What Happens to My Lemon Law Buyback?

by Aryn Plax

Mar 4, 2021

You finally have a defective vehicle off your hands. You may have settled with an auto manufacturer, or you may have won a lemon law case in court. Either way, the auto manufacturer has agreed to buy back your vehicle. The faulty vehicle is no longer your problem.

What happens when the auto manufacturer buys back your vehicle? If the auto manufacturer lost the case under the California Lemon Law, then the company has to brand the vehicle as a “Lemon Law Buyback.”

The Automotive Consumer Notification Act, a part of the California Lemon Law, requires manufacturers to put notices on vehicles that were bought back.

If the manufacturer chooses to resell the lemon law buyback, it has to provide the potential buyer a notice that says the following:

“This vehicle was repurchased by its manufacturer due to a defect in the vehicle pursuant to consumer warranty laws. The title to this vehicle has been permanently branded with the notation ‘Lemon Law Buyback’.”

Several cars sit in a row at a dealership

This part of the California Lemon Law ensures that lemon vehicles don’t slip under the radar and consumers can make informed choices about what vehicles they buy.

However, it is possible for a consumer to purchase a lemon law buyback unwittingly. Not all states’ lemon laws require auto manufacturers to label their lemon law buybacks. An auto manufacturer may buy back a lemon vehicle in a state with no notification requirement and then sell the vehicle in another state. Alternatively, an auto manufacturer may transfer a lemon buyback branded vehicle to a state with no branding requirement, and thereby remove the title in a process known as “title-washing.”

It is also possible for an unknowing consumer to buy a lemon law buyback that was repurchased and sold again in California.

If you settle your lemon law case with an auto manufacturer out of court, the auto manufacturer may get away with not branding the repurchased vehicle as a lemon law buyback. The manufacturer may have you sign a settlement agreement that frees the manufacturer of that obligation. When the manufacturer repurchases the vehicle, it will label the vehicle as “manufacturer repurchase,” “goodwill repurchase” or “goodwill buyback.” This is done out of a desire to disguise the vehicle’s history of defects.

When you file a lemon lawsuit against an auto manufacturer in court and win, you don’t just gain a victory for yourself. Your legal victory helps protect other consumers. It binds the auto manufacturer to a legal obligation to notify California consumers of the vehicle’s buyback status. Conversely, another consumer’s lemon law victory may help protect you. When you go to the dealership to buy a used vehicle, you should look at its title history. If it’s branded as a lemon law buyback, you may choose not to purchase it. The notification requirement in the California Lemon Law protects you and ensures that you and other consumers can make informed purchases.