California lawmakers scramble to fix ‘lemon’ vehicle law — again
California's Lemon Law Under Revision as Lawmakers Tackle Competing Interests
California lawmakers are scrambling to fix the state's landmark "lemon" vehicle law, which for over five decades has been considered one of the best consumer protection measures in the nation for defective vehicles.
Recent legislation, signed by Governor Gavin Newsom in September, made significant changes to the law that were intended to speed up the process for resolving lemon law disputes. However, the revisions have created a contentious situation among car manufacturers, consumer advocates, and lawmakers themselves.
What Makes a Vehicle a "Lemon"?
Under California law, a vehicle is considered a "lemon" if, within 18 months or 18,000 miles after purchase:- - The manufacturer has attempted to repair the same warranty problem at least 4 times
- - The manufacturer has made at least 2 unsuccessful repair attempts for problems that could cause death or serious injury
- - The vehicle has been out of service for 30 days or more for warranty repairs
When a vehicle qualifies as a lemon, manufacturers must either replace it or refund the purchase price, according to the buyer's preference.
Court Backlogs Driving Changes
The number of lemon law cases in California courts has increased dramatically in recent years, with nearly 15,000 filings in 2022 and more than 22,000 in 2023. In Los Angeles County alone, lemon law cases now represent approximately 10% of all civil filings.According to consumer groups, just four manufacturers—GM, Stellantis (formerly Fiat Chrysler), Nissan, and Ford—account for more than 70% of California's lemon law cases. GM alone was responsible for nearly one-third of all lemon law suits filed between 2018 and 2021.
Controversial Legislative Process
The recent changes to the law were made through what critics call a "gut-and-amend" process, where legislators replaced a stalled child-support bill with entirely new lemon law legislation in the final days of the legislative session. The bill, AB 1755, was reportedly the product of months of private negotiations between major U.S. car manufacturers (primarily General Motors), consumer attorneys, and judges.Several car companies, including Tesla, Volkswagen, and Toyota, objected to being excluded from these negotiations. Consumer groups criticized the legislation as an attempt by frequently-sued manufacturers to weaken the lemon law.
Two-Track System Creates Confusion
When Governor Newsom signed the bill, he instructed lawmakers to quickly pass additional legislation that would allow car makers to opt out of the new process and continue operating under the original rules. This has created what some lawmakers call a confusing "two-tier" lemon law system."I think what we have is a messy and frankly — all due respect — illogical resulting situation," said Senator Roger Niello, a Republican whose family owns several car dealerships. "I feel like I'm in Alice in Wonderland, quite frankly. What's up is down and what's down is up."
The Senate Judiciary Committee recently approved the follow-up legislation, Senate Bill 26, despite reservations from several members who questioned the complexity of the revised system and its implications for consumers.
Consumer Protections at Stake
Critics of the revisions, including retired California Department of Justice attorney Susan Giesberg, argue that the changes weaken long-standing consumer protections."This lemon law has gone through Republican and Democratic (attorneys general) and governors with support over the years," Giesberg said. "It's just so shocking that under Democratic leadership that this would have gotten through."
Meanwhile, a recent California Supreme Court ruling has further weakened the lemon law by determining that manufacturers are not required to honor a car's warranty when it's resold as a used vehicle, if the defects appear after the resale.
As the April 1 implementation deadline approaches for the new law, lawmakers continue to debate how best to balance consumer protection with streamlining the legal process for lemon law disputes.
California's Lemon Law Arbitration Certification Program
The California Lemon Law Arbitration Certification Program is a state-run system that provides consumers with an alternative to going to court when they have disputes with manufacturers over defective vehicles.
What Is the Arbitration Certification Program?
The program is administered by California's Department of Consumer Affairs and certifies arbitration processes offered by vehicle manufacturers. These certified arbitration programs provide a way for consumers to resolve lemon law disputes without immediately resorting to litigation.How the Program Works
When a consumer believes they have purchased a "lemon" vehicle, they can:1. **Request arbitration** through the manufacturer's state-certified program
2. **Present their case** to a neutral third-party arbitrator
3. **Receive a decision** about whether their vehicle qualifies as a lemon under California law
4. **Choose to accept or reject** the arbitrator's decision
The program is designed to be more accessible, faster, and less expensive than going to court.
