by Andrew Rohrlich
Buying a vehicle from a private party is an exciting process. But there are some precautions you need to take to avoid getting a defective product. You may worry that you'll purchase a lemon and be left with no recourse. So, you might wonder: What are lemon laws? Do lemon laws apply to private sales?
Read on to find answers to these questions and more.
What Are Lemon Laws?
Lemon laws are federal and state laws that offer protection to consumers by providing remedies for the purchase of defective motor vehicles.
How do lemon laws work? When a vehicle is determined to be a "lemon," the manufacturer must either replace the vehicle with a comparable new model or provide a refund if they can't repair the defect despite a reasonable attempt.
Lemon laws can apply to new and used vehicles, including:
- All-terrain vehicles
Federal Lemon Law
Some states have varying lemon laws and may not cover used car purchases. But you may qualify for federal protection under the Magnuson-Moss Warranty Act of 1975, also known as the federal lemon law.
This law covers warranties on consumer products — including vehicles — and protects you from manufacturers that use disclaimers on warranties in a misleading or unfair manner.
The law protects you if you have:
- Proof of a valid warranty
- Proof the vehicle was taken in for repairs while the warranty was active
- Proof that the vehicle was not repaired in a satisfactory manner despite a reasonable number of repair attempts
- Proof of reasonable and necessary vehicle maintenance
The federal lemon law covers all vehicles except repossessed vehicles, farm equipment, and boats.
How Lemon Laws Vary From State to State
Lemon laws vary widely by state based on several factors:
- Year of the vehicle
- Make of the vehicle
- Type of defect
- Manufacturer's warranty
- Time or mileage since purchase
Additionally, although some states may require that an owner file a written complaint with the manufacturer before taking any legal action, many states do not.
You should always review your state's lemon law carefully before proceeding with legal action.
States With Lemon Laws for Used Cars
Thankfully, the majority of states have enacted lemon laws for used cars or included used cards in their existing lemon laws. These states are as follows:
- New Jersey
- New Mexico
- New York
- Rhode Island
- South Dakota
- West Virginia
The remaining 19 states' lemon laws only cover new vehicles.
Motor Vehicles Protected Under Lemon Laws — New vs Used
Whether the motor vehicle was new or used also greatly affects whether it's protected under lemon laws.
All states lemon laws cover new vehicles since they are sold by the manufacturer. New vehicles also typically have a manufacturer's warranty, so state and federal lemon laws will cover them as long as that warranty is still in effect.
Used vehicles, on the other hand, have different stipulations for coverage.
In most states, used vehicles are sold "as-is," meaning they don't have warranty coverage, whether expressed or implied. Most state laws and the federal lemon law don't cover used vehicles without an active warranty, which can include an express warranty (also known as an extended warranty) or a service contract.
What if your used car does have a defect that occurred within the active warranty period? Some states may only cover vehicles obtained from dealerships and not private sales.
Others may not cover all types of vehicles. Others may have a very short period of coverage, such as only 15 days after the sale or less than 1,000 miles after purchase.
It's important to check your state's lemon laws to see what used car coverage — if any — you may have, especially when purchasing from a private party.
How Private Sellers Comply With Lemon Laws
Whether a state has a used car lemon law or not, private vehicle sellers have to follow state laws governing the sale of used cars.
Generally, private vehicle sellers have to provide certain disclosures and information to protect you from fraud or misrepresentation, such as:
- Odometer disclosure statement: A secure legal document or statement on a title that states the actual mileage of a vehicle at the time of sale
- Vehicle title: A legal document that demonstrates who owns a vehicle and contains official information about the vehicle and owner
- Vehicle identification number (VIN): The identifying number of a vehicle that can be used to find vehicle history reports
- Known mechanical problems
- Prior accidents
Some states also require private sellers to obtain emissions inspections and a valid smog certificate before they sell to prove the vehicle is safe to drive.
