Beware of Lemon Laundering Cases

Beware of Lemon Laundering Cases


I guess everyone knows about “lemon laws.” According to California Lemon Law any vehicle which has undergone several repairs for at least 30 days within 18 months after purchase can be replaced or repaired by the dealership. Most of the defective cars or the so called “lemons” are replaced. The replaced car is called a lemon law buyback.

What happens with a lemon law buyback? The answer is that some tricky auto dealers take the car, repair the defective part and resell it to unsuspecting buyers without disclosing the fact of its being a “lemon.” This is called lemon laundering.

Dealers who have a lemon law buyback are allowed to sell the car provided that they make a notification about the car’s “past life.” The vehicle itself should bear the notification in at least one place. The notification should be clearly readable for the potential buyers. There are strict requirements as for the places the notification should be affixed to (especially in the case of motorcycles).

In California, any car which has been bought back by the manufacturer or dealer should be called a “lemon.” However, not all states recognize this designation. That’s why thousands of “lemons” are taken to other states and sold there. Here, the cars do not have their usual titles and they are sold as used cars on an “as is” basis i.e. without any warranty. If, however, the “lemon” is caught, the dealers usually say they have fixed the problem. But the thing is if the problem was of the fixable character, the car wouldn’t have been bought back.

In order to avoid buying a lemon law buyback you should:

  • Get a copy of the vehicle history report. Here, again, be careful not to be cheated by the dealer’s “handmade” car history reports. Usually dealers make their own car history reports concealing all the “unnecessary information.” You can get a car history report from either CarFax or AutCheck.
  • Have your mechanic inspect the vehicle before you buy it. If the dealership refuses to let you have the car inspected by your mechanic, then there is something dishonest there.
  • Ask for a warranty for the car you are going to buy. If the dealer is trying to sell the car on an “as is” basis, then do not buy it.

Cars, manufacturers are producing, are not always perfect. So car buyers should be extremely careful not to become owners of defective cars or even worse; victims of lemon laundering.