In 1982, California became the first state to pass an automobile “lemon law” which gave owners of defective cars the opportunity to seek a replacement or a refund for a new car that had a defect that could not be repaired in a reasonable amount of time. This law proved so popular that other states soon followed suit. Less than twenty five years later, all fifty states have some sort of lemon law on their books. California may take the lead again in the protection of auto buyers as the state Assembly recently passed a “bill of rights” designed to protect buyers of used cars.
This bill, which has not been signed into law, would protect buyers of used cars from deceptive lending practices, sales of lemon-law buyback vehicles, and vehicles with frame damage. Buyers would also be allowed three days in which to cancel the deal if they changed their mind after the purchase.
This bill may or may not become law, but it outlines the need for laws that cover sales of used cars as well as new ones. While all states have a lemon law that covers the sale of defective new vehicles, few states have laws that protect buyers of used vehicles. As a result, many buyers have become victims of deceptive practices such as rolling back a vehicle’s odometer to show fewer miles, reselling cars that have previously been bought back by manufacturers as lemons and selling wrecked cars that have been repaired without noting their accident history. In addition, many used car dealers sell cars using deceptive financing terms that can add hundreds or thousands of dollars to the cost of the vehicle, often without the buyer’s knowledge.
If this bill does become law in California, expect other states to follow, just as they did with lemon laws. Consumer protection benefits everyone, and laws protecting buyers of used cars are just around the corner.