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I Bought a Used Car and It’s a Lemon. Now What?

“I bought a used car and it’s a lemon” — these are the words nobody ever wants to use after investing their hard-earned money in a new (to them) ride. 

Unfortunately, this happens more often than it should.

Of all the cars that are sold each year, approximately 150,000 of them turn out to be lemons. 

What should you do if you’ve recently purchased a new car that doesn’t work the way it’s supposed to? 

Read on to learn how to handle this situation and ensure you get a functioning car in the future.

What Makes a Car a Lemon?

Before we get into the specific steps you ought to take after buying a car that turns out to be a lemon, let’s go over what exactly makes a car a lemon. There are some important nuances here that we need to address.

Generally speaking, a car is considered a lemon if it meets the following criteria:

  • It must have a substantial defect that the warranty covers
  • That defect must have occurred within a specific time period or number of miles after purchasing the car
  • That defect must be deemed unfixable after a reasonable number of attempts to repair it

A “substantial defect” is a term that refers to problems covered by the car’s warranty. These problems must have an effect on the car’s safety, use, or value. Examples of substantial defects include faulty breaks or steering issues. The substantial defect cannot be the result of abuse by you as the driver.

After discovering that your car is a lemon, you must allow the car dealer to make a “reasonable number” of repair attempts.

The specific number of attempts they’re allowed to make varies depending on the defect. For example, a serious safety defect must be fixed within one attempt. If it cannot be fixed, the car is considered a lemon.

A vehicle may also be considered a lemon if it remains in the shop for longer than 30 days within a one-year time period.

What Should I Do if I Bought a Used Car and it’s a Lemon?

Does this description seem like it applies to your car? If so, you likely are driving a lemon. There’s also a good chance that you are protected by your state’s Lemon Laws.

Used Car Lemon Laws

All states have some kind of Lemon Law for new cars, but only six states have Lemon Laws in place for used cars. Those states are as follows:

  • Hawaii
  • Massachusetts
  • New Jersey
  • Minnesota
  • New York
  • Rhode Island

If you live in one of these states, you can pursue legal action against the dealer who sold you the car.

Generally speaking, there are three options available to you if you seek legal action and win your case.

The dealer will either purchase the car back from you, will replace your car with one that functions properly, or you will receive a cash settlement. The settlement may include a repair that the dealer representative supervises. 

State Laws

If you do not live in a state that has Used Car Lemon Laws in place, you can still pursue legal action.

There are a lot of other regulations in place designed to protect buyers from fraudulent dealers. 

Seven states — Arizona, Illinois, Connecticut, Nevada, New Mexico, Maine, and Pennsylvania — have laws that require used-car warranties or minimum standards for used cars. Many other states have laws in place regarding unfair or deceptive sales techniques.

Under these laws, you will likely be able to seek some kind of justice after being sold a lemon.

Keep in mind, though, that unless you live in a state with Used Car Lemon Laws, the dealer will not be legally obligated to replace the car or provide you with a full refund.

Federal Laws

In addition to state laws designed to protect buyers, there are also federal laws in place that may protect you. 

The following are some of the laws that may be applicable to your case:

The Uniform Commercial Code

Under this law, the sale of a used-car sale automatically implies that the car is fit for transportation

The Federal Trade Commission’s Used Car Rule

This law requires a dealer who sells at least five cars each year to publish details on every used car they sell

Magnuson-Moss Warranty Act

This law requires manufacturers and sellers of various consumer products, including cars, to provide clear information about the warranty coverage of that product

These laws can be very helpful in protecting consumers and ensuring you receive some kind of compensation.

It should be noted that there are loopholes within these laws. For example, in the Uniform Commercial Code, the implication that the car is fit for transportation is waived if the car is listed as being sold “as is.” 

Tips for Buying Used Cars in the Future

As you can see, you definitely have options if you’ve purchased a used car that is a lemon. In the future, though, you’ll need to exercise more caution to avoid finding yourself in a similar situation. 

The following are some tips that will help you buy a reliable used car:

  • Check the vehicle history report before you buy
  • Take the car for a test drive 
  • Ask for copies of the service records
  • Have the car inspected by a mechanic before you purchase it
  • Invest in protection that will help you get your money back if you do purchase a lemon — click here to learn more about this coverage

You may have had a bad experience, but that doesn’t mean you have to be afraid of buying used cars forever. As long as you’re thorough in your inspection beforehand, you shouldn’t have any problems.

Need More Car Buying Advice?

There are few things more frustrating than having to tell people, “I bought a used car and it’s a lemon.”

If you’re currently dealing with this, it’s time to stop beating yourself up and start making lemonade.

Keeping these tips in mind will help you address the issue and make sure you get a car that functions properly in the future. 

Do you need more advice on buying a used car and making sure it runs properly? If so, we’ve got lots of helpful articles on our site.

Check out the Buying and Selling section today to learn everything you need to know about buying a used car.