California Supreme Court Ruling Screws Used Car Buyers

In a surprisingly non-consumer-friendly ruling, the California Supreme Court has ruled that only new cars with warranties qualify under the state’s Lemon Law. Lemon Law is an important consumer protection tool that, essentially, means that if a manufacturer can’t fix a serious warranty defect in a vehicle (including after multiple attempts), then, by law, the manufacturer can be required to promptly refund or replace the vehicle. Until now, that meant that if anyone bought a used car with an unexpired warranty, they were still protected in California. Thanks to a court case that kicked off in 2018 over a 2011 Dodge Ram, FCA (now under Stellantis) Californian used car buyers are no longer protected.

This Is A Big Deal

The lawsuit was fought and lost over a 2011 Dodge Ram 2500 bought in 2013 at Pacific Auto Center in Fontana. It was two years old with 55,444 miles on the clock. The new owners experienced repeated engine issues, and although the truck’s three-year/100,000-mile bumper-to-bumper warranty had expired, its five-year/100,000-mile warranty covering the engine, transmission, and drive system, had not. In 2018, after going in for repair six times, the plaintiffs sued as “FCA had failed to repair it or conform to the warranty,” and that they had “afforded FCA a reasonable number of attempts to repair the vehicle” but refused to repay the purchase price or replace the vehicle.

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Buying a used car always comes with an inherent risk, even if it comes from a dealer for the brand with its big multipoint inspection checklist all ticked off. This is particularly true when it comes to the drivetrain, as a problem can take many miles to show itself. Now, those buying a used car in California with its warranty intact will find that the warranty’s legal power has been reduced. Essentially, if warranty repairs fail to solve an issue, the issue can be placed back on the new owner.

The Fallout

It appears FCA’s lawyers honed in and disputed the lawsuit based on a specific phrase “other motor vehicles sold with a manufacturers’ new car warranty” in the applicable law and argued that the refund-or-replace remedy is only applicable to new cars, not “previously owned vehicles with some balance remaining on the manufacturers express warranty.” In 2023, it’s reported that around 22,000 Lemon Law cases were filed in California alone.

Related

Ford Bronco Offered With Dedicated Off-Road Warranty

The warranty covers damages in the wheels and tires, body, and windshield.

This case will affect those still outstanding, particularly those sold as brand-certified used vehicles and marketed as being rigorously inspected. No doubt, some, if not all, automaker’s lawyers will look carefully at the language used in the Lemon Law of every state. It could save automakers millions per year to have them upheld in the same way as California.

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H/T:
Carscoops