Lemon laws are regulations that protect consumers from defective products. A product becomes a lemon when the defects affect its use, value and safety. In California, lemon laws apply to all vehicles, including new or used vehicles. What matters is that the manufacturer’s new car warranty is still in effect. If you purchased a vehicle showing signs that it could be a lemon, you might want to pursue a claim and take legal action. However, you should try to avoid falling for the following potential fraudulent schemes:
Accepting arbitration
Arbitration might appear more practical than taking your lemon law claim to court. It is true. Private arbitration can be much more practical for the manufacturer and warrantor. Remember that arbitration is an alternative dispute resolution method where an arbitrator or a panel of arbitrators will decide on the outcome of your case. A binding arbitration decision prevents you from taking your lemon law claim to court. In nonbinding arbitration, the decision is actionable, but the opposing party can also use the decision as evidence against you in court.
You should also be wary of independent arbitrators. If your manufacturer or warrantor offers to sponsor the arbitrator, there is a better chance the arbitrator will rule in their favor. If they rule in your favor, you might recover less than what they owe you.
Signing documents that you do not fully understand
A manufacturer might use the easiest and cheapest route to repair your car. After a reasonable number of repairs, they would have to give you a full refund or replace the defective vehicle they sold you. Or they might offer to keep repairing your car. The manufacturer might try to offer you a warranty extension or a short-term reimbursement deal, which can come with a settlement and release agreement. They will ask you to sign the agreement, and thinking it is a favorable deal, you sign it. You may not realize you are already in the process of signing away your right to pursue a lemon law claim. It is a devious tactic that allows your manufacturer to compensate you for substantially less than what they owe you.
A manufacturer and warrantor can use different methods to trick you into agreeing to a less favorable compensation. Legal jargon and ambiguous terms and conditions can make or break your case.