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Beware of lemon car buybacks

Last week we provided a primer on lemon laws that can help you get either a replacement or refund for a new car that has persistent, apparently unrepairable problems.

While all 50 states have lemon laws and there is an umbrella federal law covering owner rights in pursuing warranty complaints, there's still a part of the process that gets little notice: What happens to those cars that are determined to be lemons?

It might be reasonable to assume that they are disassembled and crushed by the manufacturer, since they've already been determined to be unrepairable. But that isn't what usually happens.

The cars are often resold to other buyers, who may not be aware that the car is a lemon.

Manufacturers say that when they buy back a lemon, they fix the problem before sending it to a dealer auction and that paperwork is done to identify the vehicle as a "lemon buyback," much the way vehicles decaled total losses by insurance companies are supposed to be branded as "salvage."

But fewer than half the states require that lemon buybacks be designated as such on their titles. And even when a car is labeled a lemon, that designation can conveniently be lost if a car is sold in a state other than the one where a lemon law case was pursued.

The New York Times, citing a study by Esperian Automotive of 1,000 Florida cars that were bought back as lemons, reported that more than half the vehicles were re-titled out of state and nearly all of them failed to have the buyback warning attached.

Because many states don't have lemon law protection for used car buyers, those who unknowingly purchase a buyback vehicle may believe they are simply stuck with a bad car.

So how can consumers protect themselves?

Well-known services such as Carfax.com or Autocheck.com can offer some protection against unwittingly buying someone else's lemon, but even those services sometimes miss a buyback car or are misled by the laundering of a car's title.

One way to check on a car's repair history is to take its vehicle identification number to a dealer that services that make and ask them to run it through their computer database.

Manufacturers keep a national record of a car's warranty service history, which should reveal that a vehicle was serviced multiple times for the same problem and was ultimately bought back.

If you find that you've bought a vehicle that showed a clean title but in fact was a lemon law buyback, contact the dealer that sold you the vehicle as well as your state's consumer fraud division.

Sometimes the selling dealer may not have known the vehicle was a buyback, sometimes there may be deliberate fraud. In either case, you may be entitled to compensation or a buyback of the vehicle.

Too bad there's no assurance that even a twice-recycled lemon won't pass into other, unsuspecting hands.

This week
Beware of lemon car buybacks
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