Lemon Laundering

When a manufacturer buys back a lemon vehicle, what happens to it? Many consumers assume that the vehicle is scrapped and destroyed, but the truth is that an estimated 95 percent of lemon cars, lemon trucks, lemon RVs, and lemon motorcycles are resold. Sometimes potential buyers are given full access to information about the vehicle's history, and knowingly buy a returned lemon. In other instances, though, the high demand for late-model used vehicles lays the foundation for consumers to be duped into unknowingly buying a returned lemon. Misrepresenting or concealing the history of a lemon vehicle is known as "lemon laundering."

Lemon Laundering Laws and Regulations
Laws regarding lemon laundering vary widely from state to state; indeed, only 19 states mandate that a lemon's title carry a warning. Even states that have lemon laundering laws can differ in their definition of a lemon; some limit affected vehicles to those repurchased as a result of a Lemon Law claim, while others also include vehicles voluntary repurchased by manufacturers. Some consumer advocates have accused manufacturers of rerouting lemon vehicles and selling them in states that have more lenient laws about consumer notifications. Others say that manufacturers sell lemon vehicles at auction, and that unscrupulous people who purchase the lemons then resell them to unsuspecting buyers at retail prices. The result? A doubly sour experience.

In 1995, consumer groups filed a petition with the Federal Trade Commission, urging the FTC to address the problem of lemon laundering. The FTC launched the Vehicle Buyback Disclosure Project, and held a public conference where a variety of lemon laundering proposals were discussed, including one that would require manufacturers to re-register lemons that were repurchased (either voluntarily or as the result of a lemon law claim), and to make a notation that the vehicle was returned. Because consumer groups were concerned that a federal regulation would override stronger state laws and a consensus could not be reached about a strong federal regulation, the FTC did not take action on the matter.

Check Before You Buy
If you're considering buying a used car, there are a few steps you can take to protect yourself against lemon laundering. First, you can check the vehicle's history using AutoCheck or CARFAX. Both services provide a title check, odometer check, problem check, and registration check. While both services endeavor to keep up-to-date records, consumer advocates express concern that some information can still slip through the cracks. Second, you can take the VIN to a dealer and request a copy of the vehicle's repair history. Third, you can arrange for a vehicle inspection before you commit to buying it. Finally, keep in mind that, if the price of the low mileage used vehicle seems too good to be true, it probably is.

If You Have a Laundered Lemon
If you suspect that you own a laundered lemon, there are a number of avenues of legal recourse you can explore. Because different federal and state laws come into play, it's in your best interest to retain the services of a Lemon Law attorney to fight for redress on your behalf.
If the vehicle you purchased is relatively new, it may still be covered under the original manufacturer's warranty. Your purchase is also covered under the federal Magnuson-Moss Warranty Act. If you live in a state where there is a law regulating the resale of lemon vehicles, and you were never notified that the vehicle you bought was a lemon, you have cause of action on that front. If the title or other documentation didn't say the vehicle was a buyback, an express warranty exists that the vehicle was not repurchased by the manufacturer. Similarly, not disclosing a vehicle's repair or buyback history can be a violation of state Unfair and Deceptive Acts and Practices (UDAP) laws. If there are problems with the vehicle's title, they may be covered under state laws relating to the Uniform Commercial Code (UCC).
It takes a considerable amount of research to determine if a vehicle is a laundered lemon, and extensive knowledge to ascertain which legal avenue will give you the best chances of success. A Lemon Law attorney will be able to perform the necessary research and build a case that will enable you to get justice.

What are Your Rights?

If you own a lemon car, lemon truck, lemon RV, or lemon motorcycle, you have rights under your state’s laws, as well as rights under federal law. Although Lemon Laws vary from state to state, if your vehicle qualifies as a lemon, you may be entitled to:

*Have your vehicle replaced with an identical or comparable model *Receive a refund of the price you paid for the vehicle, less a deduction for mileage
*Reimbursement for other damages or costs associated with your lemon vehicle
*Other damages, as well as punitive damages

The interests of dealers and manufacturers
If you own a lemon, you’ve probably experienced enormous frustration when you’ve taken your vehicle in for repair. You may have asked yourself why the dealer or manufacturer simply doesn’t give you a replacement vehicle or refund. While this would happen in a perfect world, manufacturers and dealers want to save money. As a result, most of them use delay tactics or make you jump through hoops in the hope that you will either go away or that the Lemon Law time period (which differs from state to state, but is usually between one and two years after purchase) will expire. This is the reason why Lemon Laws were enacted in the first place.

