California Lemon Law News + Info

What Happens To My Car Loan During A California Lemon Law Claim?

What if you have taken out a loan for your car purchase, only to find out that your car is defective? You may have recurring problems with your car and have taken it to the dealership for repairs. However, the problems persist even after the repairs. You may still have many loan payments ahead, for a faulty vehicle.

According to the California Lemon Law, your car is considered a lemon if a recurring defect has not been remedied by an authorized repair facility within a reasonable number of attempts. There is no set number of attempts considered “reasonable” under the California Lemon Law. Instead, that number is determined on a case-by-case basis.

What if your car payments are for a lemon vehicle? Here are answers to questions about how financing can affect your lemon law case.

1. Can I pursue a California lemon law claim?

Absolutely! Whether you took out a loan for your car has no impact on your legal right to pursue a lemon law claim. Your right to pursue a case is determined by the criteria set forth by the California Lemon Law. You had to have bought or leased a new or used vehicle from a licensed dealership in California, the vehicle has to have come with a manufacturer-backed warranty, and the first repair related to your defect had to occur before the warranty expired.

2. What do I do about my loan payments during my California lemon law case?

While you file a claim, and during the process of pursuing a lemon law case, you are still expected to make the monthly payments that you owe to the bank. You do not want to get into legal trouble with the bank just because you neglected those payments.

3. What happens to my loan after the lemon law case concludes?

The California Lemon Law states that those who opt for a lemon law buyback are entitled to the purchase price of the car, and potentially “incidental damages.” Typically, your lemon law buyback would include the total amount paid, minus a mileage offset. However, if your lemon law buyback amount is lower than the amount that you still owe on your loan, you may be on the hook for the difference.

If you took out a loan on your car, and you think you may have a lemon law case, fill out our form below or call us at 877-217-7676 for a free consultation.


Lemon Law Help by Knight Law Group is an automotive lemon law firm that exclusively practices in California. If you are a California resident who purchased or leased a defective vehicle from a licensed dealership in California, we may be able to help you get rid of your potential lemon and recover significant cash compensation. Model year restrictions apply: 2017–Present vehicle models only.

However, we cannot help those who reside outside of California or purchased their vehicle outside of California unless they are active duty members of the Armed Forces, nor will we be able to refer those to a lemon law firm in their states.

To learn more about the California Lemon Law and your legal rights, visit our guides on the California Lemon Law and Used Car Lemon Law for more information.

Think You Have a Lemon?

Tell us about Yourself
Tell us about your vehicle

By submitting this form, you agree to be contacted via phone, text or email regarding your claim.