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Lemon Law for Used Cars in California

California's Lemon Law applies to used vehicles that are sold with a new car warranty, such as demonstrator vehicles or relatively new used cars. In addition, portions of the Song-Beverly Consumer Warranty Act apply to other used vehicles. There are also several other types of laws that can be used to help you in the event you discover that you've bought a used car lemon. First, the Federal Trade Commission (FTC) has what's called the Used Car Rule that requires dealers to provide consumers with a Buyer's Guide with warranty and other types of information. If the dealer has in any way failed to abide by the FTC Used Car Rule, you may have the basis for a legal claim

Second, each state has what are called Unfair and Deceptive Acts and Practices (UDAP) laws. If the dealer has, for example, made verbal promises or didn't tell you about issues relating to your used car, you may have a cause of action. Third, Arkansas' version of the Uniform Commercial Code may provide you with relief. Finally, the Truth in Lending Act and the Federal Odometer Act might also be valuable in obtaining lemon justice.

California also has a Car Buyer's Bill of Rights, which includes disclosure requirements and the opportunity for used car buyers to purchase a two-day cancellation option. Dealers must, for example, provide an itemized price list for items such as warranties and insurance if those items are being financed. In addition, the dealer can't be compensated by the loan company more than two percent for a loan term over 60 months and 2.5 percent for a loan term of 60 months or less. Finally, dealers must provide buyers with their credit scores and an explanation of how credit scores are used.

If you buy a used car for less than $40,000, you must be given the opportunity to buy a two-day contract cancellation option agreement. (This doesn't apply to motorcycles, private party sales, RVs, or business vehicles.)

If you choose to purchase the two-day cancellation option, it will cost:

  • $75 for a vehicle costing $5,000 or less
  • $150 for a vehicle costing more than $5,000, but not more than $10,000
  • $250 for a vehicle costing more than $10,000, but not more than $30,000
  • One percent of the purchase price for a vehicle costing more than $30,000, but not more than $39,999.99

The Car Buyer's Bill of Rights also prohibits car dealers from advertising a used vehicle as "certified" if:

  • The odometer does not indicate the actual mileage of the vehicle
  • The vehicle was a voluntary lemon buyback
  • The title was branded as a lemon buyback, manufacturer repurchase, salvage, junk, non-repairable, flood, or similar designation
  • The vehicle was damaged by accident, fire, or flood, unless it has been repaired to safe operational condition
  • The vehicle has frame damage or was sold "as is"
  • The seller failed to provide the buyer with a complete inspection report of all components inspected

Used Car Topics
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