The role of a Lemon Law attorney
Generally speaking, it's best to have an attorney represent you in your Lemon Law claim. While you don’t need a Lemon Law lawyer in order to file a claim, having one will significantly increase the chances of getting the settlement you deserve. Vehicle manufacturers have powerful legal teams that are adept at avoiding Lemon Law claims, and often only obey the law when they’re faced with the threat of a lawsuit by Lemon Law experts. When they are, they usually settle very quickly, since they know that the cost of going to court will be much higher. For these reasons, it's in your best interest to have an advocate who knows the law and works on your behalf.

Some states require that you go through arbitration before filing a lawsuit, while others mandate it only if the manufacturer's arbitration process is certified, and still others leave the question of entering arbitration up to the consumer. In addition, you are not necessarily bound by the decision of the arbitrator. Even if you decide to enter arbitration, it is a good idea to have legal representation.

A good Lemon Law lawyer will work on your behalf to get the compensation to which you’re entitled – typically in the form of a settlement. Your Lemon Law attorney should conduct a thorough investigation of your vehicle’s repair history, then present the manufacturer with a statement outlining your case and demanding full recovery. More often than not, the manufacturer will settle; if not, though, your Lemon Law attorney should be prepared to sue the manufacturer or enter into arbitration.

The costs of a Lemon Law attorney
You shouldn’t have to pay a Lemon Law lawyer to handle your Lemon Law case. That's because the law says that the manufacturer is responsible for paying the consumer’s attorney’s fees in successful Lemon Law claims. Most of the time, manufacturers pay legal fees as part of settling your claim. If your case goes to trial or arbitration, the court will order the manufacturers to pay attorney’s fees. Either way, you shouldn’t have to pay anything.

Remember, although you can file a Lemon Law claim on your own, it’s in your best interest to have an attorney to fight for your rights.

Lemon Law Tips and Pointers

If you’ve been dogged with vehicle problems and think that you have a lemon car, lemon truck, lemon RV, or lemon motorcycle, you have rights under your state’s Lemon Law, as well as under federal law. To get the best possible settlement and the greatest compensation, however, it’s extremely helpful to keep thorough records. When you do, you can easily prove that you have followed the procedures necessary to classify your vehicle as a lemon. Here are some tips to get you started:

Keep a logbook. Whether you use a spiral bound notebook or a computer spreadsheet, make a notation every time you speak to or visit the dealer or manufacturer. This proves that you have given them ample opportunity to fix the problem.
Write down every communication. In your logbook, write down the date and time, as well as the name, title, and phone number of the person to whom you spoke. Make an entry outlining the information and instructions you were given.

Keep track of your vehicle's performance. In your logbook, note the times and dates when the problems occur.

Note the days your vehicle is unavailable. In your logbook, record the dates you are unable to use your vehicle, either because it isn't in working condition or because it is in the shop for repair.

Keep repair records. This may seem obvious, but it's important to keep the original paperwork of all repair and maintenance orders – even those that may not pertain to the recurring problem with your vehicle. Never leave your vehicle at the dealership without a copy of the work order.

Keep every piece of written correspondence. Hold on to a copy of every letter and email you send, as well as proof of delivery. Some states require that you contact the car manufacturer via certified mail, so it’s important to understand your state’s laws. Keep a folder with correspondence and delivery documentation.

Use the Web. If you want to know if your lemon car or lemon truck has a history of problems, check the Technical Service Bulletins (TSB) for your vehicle at http://www.nhtsa.dot.gov/. TSBs alert dealerships to defects and repairs for certain models. Request that the dealer's service representative write your TSB request on your repair slip.

" What you need to know to get a good lemon law lawyer "

Lemon law lawyers act a lot like a detective on your behalf, their first task when they are retained is to reconstruct the entire history of your car, from the date of production to the time the case is opened. These lawyers will help you to determine:

• whether the vehicle was damaged at the time of delivery;
• if the financing paperwork can prove that there was an obvious fraud or deception committed against you;
• whether repairs were attempted by the dealer beforehand to cover up any defects;
• the time actually spent for each repair;
• the amount of money that was paid by the manufacturer for warranty repairs;
• whether that model has any known defects that the dealers knew about;
• Whether there are any actual service file notes that will reveal any unresolved, undisclosed safety concerns and other inquiries.

