Repossession / My Car Is A Lemon

My Car is a Lemon: 4 Things You Can Do Today

Written by Ascend Team
Updated Nov 13th, 2023
The information provided in this article does not, and is not intended to, constitute legal or financial advice; instead, all information, content, and materials available in this article are for general informational purposes only. 

You are in need of a new car, and you start shopping. You make your way onto a lot, and you find the perfect option for you. Everything falls into place, the payment fits into your budget, you love the color, the style is what you are looking for. Everything seems good to go. You get the keys and drive off. A few days later things start to go array with your new vehicle. You are wondering if you purchased a lemon. You now have a car payment for a car that is virtually undrivable or will take tens of thousands of dollars to repair.  

 Now you are left dumbfounded, trying to figure out what your next course of action is. What do you do? Where do you go? You now have a car payment for a car that is virtually undrivable or will take tens of thousands of dollars to repair. That is more than what you bargained for. In this article we will dive into and explore XYZ things you can do if you are in this situation. You have options!  

How Do You Know If Your Car is a Lemon?

According to CARFAX, a lemon is when a car has a substantial defect that the automaker is unable to fix within a reasonable amount of time. Furthermore, the definition of substantial defect and reasonable amount of time varies from state to state. All states have lemon laws for brand new cars. Kelly Blue Book does an excellent job on breaking down the lemon laws for all 50 states. However, only 7 states have legislation that protects you in the instance of purchasing a used car that turns out to be a lemon. Those states are Connecticut, California, Massachusetts, Minnesota, New Jersey, New Mexico, and New York. Even though there are laws pertaining to used vehicles classified as lemons it may be unlikely that they will be enforced.  

The federal government also has their own version of a lemon law. The official name is the Magnuson Moss Warranty Federal Trade Commission Improvements Act. This can be found in Title 15 Chapter 50 of the U.S. Code in Sections 2301-2312. This applies to used cars that either come with an extended manufacturer warranty or a purchased extended warranty. In layman's terms, it means that if the manufacturer cannot amend the problem you are entitled to either a full refund or replacement.  

Ways to protect yourself against a Lemon 

There are many ways to protect yourself from purchasing a lemon. Here are 10 pretty easy ways to check if a car could be reliable or if it is a dud:  

  1. Get a vehicle history report. Many reputable dealerships will provide you with one for the vehicle, free of charge.  
  2. Read the contract. You want to check and see if the contract discloses anything that may be wrong with the car, or any warranty details that may have been extended to you from the previous owner, or from the dealership themselves. Many Certified Pre-Owned vehicles come with a warranty at no additional cost.  
  3. See if there is any unusual wear and tear in the car. Does the wear and tear of the vehicle match the year and mileage? If you see anything unusual, ask! This could be an indication that the previous owner did not take particularly good care of the car.  
  4. Inspect the exterior. Minor dings, dents and scratches are normal and should be expected. Keep an eye out for door jambs that do not align with the body of the car, mismatched mirrors, and most importantly, look for rust! If you see rust, that could be a sign that the car was exposed to lots of water and the engine or other critical parts could have suffered because of it.  

Additional Research Can Be Helpful

  1. Look under the hood. You want to look for loose hoses, leaking fluids, no corrosion on the battery. The engine compartment should be fairly clean and free of debris. You do not need to be a mechanic to look for these things either, anything that looks out of the ordinary – ask!  
  2. If you really like the car, and you think that you want to purchase it. Consult with a local mechanic. Many mechanics will provide an inspection at little to no cost to you. In some cases, the dealership may even offer a credit on an independent mechanic evaluation towards the final cost of the vehicle.  
  3. Take it for a spin! Take the car out on the road. You should drive it at slow speeds, and highway speeds. Resist the urge to turn the radio on while you are driving – you will want to keep your ears open to any funky noises that may arise. Especially clicking, thumping, vibrating, or shaking. The car should be fairly smooth upon acceleration and deceleration. Keep an eye out for any dashboard lights that may come on after you turn on the vehicle. Make sure all features of the car work – windshield wipers, signals, windows, radio, seatbelts, as well as the air conditioning and heating system.  
  4. Check for recalls. You can do this by going to the manufacturer’s website, enter the year and model of the car and check for recalls. You can also check for recalls by going to the National Highway Traffic Safety Administration’s website and entering the VIN number for your vehicle.  
  5. Last but not least. Check the reviews of the dealership you are purchasing the car from. Do they have a history of selling cars that are bad? You should look on both Google and the Better Business Bureau. These reviews will give you a pretty good indication on if the dealership is worthy or not.  

You conclude that you have bought a Lemon, now what?  

You should consult with a local attorney who specializes in lemon law, to ensure that you have a case. Follow their guidance. It is easier to get lemon laws enforced on new cars than older, used cars. You will want to make sure that you have detailed documentation of all interactions with the dealership, manufacturer and any person who has been in involved with any repairs.  

It could be a lengthy process; you may be better off trying to cut your losses and move on and get another vehicle. That could look quite different if you paid cash or financed your vehicle when you purchased it. If you purchased with cash, you may be able to recoup some of your investment by selling the vehicle as-is or selling it to a junk yard for scrap.  

How to get out of a loan for a Lemon vehicle?  

Okay, what should you do if you financed your vehicle, and it ended up being a lemon or too expensive to repair? You have a few options. Contact your lender and tell them the situation. They may be able to help you work out a solution. Depending on the amount of negative equity you have in the vehicle and your credit score; you may be able to wrap up the balance owed on damaged vehicle into a new car loan. Only if the new car has enough equity after taxes and extra fees are paid. If you choose to go this route you may have a higher interest rate or may be required to supply a higher down payment to secure the loan.  

Often times, this is not an option for many people. You can call your lender and tell them that you would like to turn the vehicle over to them. This is called a voluntary surrender. This can have negative credit implications, but it would allow you to get rid of the car. Keep in mind, you may still have a balance owed on the vehicle after they sell the vehicle at auction. This amount you can either set up a payment arrangement with them, discharge it in chapter 7 or chapter 13 bankruptcy, or attempt to settle the balance for less. Use our free bankruptcy calculator below to help you figure out if that is a good option for you.

Whatever you decide to do, you can contact us for a free evaluation of your situation and get you on back on the right track.