Benefits for Consumers
- **Free process**: Unlike hiring an attorney, the arbitration process itself doesn't cost the consumer anything- **Non-binding for consumers**: If you don't like the arbitrator's decision, you can reject it and still file a lawsuit
- **Access to the Lemon Law Presumption**: To claim the benefits of California's Lemon Law Presumption (which establishes guidelines for what constitutes a "reasonable" number of repair attempts), consumers must request arbitration
- **Quicker resolution**: Arbitration typically resolves more quickly than court cases
How to Use the Program
To use a manufacturer's certified arbitration program, consumers typically need to:1. Check if their manufacturer offers a state-certified program (this information is usually in the owner's manual)
2. Contact the California Bureau of Automotive Repair Hotline (800-952-5210) to request an application form and a copy of the manufacturer's arbitration program regulations
3. Submit their claim with documentation of all repair attempts
4. Attend the arbitration hearing (if possible)
Limitations to Consider
While the arbitration program offers benefits, it also has some limitations:- Consumers may receive less compensation than they might through litigation
- The rules of evidence and discovery are more limited than in court
- The manufacturer's arbitration program may have specific procedural requirements
Importance of Documentation
Regardless of whether a consumer chooses arbitration or litigation, thorough documentation is crucial. This includes:- - Service records for all repair attempts
- - Documentation of time lost from work
- - Records of how long the vehicle was in the shop
- - Detailed descriptions of the problems experienced
Larry Valenzuela/
CalMatters/CatchLight Local
For more than half a century, California’s “lemon” law was considered one of the best in the nation at giving consumers the legal right to demand car companies fix or replace defective vehicles still under warranty.
Now, California lawmakers are scrambling to repair recent changes they made to the law to satisfy the very car companies accused of making so many lemon vehicles that their lawsuits have been clogging the state’s courts.
But the “fixes” lawmakers are considering have angered consumer groups, frustrated legislators and seemingly divided the car makers between ones that face a lot of lemon lawsuits and the ones that don’t.
“I think what we have is a messy and frankly — all due respect — illogical resulting situation,” Sen. Roger Niello, a Republican whose family owns several car dealerships in the Sacramento area, said at a hearing last week. “I feel like I’m in Alice in Wonderland, quite frankly. What’s up is down and what’s down is up.”
With hope of granting relief to the courts, Gov. Gavin Newsom signed legislation last year intended to speed up the process, in part, by cutting years off the time consumers can exercise their rights to get their defective vehicles fixed or replaced. The law also puts more responsibilities on car owners to initiate claims instead of on the car companies.
But that law divided car makers because those that face fewer lawsuits wanted more time to prepare their best defense, and they felt it was too friendly to lemon law attorneys. So when he signed the bill, Newsom told lawmakers to act quickly this year to allow car makers to opt out of the new process and continue to work under the old rules.
Now, legislators are racing to pass the changes before the new law takes effect April 1. And they need a two-thirds vote of the Legislature to make the bill effective immediately.
Meanwhile, they’re hearing concerns about a confusing two-tier lemon law with fewer consumer protections that is primarily intended to help the companies facing the most lawsuits. Just four companies are responsible for more than 70% of California’s lemon law cases: GM, Stellantis (formerly Fiat Chrysler), Nissan and Ford, according to consumer groups.
It makes Susan Giesberg furious.
She spent almost a decade working on lemon law issues at the California Department of Justice. Now retired, she says she and her husband had to invoke their rights under the state’s lemon law under the old rules when their Chevy Volt broke down last summer.
“This lemon law has gone through Republican and Democratic (attorneys general) and governors with support over the years,” she said in an interview. “It’s just so shocking that under Democratic leadership that this would have gotten through.”
So how did it?
To answer that you have to go back to August, in the final chaotic days of the legislative session.
How lawmakers jammed through new lemon law
As lawmakers were rushing through hundreds of pending bills – most of which had been under discussion for months – two Democrats, Sen. Tom Umberg of Santa Ana and Assemblymember Ash Kalra of San Jose, changed a stalled child-support bill into new, never-vetted legislation that sought to reform how lemon law disputes are resolved. Stripping out stalled legislation, replacing it with a completely different bill and jamming it through at the last minute is disparagingly known in the Capitol as a “gut-and-amend.”
The lawmakers acknowledged that the bill, Assembly 1755, was the product of months of secret negotiations between U.S. car companies – primarily General Motors – consumer attorneys and judges who were frustrated that their courtrooms have become clogged with lemon law cases.
Between 2018 and 2021, GM’s 9,800 lemon law suits accounted for nearly one in three lemon law suits filed in California, according to the most recent stats from consumer groups. A company spokesperson in a written statement to CalMatters defended its record and the new California law.
“General Motors is continuously recognized by top consumer intelligence groups for vehicle reliability, quality, and customer loyalty,” GM spokesperson Colleen Oberc said in an email. She called the legislation “a pro-consumer bill that will help drivers get back on the road sooner, while also helping clear court backlogs, benefitting both customers and the auto industry.”
California defines a “lemon” vehicle as one that has serious warranty defects that the manufacturer can’t fix, even after multiple attempts. The lemon law applies only to disputes involving the manufacturer’s new vehicle warranty.
If the manufacturer or dealer is unable to repair a serious warranty defect in a vehicle after what the law says is a “reasonable” number of attempts, the manufacturer must either replace it or refund its purchase price, whichever the customer prefers, according to the California Department of Consumer Affairs.
Disputes can be resolved through arbitration or in court if a buyer sues.
The number of lemon law cases in California courts climbed dramatically since 2021. There were nearly 15,000 filings in 2022 and more than 22,000 in 2023. In Los Angeles County, nearly 10% of all civil filings are now lemon law cases.
