Lemon Title on a Vehicle: Explanation, Laws, Covered Defects
In most simple terms, a Lemon Title is a branded title issued to new vehicles with serious defects. The brand remains permanently once a vehicle is deemed a car lemon according to the state's lemons laws. This means that each state has its own criteria for giving a vehicle a lemon status. The general criteria applied statewide is the following:
- A vehicle has a 'significant' or 'substantial' defect
- The defect is covered by the manufactrer's warranty and is revealed within a certain period after purchase, timing is important!
- The defect wasn't reparied after a reasonalbe number of attempts on the manufacturer's side
But specifications, like the 'reasonable number' of attempts, the period of application or what is considered a 'substantial' defect largely depends on the state law. For instance, in some states like CA, the law explicitly says that only vehicles with defective factory components are entitled to the lemon law repurchase, which means that any aftermarket installations won't conform.
When the vehicle is recognized a lemon as a result of a corresponding lawsuit, the manufacturer is obliged to buy the vehicle back from the owner thus compensating the full cost of the vehicle less deductions for the mileage run before the deffect occurred (in actal fact, was reported).
- Damage and total loss incidents are much more frequent than persistent defects in new vehicles
- Acquiring a lemon status for a vehicle and getting the compensation from the manufacturer is a complicated and lengthy procedure in most cases requiring expertize and a lawyer with experience in lemon law cases.
- Due to the previous point, a portion of defective vehicles escape a lemon status, will get into some details below.
- Many defective vehicles do not qualify for repurchasing under the lemon law
Is a Lemon Title Bad?
Not always, here are the reasons why:
- Such vehicles aren't supposed to have sustained any damage, unlike most total loss titles do.
- More than that, lemon vehicles are in most cases new vehicles because the defects are generally revealed quite soon after the start of exploitation.
- The unlucky owner is also interested either is fixing the issue or getting the compensation as soon as possible because, as said above, there will be a deduction for the mileage in the period the vehicle has been used before the complaint. All the more so, why drive with a defect covered by warranty.
- The owner of a damaged or poorly maintained vehicle may simply be unable to win a Lemon law dispute.
- More than that, Lemon Titles qualify for selling again only if the original defect is fixed properly and conforms to warranty. It's a misconception that the Lemon Title voids the warranty and the repaired defective element may get an extended warranty.
- And, finally, title disclosure is always better than repuchasing and fixing a vehicle in a detour of a lemon dispute
A lot depends on how exactly the defect was fixed, replacement of a major part with a brand new one or another way.
Can I sell a Lemon Title Car?
Yes, a vehicle with a lemon title in the history is a roadworthy vehicle because automakers normally resell the repurchased vehicles after fixing them. However, concealing the 'lemon / manufacturer buyback' history from the buyer or attemps to laundry the branded title are illegal. In most states, the seller must disclose the lemon history to the buyer in a written notice.
Can I buy a Lemon Unknowingly? Can Lemon Records be Missing from History?
In certain cases, the lemon dispute may be settled out of the court. For example, the vehicle owner gets a settlement and signs an agreement that the automaker makes the repurchase out of “goodwill.” In this way the buyback satus is never fortified legally and the automakers avoid the obligation to brand the vehicle as a lemon and then resell it with a clean title, possibly without addressing the defect properly.
However, even if any lemon records / titles are missing from the history due to the above scheme, odd ownership changes may provide enough warning to suspect a persistent defect. For example, a relatively new vehicle being registered to a licensed dealer / automaker again after a short period of ownership. Sometimes, you could even see the records of repurchacing the vehicle but without a title brand notes.
Another way of getting stuck with a defective vehicle is buying an actual lemon but without a lemon title from a private seller who decides to sell the defective vehile after a number of attempts to fix it rather than get into the trouble of legal prodedures. It is unlikyly that you win a lemon dispute in this case as in many states, like CA, the lemon law requires that the vehilce be purchased from the licensed dealership in order to be entitled for a buyback. More than that, the lemon law won't apply if there are any signs of abusive driving, unauthorized repairs.
However, repair attempts and the addessed issue may be featured in the vehicle history so you can avoid a sour buy if you study the history carefully.