How To Protect Yourself If You've Purchased a Lemon Car
What if you bought a car and found out it was a lemon? Thankfully, there are three steps you can take to protect yourself if you've purchased a lemon car.
Know Your Legal Rights in a Private Car Sale
It's always important to know your legal rights in a private car sale.
For example, you have the legal right to obtain the VIN if requested, which you can use to look up the vehicle history report. The seller must also disclose any known issues or accidents and complete a bill of sale.
Secure a Private Seller Contract During the Sale
Documentation is always vital when completing a transaction, and private car sales are no different. You can protect yourself when you purchase from a private party seller by drawing up a sales contract — also known as a bill of sale — and ensuring you and the seller sign it.
The bill of sale is a legally binding document that proves the seller transferred ownership of the vehicle to you in exchange for money. It should include important information like:
- The seller's full name and contact information
- The purchase price agreed upon
- The year, make, and model of the vehicle
- The vehicle identification number (VIN)
- Actual mileage on the odometer
- Provisions for warranties or promises made by you and the seller concerning the condition of the vehicle
Check the bill of sale closely and confirm all information with the seller to ensure that everything is true and correct.
Research Lemon Law Buyback Rules
Lemon law buyback rules are regulations that require manufacturers to repurchase a vehicle at full price, including any additional fees that the buyer paid.
Many states don't include coverage for private party car sales. Researching this information lets you go into the transaction fully aware of your protection, which saves you from losing money and transportation if the vehicle is a lemon.
Lemon Law Legal Process
You can take legal action to remedy your issues if you've purchased a lemon by following the lemon law legal process.
Finding a Lemon Law Attorney
Navigating state and federal lemon laws for private sellers can be confusing, so it's best to find a lemon law attorney as soon as you confirm that your car is a lemon. They can help you with the process from start to finish, including:
- Determining if you have an actionable case
- Gathering relevant evidence and documentation such as repair receipts
- Communicating and negotiating with the other party
- Packaging your case for court if needed
Filing a Lemon Law Claim
Next, you can file a lemon law claim. The first step is to document all issues and gather evidence. Then, you present the documentation to the manufacturer.
If they fail to resolve the issue within a reasonable time frame, you may be able to file a lemon law claim with your state's licensing authority (such as the attorney general) or consumer law center.
Determining Breach of Warranty Laws
You should also carefully examine the terms and conditions of the original warranty to determine if and when the breach of warranty occurred.
Common examples of warranty breaches include:
- Defective parts
- Failure of components to perform as required
- Inadequate materials used in construction
Lemon Law Arbitration
The final step in the lemon law legal process is lemon law arbitration — a process by which legal differences between you and the manufacturer or seller are addressed and settled.
Arbitration is typically set up and overseen by the federal government, and it can lead to several outcomes:
- Financial compensation, including additional fees like title fees
- Vehicle repair
- Provision of a replacement vehicle
- Cancellation of the sale
In most cases, either party must agree to arbitration before a resolution can take place.
Tips To Prevent Purchasing a Lemon Car
There are four practical tips you can follow to avoid purchasing a lemon car in a private party sale:
- Research the car's history
- Have the car inspected by a professional
- Test drive the car yourself
- Check the warranty status
Ensure a Safe and Secure Private Party Vehicle Purchase
You can protect yourself from purchasing a lemon by researching state and federal laws and doing research prior to selling.
Another excellent way to ensure a safe and secure private party vehicle purchase is to use a private party car purchase checkout solution. Such a platform can handle the entire purchasing process for you so you can rest assured you get a safe, properly working car.
This article was written by Andrew Rohrlich. As a brand and product marketing expert, Andrew Rohrlich has crafted products, experiences and communications for household names like Gap and for multiple automotive technology businesses. For nearly a decade Andrew has studied automotive retail in depth from a customer point of view and aggregated the industry’s best research, thought leadership and know how to provide credible and important information to auto shoppers and sellers.