As you can see, the attorney you choose to represent you in your lemon law case is an extremely important part in the success or failure of your case. Now, since the lawyer will get paid whether you win your case or not it seems like a good idea to pick one that knows what their doing.

So, here are some things that you'll need to consider when you're shopping around for a good attorney to handle your lemon law case. For instance, you will want to get a consultation to figure out exactly what type of lemon case you have. After that, you can follow the tips I'm listing below to help you to find the right lemon law attorney to handle your case.

EXPERIENCE

You should make sure that the firm or lawyer that you choose has experience in handling your specific type of case. The law has become very specialized in lemon cases and you will need a law firm that is not new to this area. Otherwise they may not know how to get the best results for you. However, you should be wary of any law firms which use the term "experts" or "specialists" because they're not legally allowed to use those terms.

NUMBER OF ATTORNEYS

You should also ask how many lawyers in that firm are not only licensed in your state, but how many of those lawyers can actually handle your lemon law or other type of case. Just like in any other type of company, people get sick or leave for whatever reason. Since your case will likely take many months to resolve, you want to be sure there is another attorney in the firm who can take over if your own lawyer can't continue for any reason.

ATTENTION

You also want to make sure that you can meet your attorney before he or she represents you. Just like a doctor, a lawyer is a professional that you trust a very important part of your life to. Because of this, you should be wary of any firm which will not allow you to meet your attorney or those who give you the run-around. You should always know what is going on in your case.

LOCATION

You should also make sure that your lawyer is at least located in the same State where your case will be handled. In general, lawyers must be licensed in the State in which they are doing their legal work in order to practice. If the lawyer is not located in your state, he/she may have problems effectively representing your interests.

If your lawyer is forced to travel great distances to appear on your behalf, or if he/she is hiring someone else to make any court appearances on their behalf, you should consider whether this will influence his/her judgment when he/she confers with you about any settlement offer made by the opposing side.

REPUTATION

Believe it or not, a lawyer’s reputation is one of the most important things you need to consider when you make a decision. How other lawyers feel about his/her performance and more importantly how former clients feel will give you a good idea what that lawyer can do for you. Most lawyers will freely and willingly give you information about their reputation if asked and some will even provide you with proof of their track records if you request it. Also, if you know someone who has had to deal with a lemon case, you can ask them how their lawyer was with them. All of these things can help you in choosing your next lawyer.

COST

One thing you should consider is the cost of all this. Not all states will allow you to recover the whole amount of the lawyers fees under the state lemon laws, this is why I highly suggest you take the time to research the laws in your state. However, the Magnuson-Moss Warranty Act is a federal law that may allow you to recover the cost of hiring a attorney. If your state laws don't allow recovery of fees, or even if they do, you will still want to be sure that the cost of the lawyer is affordable because there is no guarantee that you will win your case once it gets to court. You need to be sure that you can afford the lawyer that you get. Since some will require a retainer, it is best to ask about this up front. For those that do not, know that you will either have to pay the fees along the way or out of the award at the end.

Now, here's the thing. If the attorney is any good and confident in their ability to win your case for you, they should be willing to take your case on a contingent fee basis. Which means if they don't win your case for you it won't cost you anything. The worst case scenario should be that you have to pay a down payment and make payments along the way. One other thing, make sure that if the fees are on a contingent basis that they are set fees and not a blanket percentage of your eventual award.

Personally, if I had to go thru all this again I'd only choose a confident lemon law lawyer who would take my case on a contingent fee basis. This is my own personal opinion though, you should always be sure to do the research required to know your rights, that way you can make your own decision based on your best interests.

So, now that we've covered all that, here are some quick questions that you should ask your lawyer before hiring them or even considering them. Check for quick and concise answers and ask them to put all in writing before you make any final decisions.

