Lemon Law for California

In the past six years, more than 36,000 cars have been branded as lemons in California. The Lemon Law generated nearly $1 billion in relief to their owners, according to the state Department of Consumer Affairs.

The Lemon Law is stronger than when it took effect in January 1983, [lemon law author Assemblywoman Sally] Tanner said. It originally said an owner was entitled to a replacement or refund if the car wasn’t fixed after a ‘reasonable number of repair attempts’ in the first 12 months or 12,000 miles.

Usually 3 failed repair attempts are required, however 2 failed repair attempts are sufficient if the problem is severe or life threatening, or 30 days or more at the dealership for random repairs.

CA Car dealers have arbitration clauses included in their sales contracts that preclude buyers from going to court. The National Arbitration Forum (NAF) and the arbitrator’s findings are binding. All disputes are channeled to arbitration forums. In case the consumer loses, he or she will not be able reject the award and go to court. This does not concern such organizations as the Better Business Bureau, providing  arbitration in lemon law cases. In this case if the consumer does not like the results, he or she may still file a lawsuit. In this case the consumer can hire a lawyer and his case will be heard by a jury.

The consumers, signing the contracts with binding arbitration clauses, are foregoing their right to a jury trial is bad enough. Arbitration forums as NAF are, to put it mildly, unfair to consumers. These forums are required to information on who wins these proceedings. Public Citizen nonprofit group analyzed the NAF data and found that California consumers lost 94% of 19,000 cases! One arbitrator handled 68 cases in one day. There is no in-person hearing. Arbitrators who rule for consumers are soon dropped by NAF.

Other arbitration forums such as the American Arbitration Association are almost as bad for consumers as NAF. Taking a dispute to AAA is quite expensive (especially when it comes to paying the arbitrator). The arbitrators favor the big corporations knowing they won’t be chosen for future arbitrations (more fees) if they rule for the consumers.

The car dealers want no part of arbitration when it comes to fighting with the manufacturers over their franchise rights. The dealers succeeded in getting Congress to enact a law banning binding arbitration clauses in the dealers’ sales and service contracts with the auto manufacturers!

Is your new dream car spending more time at the dealer’s repair shop than it spends with you? Does you car emit smoke in a rainbow of colors, drip multiple fluids, or make wheezing noises while stopped at an intersection? Do the neighbours complain that they hear your new car coming long before they see it? If you’ve detected a faint whiff of citrus when approaching your garage, then you could have a lemon on your hands. But wait! Hold the sugar and ice cubes: In California, you won’t be forced to make lemonade.

What, Exactly, Is a Lemon?

In California, a problem car’s owner can be entitled to a comparable car replacement, or a refund of the purchase price (prorated based on the miles driven). In order to qualify as a lemon:

The car must still be under warranty. The owner may have taken the car for repair of the similar problem four or more times through an authorized dealer. The car must have been inoperable for 30 days (not consecutive)

The vehicle problem or defect must also impair the use, value, or safety of the vehicle. To qualify, cars must be either purchased or leased in California for personal, family, or business use.