How to Avoid Buying a Lemon Car

Like the sour fruit for which it’s named, a lemon car might look great on the surface, only to reveal a nasty surprise on the inside. Buying one of these defective new or used vehicles could leave you on the hook for costly repairs you never saw coming.

While your state’s lemon laws might make you eligible for a refund or replacement, some lemon cars are easier to fix. This could be good news if you have to hold on to it or if you’re thinking of intentionally buying a lemon car.

Read on to learn how to avoid getting squeezed, and how to decide whether it’s worth the risk.

What is a lemon car?

A lemon is a term for a bad car that is unsafe to drive. While the exact definition may vary from one state to another, it usually involves a significant defect covered by the warranty that affects the car’s safety, value or use. Examples of these types of defects include a faulty transmission, suspension system, engine or brakes. Typically, to qualify as a lemon, the manufacturer must be unable to fix the defect within a specified amount of time or attempts.

Lemon law basics

So you think you might have a lemon car on your hands — now what? Your eligibility for a refund or replacement will depend on several factors, including the laws in your state. Start by researching them at your local Department of Motor Vehicles, Attorney General’s office, or online at the Better Business Bureau.

It’s also important to check if your car’s make and model has been previously reported for any manufacturer defects, technical service bulletins, or recalls at the National Highway Traffic Safety Administration.

Other important factors determining your eligibility for lemon law coverage includes:

• Type of car: This can include whether the vehicle is leased, new or used, or if it’s a business or specialty vehicle such as an RV, ATV or motorcycle
• Timeline and mileage: You’re only allowed to file a legal complaint within a certain amount of time from purchase and under a specified maximum mileage. Those limits vary by state and can also depend on whether your car is used or new.
• Cost and number of repair attempts: If the malfunction can be easily fixed with an inexpensive part or within a reasonable number of attempts, you may not be able to claim that your car is a lemon.

If it turns out you’re not qualified under state laws, check your eligibility under the federal Magnuson-Moss Warranty Act, which allows you to sue for breach of warranty. You can also consider talking to an attorney to discuss your options.

Steps to avoid buying a lemon

It may not always be easy to predict whether your car will be a lemon, but there are steps you can take to avoid buying a clunker.

Ask for a vehicle history report

Many sellers will provide you a vehicle history report (VHR) free of charge if you ask for it, but you can also obtain it yourself for a fee from providers approved by the National Motor Vehicle Title Information System. Some private companies like AutoCheck or Carfax may provide additional information, such as accident and repair history.

In addition to outlining basic information like the car’s year, make and model, a VHR is a great way to spot potential red flags in a car’s history. These could include previous accidents and claims, manufacturer recalls, changes in ownership or odometer discrepancies. Here’s what you should pay special attention to:

• Title brands: This section tracks the ownership and status of the vehicle, including whether it’s ever been declared a total loss due to theft, flood or other damage. If the car has a salvage title, it’s most likely a lemon. Knowing the title status of your car is important so you don’t end up paying more than it’s actually worth or getting into a vehicle that could be unsafe to drive.
• Accident history: You should see a list of all previous accidents in this section, from minor scrapes and fender benders to major collisions. Take note: Damage to the car’s engine or frame could cause problems that persist years later.
• Owner history: If a VHR lists multiple owners in a relatively short time, that’s a red flag. It could mean previous buyers got rid of the car, rather than repair it, because the problems were too costly to fix.
• Repair history: This section includes a record of all repairs and maintenance, including oil changes. If you see a history of extensive repairs or a lack of regular maintenance, it may be worth taking a pass on your purchase.
• Safety recalls: A recall is when an automaker finds a safety defect and offers a free repair. If the VHR shows an open safety recall, the car might not be safe to drive until it has been fixed.

Test drive and look for red flags

Once you’ve determined that the car looks good on paper, it’s time to get behind the wheel for a test drive. This is an essential step to take before signing off on your purchase; if the seller refuses, it could be a sign they’re hiding something from you.

Make sure to drive the car at different speeds and on a variety of routes, including on the highway, so you can test factors like the acceleration speed, vehicle suspension, and braking system.

Bring a friend with you and ask them to turn on the car while stepping on the gas. If white, blue, gray or black exhaust smoke comes out of the tailpipe, this could indicate a serious problem with the car.

Listen for any unusual sounds the car makes: pinging, knocking, whining and grinding sounds could mean engine and transmission problems, while brake squealing or loud air rushing are also red flags.

A musty smell could be the result of interior water damage, while a burning or acidic smell could signal engine damage. Make sure to check the oil and rub a bit between your fingers; if you feel any grit or metal flakes, this could be a sign of damage to the engine bearings.

Get an independent inspection

If the car passes your initial test, you should have it professionally inspected, even if it’s already been certified by the dealer. Make sure to hire an independent, unaffiliated mechanic who can give you their expert opinion on whether it’s a good investment.

While a thorough car inspection may cost you between $100 to $200, it could pay off in spades. If the mechanic finds issues with the car, you could ask the seller to deduct the cost of those repairs from the selling price, if they’re repairs you’re willing to make.

What to do if you’ve bought a lemon car

If you end up with a lemon car, you should start by reaching out to the dealer or manufacturer for help. Follow the instructions specified in your warranty or service contract if you believe you have coverage for your vehicle’s issue. If you’re unable to reach an acceptable resolution, your other options include filing in small claims court, using a dispute resolution organization or contacting your state attorney general.

  Talk to the seller

Tell the seller about the problems the car is having and see if you can come to an agreement. In the best-case scenario, the car may still be under warranty, or the seller may agree to cover any needed repairs. If you catch a problem quickly enough, the car may still be covered under the seller’s return policy, if there is one.

  Request replacement or refund in writing

Write a certified letter to the seller or dealership manager, detailing what happened, when the problems began and what steps have been taken to repair the faulty vehicle. Explain that the defect(s) still exists, despite attempts to correct it, and that your next step will be to pursue a replacement or refund under your state’s lemon laws. This type of correspondence may be required by your state if you want to pursue legal action.

  Keep track of all repairs and communication

Keep a copy of all your correspondence and bills, from text messages and letters, to repair estimates and work orders. These might help support your case if you decide to pursue legal action later, as you’ll need to show you’ve given the seller sufficient chances to fix the problem.

Buying a lemon on purpose

If you’re more of a risk-taking type of deal seeker, you may be thinking of buying a lemon car, or one with a salvage or rebuilt title. If you’re lucky, the savings you’ll get on the purchase price could more than make up for the cost of repairs. If you’re handy with cars and have a good understanding of what’s wrong with the lemon, this may be a smart move.

But remember, these cars are usually sold as is, which means you’re on the hook if repairs turn out to be more expensive than expected. And usually, a lemon isn’t sour in just one spot: The car may have undiscovered issues, or a less-than-honest seller might disguise additional problems.