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This is How to Avoid Buying a Lemon Car

Biting into a deal with a lemon car could do more than make your face pinch, it could shrivel your wallet, too. In this article, we’ll go over what a lemon car is, how to avoid one, the laws available to protect you and what to do if you bought a lemon.

What is a lemon car
5 steps to avoid buying a lemon car
Lemon laws
What to do if you think you bought a lemon

What is a lemon car

A lemon car is generally a vehicle with a major problem or multiple problems that surface right after you bought or leased it, which stop the car from working as it should. Lemon cars can be new or used, and they can have one mile on the odometer or several thousand miles at the time you get it.

Each state has its own specific legal definition as to what a lemon car is. Many states define it as a substantial defect affecting at least one of three things:

  • Your ability to use the vehicle
  • Your safety in the vehicle
  • The vehicle’s market value

The third factor usually requires that the seller has failed to repair the car within a certain amount of time and within a reasonable number of attempts.

5 steps to avoid buying a lemon car

While new cars can be lemons, most of the following advice focuses on used cars, which have a higher chance of being a lemon and fewer legal protections in many states. Check for the following things and don’t be afraid to ask the seller for the information or paperwork.

1. Test for red flags.

Inspect the car yourself before you spend any money. Remember too that none of these tips are infallible — If you are interested in a car, especially a used car from a private seller, it’s best to have a professional auto mechanic look at it. But here are some things you can do to observe the vehicle and catch major warning signs.

Look. Don’t just look for cosmetic things, like scratches in the paint. Instead, look at the warning lights on the dashboard. Check the glass over it to make sure the owner didn’t put black tape to hide any of the warning lights.

Also look to see if any smoke comes out of the exhaust when the owner (or a friend you brought along with you) turns on the car and gives it some gas, reving it up after the car’s engine has been running for a few minutes. A little water vapor is normal. White, blue, gray or black smoke all means there’s a problem.

Feel. While it is a good idea to check that the driver’s seat is cushy, you also could do a couple of touch tests. To see if the car were in an accident, run a finger along the seam gaps between the doors, hood or trunk and the car body. If the seams noticeably change width, that’s a sign it may have had major damage that was repaired.

Check the oil and rub a bit between your fingers. You don’t want to feel grit or metal flakes. You also don’t want it to be too thin or very light-colored. It should feel smooth and be dark-colored — brown or black — and go up to the proper “full” mark on the dipstick.

Listen. If you test-drive the car, listen closely:

  • Pinging or knocking noise could mean there’s an engine problem
  • Whining or grinding noise may mean the transmission is in bad shape
  • Squeaking when you go over bumps probably means the suspension is poor
  • Rushing air sounds could mean a hose is loose or the car isn’t water-tight
  • Squealing brakes could mean they need to be replaced soon

Smell. Water damage can cause the car to smell musty. A car that isn’t waterproof not only means you might get wet, but you may also have a lot of wind and road noise when you drive at high speeds. Breathing in mold or bacteria that grows because of a water leak might not be good for your health either.

2. Test-drive.

If you do test-drive the vehicle, don’t just drive it around a parking lot. Ask the salesperson or get the owner’s permission for a real test drive and have them go with you. If they refuse to allow a test drive, that may be a red flag, too, and it’s probably best not to take the car. Only test-drive it if the car looks good and you’re serious about buying.

On the test drive, take it around the neighborhood and, if possible, go over a couple of potholes and speed bumps to check the suspension. To test the brakes, first get permission and warn the salesperson or owner you want to do a hard stop to test them. Make sure there is absolutely no one around you who could possibly hit you — or whom you could hit — if the brakes don’t work. Then, at the appropriate time and place, accelerate to the speed limit and hit the brakes hard to test them.

If the car passes that test, take it on a highway or freeway. Again, let the salesperson or owner know and get permission to accelerate quickly within reason up to the speed limit to test the engine and transmission. If the car has trouble or something sounds funny during acceleration, there may be a problem.

3. See the title condition.

For a used car, assuming it does pass the red flag tests, look at the vehicle’s title to make sure it isn’t salvage. A vehicle is considered salvage when it was totaled by an accident, a theft or a natural disaster. If it is salvage, it has an extremely decreased value, lenders are unlikely to finance it and auto insurance companies are unlikely to insure it. If you still want to buy the car (it’s likely cheap), make sure it can pass a safety inspection, you have a lender that will finance it (if necessary) and that an auto insurance business that will insure it according to your state’s legal requirements.

4. Take it for a safety inspection.

So far we covered free things you can do to check the car. If it passes all of those, then there are also some things you may have to pay for. A mechanical safety inspection by a professional car mechanic is highly recommended if you’re buying a from a private seller. It’s also not a bad idea if you’re buying used from a dealer, though it’s not necessary if you’re looking at a new car.

A mechanical safety inspection can tell you a lot about a used car. It can tell you about a vehicle’s past (whether it was taken care of and well maintained) and about a vehicle’s future (whether it will need a new transmission soon, how long the brakes will last and more).

You could also use any major or immediate repairs that are needed as a negotiating point. And 17 states require that every car pass an annual or bi-annual safety inspection. If you’re in one of those states and the car you’re looking at hasn’t recently passed it, take it for inspection again.

The cost of a state-required safety inspection is nominal ($7 to $30+). A more thorough mechanical inspection may cost you $100, but it could save you blood, sweat, tears and a few thousand dollars.

