Webster’s online dictionary, a ‘lemon’ is an automobile that is unsatisfactory or defective. This means that a ‘lemon’ car is an automobile that does not work well most of the time. What can be wrong with a new or old car? Read the following issues that may arise if you purchase a new or used ‘lemon’ car. This will help you to make the correct purchase decision.

New Lemon Cars

New cars purchased from a car dealer may have mechanical or technical flaws. More than often these flaws are not noticeable at the time of purchase (or even test rides). Some of the common examples of such manufacturing flaws are defective tires, defective seatbelts or airbags, defects on gas and/or brake pedals, etc. There can be a defect in any part of the vehicle design and such defects are never visible to the naked eye until the vehicle is used for some time.

Old or used Lemon Cars

Old or used cars can have any of the flaws discussed above. However, buyers of used cars face an additional risk of getting a car that may have been poorly maintained by the first owner. The seller may have abused the car or skipped the service appointments. The seller may be trying to pass on a car with inherent defects. There is no way of telling whether a used car is good or bad.

California Lemon Law

If you think that you have a lemon car and have confirmed reason to believe that the car is not getting fixed after many attempts you should read the federal Lemon Law. In California, the California Lemon Laws and the federal Lemon Law (the Magnuson-Moss Warranty Act) are applicable and provide for compensation to California consumers. The law covers a large array of RVs, boats, automobiles, trucks, and computers and other consumer appliances and products. This is how the law works in case of new and used cars:

  • To qualify under the California Lemon Law or the federal Lemon Law for a new car, you must have evidence to prove that the car has been repaired many times under the manufacturer’s factory warranty and is still not working properly. You can be eligible for a refund, replacement or cash compensation.
  • To qualify under the California Lemon Law or the federal Lemon Law for a used car, you must have explicit written warranty in any one of the following forms:
    • the balance of a manufacturer’s warranty when purchased from an individual car owner
    • A limited warranty given by the dealer
    • An extended warranty or service contract you purchase from the dealer at the time you purchase the vehicle
    • Proof that the vehicle has been repaired more than once and is still not working properly

If you do not have a written warranty as mentioned above, it will be difficult to get any compensation for a used car as most cars are sold in ‘as-is’ condition.
It is a good idea to understand the concept of ‘lemon’ cars before buying a car. First, it will help you to be cautious during the purchase procedure. Second, if purchase a ‘lemon’ car you will know that there are laws, rules, and regulations to protect you.

**George A. Akerlof coined this term in a paper titled “The Market for ‘Lemons’: Quality Uncertainty and the Market Mechanism”