Help, I Bought a Lemon — Now What Do I Do?

That shiny new (or new-to-you) car you just bought turned out to be a piece of junk. What recourse do you have?

When you buy a car, you expect to be able to depend on that car. Most vehicles will break down or need repairs occasionally, but your car being out of service should be a rare event. Even used cars can be very reliable for 200,000 miles or more these days.

However, some cars are not very reliable at all. There is even a name for them — lemons.

How to Avoid Buying a Lemon

It is not always possible to avoid ending up with a lemon, but sometimes you can spot warning signs and avoid buying a car that is likely to give you trouble.

Research Reliability

Check vehicle reliability reports and avoid models that have low reliability scores. Even new cars can have serious reliability issues due to faulty components or manufacturing issues. The first production year of a new model or major model update is often the least reliable.

Avoid Salvage Titles

If you are shopping for a used car, be wary buying a car with a salvage title. Cars that have had serious damage are issued a salvage title. Although it is possible that a car with a salvage title has been properly repaired, sometimes wrecked cars are bent back in shape and sold without properly replacing all of the damaged parts. The result can be a vehicle that is unsafe and will require lots of future repairs.

Skip High Mileage "New" Cars

Watch out for a "new" car for sale that has a lot of miles on it. A car sold as a new car that has thousands of miles on it may have been used as an errand car by the staff at the dealership or has been taken for lots of test drives. Either way, it has more wear and tear — and less warranty remaining — than a truly new car

What to Do With a Lemon?

So what can you do if you are struggling with a car that is not reliable?

Start With the Warranty

See if your car has a vehicle warranty that covers your issues. Getting your vehicle repaired under warranty will not cost you anything except your time. Most new cars come with several years of coverage for major systems including the engine and transmission. Some used cars come with a warranty of 30 days or more that cover major mechanical problems.

Vehicle warranties expire after a certain amount of mileage or time, so you need to take your car in for warranty repair service before the warranty expires. After the warranty expires, you will need to pay for repairs out of your own pocket.

Get a Refund Under the Lemon Law

In some cases, reasonable attempts to repair your car do not get it running reliably. Some cars keep breaking down for the same reason, even after repairs are completed. This is where the legal definition of "lemon" comes into play.

The federal lemon law was established in 1975 to assist vehicle owners in dealing with defective vehicles and other goods. The basic idea of the lemon law is that if a faulty vehicle cannot be repaired, the manufacturer must replace it or provide a refund. Since state law applies to many aspects of warranty coverage, the specific details of what constitutes a lemon varies from state to state.

As an example, in my state of Iowa, if you have owned a vehicle for less than two years and driven it less than 24,000 miles, it is considered a lemon if:

  • Your vehicle has been in the shop for repairs at least three times for the same problem with no success;
  • Your vehicle's malfunction could cause serious injury or death, and the problem has not been fixed;
  • Your vehicle has been out of service for at least 20 days total and it still doesn't work properly.

You can check your state's lemon laws at your state's attorney general office or consumer protection agency.

The key to getting your vehicle replaced or refunded under the lemon law depends on proper documentation of the issues with your vehicle. You will need to document your repair attempts and how much time your vehicle has been out of service in order to meet the legal definition of a lemon in your state.

In order to claim a refund under the lemon law, you need to notify the manufacturer of the issues with your vehicle. If the issues cannot be resolved within 10 days, you can request that the vehicle be replaced or the purchase price be refunded.

Have you ever been stuck with a lemon? How'd you get rid of it?

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