How California’s Lemon Law Impacts Car Purchases, Leases, and Rentals

When we purchase or lease a vehicle, we trust that these cars and trucks have undergone some type of safety inspection to ensure that they do not contain defective parts. Unfortunately, malformed parts or errors during the assembly of the vehicle may put the driver and passengers at an increased risk of collision or injury. Many of these safety hazards slowly come to light as consumers report their concerns to the manufacturer or the National Highway Traffic Safety Administration (NHTSA). Once a substantial number of complaints have been lodged about a specific make and model, these entities will launch an investigation to identify the source of these issues. The NHTSA will then announce an auto safety recall campaign to alert customers of the defect and urge them to take their vehicles to the nearest dealership for the recommended repairs or replacement parts, free of charge. However, many drivers struggle with persistent safety concerns that are not addressed by a recall campaign, leaving them without the clear answers and permanent solutions they need to feel safe on the road. If you purchased or leased a defective new or used vehicle that is still under the manufacturer’s new-vehicle warranty, you may have the right to obtain a refund or replacement vehicle under California’s Lemon Law. Let’s take a look at how this law protects consumers, particularly when it comes to vehicle purchases, leases, and even rentals.

Understanding California Lemon Law

Consumers in California enjoy some of the strongest legal protections in the country. California’s Song-Beverly Consumer Warranty Act, known more informally as California’s lemon law, allows consumers to seek remedies for products (including vehicles) that show signs of significant mechanical or functional issues. In order to qualify for a remedy, such as a replacement vehicle or refund, the following conditions must be met.

The Manufacturer’s Warranty Still Applies

New and used vehicles that are sold with a valid warranty from the manufacturer qualify for protection under the Song-Beverly Consumer Warranty Act. If your vehicle exhibits recurring issues and the warranty still applies, you may be eligible for a refund or replacement vehicle. However, there are circumstances in which a vehicle may still be eligible for lemon law protection, even if the original warranty has expired. For example, if a problem was identified, but the dealership did not fix the issue before the warranty ran out, you may still be able to seek a legal remedy.

Defects Impacting the Vehicle’s Use, Value, or Safety

California’s lemon law states that remedies are available only to defects that impair the vehicle’s use, value, or safety. For example, an impairment of use occurs when a car fails to perform its intended function (i.e., take the driver to and from work every day). If the defect negatively impacts the value of the car or truck, causing its worth to fall far below a similar vehicle without the defect, this could be considered an impairment of value. Safety impairments jeopardize the health and well-being of the driver, passengers, or others on the road; due to these significant risks, these issues must be addressed as soon as possible.

No Improvement After a Reasonable Number of Repair Attempts

Lemon law protections cover issues that persist, even after the consumer has made a “reasonable” number of attempts to repair the vehicle. The term “reasonable” remains flexible, depending on the circumstances of the situation. As a general rule, two or more repair attempts constitute a “reasonable” amount. Since every situation is different, it’s best to seek the guidance of a trusted and knowledgeable Berkeley lemon law attorney to help you identify the most strategic path forward.

Does Lemon Law Cover Vehicle Leases?

It’s essential to recognize that California’s lemon law protects consumers from purchasing or leasing defective products, including new and used vehicles still covered under the manufacturer’s warranty. Even those who lease a vehicle may seek a replacement vehicle, provided they can present proof of a valid warranty. Depending on the specifics of your case, you may be able to ask the manufacturer for a refund of your down payment, all monthly lease payments, and any remaining lease payments because of the defect. Essentially, the damages for a defective leased vehicle are calculated based on the lease obligations, while damages for defective purchased vehicles are calculated according to the purchase contract obligations. Your experienced lemon law attorney will assess the details of your case to determine the steps you should take to recover the damages available to you under the law.

NHTSA Fines Rental Company For Safety Violations

In October 2023, the NHTSA issued an order imposing a $300,000 fine to Zipcar, a car rental company. According to the details of the consent order, the NHTSA took this action because it discovered that Zipcar allowed its customers to rent cars that were included in national auto safety recall campaigns. This event marks the first time that the NHTSA has issued a consent order to a rental car company. The consent order specifically mentions 2015-2017 Ford Transit vehicles, which have been recalled because of a defective coupling between the transmission and driveshaft that can cause the vehicles to lose power while in motion and put the occupants at increased risk of collision or injury. The terms of the order compel Zipcar to pay half of the fine upfront, but they can defer the other half of the fine by meeting the demands and requirements set forth in the letter. Ultimately, the company must submit an audit report to the NHTSA to prove that the defective vehicles have obtained the recommended recall repairs. In the wake of this announcement, the rental car industry and consumers are wondering whether the NHTSA will issue similar orders to other companies.

If you think your vehicle meets the legal definition of a “lemon,” the dedicated lemon law attorneys at Lemon Law Partners, LLP, are here to help you obtain your refund or replacement vehicle. Call our Berkeley office today at (510) 944-0336 to schedule your free case evaluation.

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