Buying a Lemon Car: Should You Ever Consider It?
Buying a lemon car can do more than just leave a sour taste in your mouth — it could shrivel your wallet, too.
A lemon car is a new or used vehicle with major problem(s) that surface after you buy or lease it. You might get reimbursed for repairs or receive a replacement vehicle under your state’s lemon law. However, some lemon cars have manageable problems, and that could be good news if you have to hold on to one, or even want to buy one.
We’ll help you learn how to avoid buying a lemon car — or decide if it might be worth the risk.
3 steps to avoid buying a lemon car
It would be tough to spot unforeseen problems with a brand-new car, but there are ways to avoid unreliable used cars.
1. Ask for a vehicle history report
A vehicle history report (VHR) will give you a car’s basic information — whether it has a clear title, for instance — as well as information about its history. You can obtain one yourself for a fee, but many sellers will provide it for free. Here’s what you could expect in a VHR.
While each VHR is different, it should check for title “brands” that could signal a problem with the car. Cars with salvage titles, for example, are often lemon cars. Each state sets its own brand definitions, so it’s a good idea to check with your local motor vehicles department.
Any accident, from a fender bender to a total loss, should show up on the VHR. A report of a minor scrape isn’t cause for alarm, but a major accident that damaged the frame or engine could have caused major problems that persist even years later.
If a VHR lists multiple owners in a relatively short time, that’s a red flag. It could mean previous buyers got rid of the car, rather than repair it, because the problems were costly.
The VHR should show a record of repairs and maintenance, such as oil changes. If the vehicle has needed extensive repairs or hasn’t been regularly maintained with oil changes, it may be worth passing up.
A recall is when an automaker finds a safety defect and offers a free repair. If the VHR shows an open safety recall, the car might not be safe until it has the fix.
2. Test drive and test for red flags
Once a car has passed muster on paper, it’s time for an in-person look. Inspecting the car is probably the best way to avoid buying a lemon car. Hiring a mechanic to give it their professional opinion is a good investment — see the next step — but you can navigate a used car inspection on your own to rule out any clunkers. No special equipment is required, just your senses:
Look. Have another person turn on the car and give it some gas. White, blue, gray or black smoke can all indicate there’s a problem.
Feel. Check the oil and rub a bit between your fingers. You don’t want to feel grit or metal flakes.
Smell. A musty smell could mean interior water damage. A burning or acid smell could mean engine damage.
Listen. Put the car through its paces on the test drive and listen to the sounds it makes. Pinging, knocking, whining and grinding sounds can mean engine and transmission problems.
3. Get a pre-purchase inspection
If a car passes your initial inspection, a professional one is highly recommended. If the mechanic finds problems, you could ask the seller to deduct the cost of repairs from the selling price. A thorough car safety inspection may cost you $100, but it might save much more off the price of the car.
If the vehicle passes all the tests, congratulations: You’ve got a good car on your hands! But don’t stop there — it would be a shame to save money on the car, only to spend more than is necessary on your car loan. You could fill out a single form and receive up to five auto loan offers from lenders, depending on your creditworthiness.
Buying a lemon car on purpose
Deal seekers — dare we say risk takers? — sometimes seek out lemon cars or other vehicles with the branded titles we talked about earlier. If you think that the savings on the purchase price will more than make up for the cost of repairs, this may be a smart move, particularly if you’re handy with cars. But remember, these cars are usually sold “as is,” which means you’re on the hook if repairs turn out to be more expensive than expected.
It’s also possible to buy a former lemon, a car that was once declared a lemon but has since been reconditioned.
In California, for example, automakers must buy back lemon cars — defined as qualifying new vehicles that a manufacturer is unable to repair after a “reasonable” number of attempts. Dealers can later sell these “buybacks” as long as they’re labeled as lemon law buybacks. Buying a lemon car in this situation might put you in a vehicle for much less, if you’re willing to take a chance.
State rules vary
Once again, each state sets its own rules for what qualifies as a “rebuilt” or reconstructed title — we encourage you to be cautious. Usually, a lemon isn’t sour in just one spot: The car may have more, undiscovered issues, or a less-than-honest seller might disguise other problems.
What to do if you bought a lemon car you don’t want
Most buyers probably want to avoid lemon cars altogether. If it happens to you, it may be possible to take the dealer or manufacturer to court or arbitration under your state’s lemon laws — more on that in a minute — but there might be simpler ways to receive reimbursement or get repairs done to your satisfaction.
Talk to the seller
Tell them about the car problems you’re having and see if you can come to an agreement. In the best-case scenario, the car may still be under warranty, or the seller may agree to cover a repair. If you catch a problem quickly enough, the car may still be covered under a seller’s return policy.
Write a letter
Describe the problems, when they began and the steps taken to correct them, if any. Explain that the defect(s) still exists and your next step will be to pursue a replacement or refund under your state’s lemon laws. This type of correspondence may be required by your state if you want to pursue legal action.
Keep track of all communication and repair attempts
Keep a copy of everything, from text messages and letters, to repair estimates and bills. These might help your case if you decide to pursue legal action later.
Look up your state’s lemon laws
Depending on your state, if you want to pursue legal action, you may have a limited window of time in which to report problems. As mentioned above, you may also be required to submit evidence of any problems and your attempts to communicate with the seller. Look up your state’s lemon laws as soon as you think you may have a lemon car, so you know your rights and can ensure that you’re following any applicable rules. Read more on lemon laws below.
Lemon law basics
To look up your state’s lemon laws, start with your local department of motor vehicles or attorney general’s office; these laws are also tracked by the Better Business Bureau. Your eligibility will hinge on several factors.
The type of car matters in lemon law
The type of car you have will determine whether it falls under your state’s lemon law. Some states — such as Alabama — don’t cover leased cars. Others — such as Colorado, South Dakota and Alaska — only cover new cars, not used. Lemon law coverage of business and specialty vehicles (motorcycles, RVs, ATVs, boats) also varies.
How long you’ve had the lemon car matters
You can’t use a car for 10 years, have a problem and then claim it’s a lemon. Likewise, you can’t drive it 30,000 miles in a year and expect recompense. In Virginia, for example, you have 18 months from the original delivery to file a legal complaint. Used vehicles are also covered under certain conditions: For instance, Washington state allows up to 30 months for new cars and up to two years and 24,000 miles for used vehicles.
The cost of the lemon car’s repairs matters
You can’t successfully claim the car is a lemon if it has one problem that can be fixed with a $10 car part. Problems typically must be considered substantial impairment of a car’s use, market value or safety. Dealers also must be given a “reasonable” number of attempts to make things right.
What to do if your state’s lemon law doesn’t cover your vehicle
Even if you’re not able to qualify for a refund or replacement under your state’s lemon laws, you may still be protected under the Uniform Commercial Code and federal warranty law, known as the Magnuson-Moss Warranty Act. You may need to consult an attorney to determine your options.