5. See the vehicle history report.

Last but not least on this list is the vehicle history report (VHR). The industry standard and best-known provider is Carfax, but alternative sources are AutoCheck and the National Motor Vehicle Title Information System. Most dealerships offer these for free, but you can purchase them directly. They usually include the following:

  • Owner history. If a vehicle had many owners in a relatively short time (such as five owners in two years), it might be a lemon car. Multiple owners in an extremely short time most likely mean the car has had problems that owners get rid of it almost as soon as they get it.
  • Maintenance. The VHR or maintenance logs should show how much time and how many miles passed between oil changes and other such services performed on the car. If the owner didn’t follow the manufacturer recommended maintenance schedule and, say, drove it 30,000 miles between oil changes, the engine is probably in bad shape, making it a lemon car.
  • Safety recalls. The VHR should show any recalls (though you can also look these up for free from the National Highway Traffic Safety Administration). A recall is when a manufacturer finds a safety defect in a car model and offers a repair free to the customer to fix it. Ask about any major recalls, and if the seller hasn’t taken the car in for a recall repair, the car might not be safe until that happens.

If the vehicle passes all the tests, congratulations, you’ve got a good car on your hands! And if you need funding for it, then you might want to check out auto loan offers from Lenders on LendingTree, a review on the best auto loan rates in 2018 or a basic guide on how to finance your wheels.

Lemon laws

While each state is different, they all have limits on the type of car that the law applies to, its value and the timing involved. Check your state’s website on lemon laws if you have any questions about eligibility and how to go through court or apply for state arbitration. Ultimately you may be entitled to a refund or a replacement vehicle.

The type of car

The type of car you have will determine whether it falls under your state’s lemon law. Some states — such as Alabama — don’t cover leased cars, and others — such as Colorado, South Dakota and Alaska — only cover new cars. Lemon law coverage of business and specialty vehicles (motorcycles, RVs, ATVs, boats) also vary.

The timing

You can’t use a car for 10 years, have a problem and then claim it’s a lemon. Each state has time and mileage limits that begin from the date of delivery, which is when you take the car as yours for the first time. In Virginia, for a new or used car, you have 18 months from the date of sale or the date of the final action by the manufacturer to file a legal complaint. Other states vary based on whether the car is new or used and where you bought it.

  • New cars. In many states, a new car (purchased or leased) is eligible to be considered a lemon for at least one year or 12,000 miles after the date of delivery. Within that period, you must give the selling dealership and manufacturer a certain amount of time or attempts to repair the car before it’s declared a lemon. And if the dealer doesn’t accept your vehicle repair request, it can be considered an invalid refusal.
  • Used cars from a dealer. Used cars have different eligibility periods and repair attempt requirements, depending on the state and the car’s age. For example, in Massachusetts, dealers must offer a warranty on the car for up to 90 days or 3,750 miles. If something does go wrong, they have three repair attempts to fix it, although the attempts can’t put the car out of commission for more than 11 business days. Different states have different versions of these requirements: Florida, for example, allows four attempts and 15 days, while Oregon allows three attempts and 30 days in general cases but only one attempt for a problem that is likely to cause serious injury.
  • Used cars from a private sale. If you bought a car from a person instead of a dealership, you might have a stricter timeline. In Massachusetts, for instance, you get seven days from the date of sale for the car to fail state inspection.

The value

You can’t successfully claim the car is a lemon if it has one problem that can be fixed with a $10 car part. There are states that require you to prove the car’s problem severely impacts its worth. Returning to Massachusetts as an example, the cost of repairs for a car bought from a private seller must be at least 10% of the purchase price for it to count as “substantial.” Over in New York, meanwhile, the court decides if a vehicle’s defects add up to “a substantial impairment of value.”

The documentation

Sellers, both dealerships and private individuals, are often required by the state to disclose any vehicle problems or issues that may seriously impact the function, safety or value of the car before you buy it. If you can prove the seller knew about any issues and did not disclose them, you most likely have a very strong legal point.

If you do go through arbitration or court, you will probably need to prove when you got the car (purchase order, finance contract, warranty), that the car has issues (inspections, receipts, repair orders), how long the issues have been affecting you (invoices with dates from when you dropped off the car and picked it up) and that you followed the law in notifying the dealer or manufacturer (copies of letters, receipts from certified mail).

If your state’s lemon law doesn’t cover your vehicle

There are federal laws that may stand in for a state lemon law, such as the Uniform Commercial Code and the Magnuson-Moss Warranty Act. So even if you’re state’s protections are pretty lax, you may still have a federal case to make, and it’s worth looking into.

What to do if you think you bought a lemon

First, talk to the seller. Tell them about the issues on the car and see if you can come to an agreement. In the best-case scenario, the car may still be under warranty, or the seller may agree to cover a repair.

Second, look up your local lemon laws on your state’s “.gov” website to be aware of any time limits you have to report a problem and to see if your vehicle might qualify as a lemon. If it doesn’t qualify under state law, look at federal law.

Note that having car problems that might make the vehicle a lemon doesn’t mean you can stop making your car payments if you financed the vehicle. The seller might not care whether you make your payments, but the lender (which is usually a separate entity) will care, and suspending repayment can hurt your credit severely.

Keep all of your paperwork whenever you go to a mechanic. If it isn’t repaired after the first time, follow through with your state’s legal guidelines and allow the seller (the person, the dealership or the manufacturer) to have the required amount of days and attempts to repair the problem.

Ultimately, if the problem persists, ask the seller to comply with the lemon law and either provide a replacement car or allow you to return the car for a full refund. If the seller isn’t accommodating, you could apply for state arbitration, get a lawyer and if necessary, go to court.

 

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