1. How many cases like this have you handled before and what was the result of those cases?
2. What are the resources that you and/or your firm have at your disposal?
3. Are you going to try to settle out of court or do you push for court trial?
4. What are any and all of the upfront fees? If there are none, how much of the settlement do you take upon trial end?
5. What type of billing procedures does your firm require, and do I get a detailed report in writing?
6. If you will be itemizing the costs, can I get a detailed and itemized written report of the costs each week?
7. Do you have a working knowledge of lemon laws in my state?

These are just some of the questions that you should ask before hiring your lawyer. You also want to be sure that they can provide you with details on what you have that will make your case for you. You don’t want a lawyer that just wants to make a few bucks, you want proof that you have a case that you can win, otherwise, you will not only be stuck with a car you can’t use, but you might end up having to make payments to a lawyer as well.

Is It A Lemon Car ?

"What has to be wrong with your car to qualify it as a lemon?"

The first thing you need to know in dealing with your new lemon car is whether or not it actually qualifies as a lemon. After all, it does no good to try to exercise your rights under your states automobile lemon law if your car isn't a "true lemon".

So, the question is, do you have a lemon car?...........Well, that's what we're going to answer here.

But first, what DOESN'T qualify as a lemon. Now, if the paint is just peeling, or if the light switch came out when you pulled on it, or if the car is starting to make strange noises, but it's safe to drive it doesn't qualify as a lemon.

If you found a bunch of stuff you don't like about your new car but none of them actually makes the car undrivable or dangerous, you don't have a lemon.
But, if the brakes don't work, or it won't go into reverse, or it won't start on cold mornings or hot afternoons, or the car barely runs at 30 mph when it should easily be going 50 mph, then you may have a lemon. This of course, only applies if you have given the manufacturer an chance to fix it.
In most states, 10 different defects during the warranty period do not automatically make the car a lemon. In some states, a single defect that might cause serious injury makes your car a lemon if the manufacturer cannot fix the problem within 1 attempt.
As a general rule if your car has a serious defect that is unrepairable or is still defective after giving the manufacturer a reasonable chance to fix it AND all this happened during the warranty period, you may well have a lemon on your hands. Of course this is just a generality, every state has it's own automobile lemon laws and you'll have to go by your state's lemon law guidelines to determine if your car qualifies as a lemon.
You may have a lemon, but if you do nothing to protect your rights, like keeping track of all repairs and giving the manufacturer a chance to fix the problem, you could lose all rights under the various state lemon laws.
Ok, so you've checked your state's lemon laws and you are pretty sure you've got a lemon. Now what? Well, it would probably be a good idea to be sure of exactly what your responsibilities are as a lemon car owner as well as the responsibilities of the manufacturer.

The Lemon Law Protects You and Your Family

If you think you have a lemon, then you probably do. Thankfully, you also have rights.

The Lemon Law, technically entitled the "Song-Beverly Consumer Warranty Act," protects residents of California from defective vehicles and allows Californians to take legal action against the manufacturers.
The Lemon Law is fairly straightforward and easy to understand. The manufacturer must either replace the vehicle or reimburse you an amount equal to the purchase price, if the manufacturer cannot repair your vehicle after a "reasonable" number of attempts.
A "reasonable" number of attempts is defined as the manufacturer being unable to repair the same defect after four tries. If the defect is "life-threatening or likely to cause serious bodily injury," however, you are only required to have two repair attempts. Additionally, if the vehicle was inoperable for a cumulative total of thirty days, so long as the repairs are attempted within the manufacturer’s warranty period, this would be considered "reasonable" under the Lemon Law.
The manufacturer must pay for license fees, rental expenses, towing, and out of pocket repairs in addition to replacing the vehicle or reimbursing the vehicle purchase price. Attorney's fees and other losses may be paid.
But beware - there are conditions. The use, value, or safety of the vehicle must be affected by the defects, and the vehicle must still be under the original manufacturer's warranty. For example, under the Lemon Law, a constantly broken cup holder would not qualify.
Different laws also apply to off-road vehicles like motorcycles, motor homes, and other such vehicles. The manufacturer is additionally entitled to take a deduction for mileage accrued on the vehicle prior to the defects occurring, and other restrictions can be applied.
The ability to rid yourself of your lemon and regain most, if not all, of the cost of buying the vehicle (including loan or lease expenses incurred post-purchase) are advantages for you. You could also get back a good portion of other losses resulting from the malfunctioning vehicle. This proves that the Lemon Law truly is a law designed to protect the consumer.