Kalra and Umberg pitched their legislation last year as a way for auto companies and car buyers to settle their disputes quicker and without needing as much time in court.
But Tesla and several foreign auto companies including Volkswagen and Toyota that aren’t sued nearly as much said they were cut out of negotiations. They opposed the legislation.
Consumer groups, meanwhile, called the legislation a blatant and shameless attempt at weakening the lemon law by the very companies that get sued the most because they sell the most defective vehicles.
The bill passed easily even though some lawmakers complained they were uncomfortable with having to decide such a complicated, confusing piece of legislation so quickly.
“There wasn’t a single person who represents the people of California who knew about this and was a part of those conversations – for months,” Democratic San Ramon Assemblymember Rebecca Bauer-Kahan told her colleagues on the Assembly Judiciary Committee in the final days of the 2024 legislative session. “They dropped this in our lap, and they expect us to buy an argument related to the urgency that feels, to be honest, not real. And we’re supposed to move this in a week’s time.”
Newsom signed the bill in September, with an accompanying letter to lawmakers demanding they fix the law.
Meanwhile, just a few weeks after Newsom signed the bill, the California Supreme Court weakened California’s lemon law even more. The court ruled that the state’s lemon law doesn’t require manufacturers to honor a car’s warranty when it’s re-sold as a used vehicle.
Before the Supreme Court’s ruling, courts had interpreted the lemon law to require manufacturers to replace or repair a defective used car or truck if the clunker was sold within the window of its original new-vehicle warranty.
Uncomfortable lawmakers pass bill anyway
Fast forward to last week and the Senate Judiciary Committee’s first hearing of the new two-year session. There was one bill on the agenda: Senate Bill 26, the legislation that Newsom requested. The new bill does not address the state Supreme Court ruling.
And again the clock is ticking toward a new deadline.
The bill frustrated Sen. Aisha Wahab, a Democratic senator from Fremont. She told her colleagues she was worried the two-track legal system for different car companies would make an already confusing scenario for desperate car owners more difficult to understand.
“I’m very concerned about those first-time buyers, those immigrant communities, those people that don’t have the privilege to understand half of the stuff that was mentioned here,” she said. “It makes it too hard to begin with.”
Umberg, the bill’s author, suggested that after lawmakers pass this bill to meet the April deadline, they might need to pass other legislation to address lawmakers’ concerns as well as the Supreme Court’s used-vehicle ruling.
That didn’t sit well either.
“It’s unfortunate that protections for the consumers have gotten so complicated that we can’t more easily explain this law or the previous law, and I thought this was a clean-up (bill),” said Sen. María Elena Durazo, a Democrat from Los Angeles. “Now it seems like there may be a clean-up to the clean-up, maybe another clean-up, you know, after that.”
Nonetheless, the bill ended up easily passing the 13-member committee. Wahab declined to vote, and Democratic Sen. Angelique Ashby of Sacramento cast the only “no” vote. Ashby was one of the lawmakers who opposed last summer’s bill as well.
“I still believe that it does not do enough to remove unsafe vehicles from our communities,” she said of this latest bill. “In fact, I argue that this might have more unsafe vehicles in our communities, and I think I would not be alone in that assessment. I don’t think it holds manufacturers accountable.”
Sen. Niello said he had to reluctantly vote for Umberg’s bill since it would help negate – at least for some auto companies – the legislation he also opposed last summer.
He said he wished lawmakers would just scrap the bill Newsom signed last year “and bring all of the interested parties together” to re-negotiate reforms to the lemon law, which he said probably could use some after five decades.
Instead, he had to hold his nose and vote for another rushed bill.
“This is a perfect example of why we should not be approving legislation that is a gut and amend at the last minute of the end of session,” Niello said.
This article was originally published by CalMatters.
California Lemon Laws | DMV.ORG
Lemon Law in California
What is the California Lemon Law?
If your new car is spending more time at the repair shop than it spends with you, you might have a lemon on your hands. Thankfully, the California lemon law is in place to protect consumers facing a sour deal.
Generally, the lemon law covers new vehicles with serious defects/malfunctions for a certain amount of time or mileage. If your vehicle can't be fixed after a reasonable number of repair attempts by the manufacturer or its authorized dealer, you'll likely be entitled to a replacement vehicle of equal value or a total refund.
On this page you'll find a general overview of California's lemon law and what to do if you find yourself with a defective car.
What is a Lemon Car in California?
In California, a vehicle is presumed to be a “lemon" by the Song-Beverly Consumer Warranty Act if, within 18 months of the vehicle's delivery to the buyer (or 18,000 miles on the odometer):
- 2 attempts or more have been made by the manufacturer to repair a warranty problem that could result in death or serious injury.
- The manufacturer has attempted to repair the same warranty problem at least 4 times.
- The car has been out of service for 30 days or more for repair to warranty problems.
- Problems to the vehicle are not the result of abuse by the owner.
If your car qualifies as a lemon, the manufacturer has the responsibility of either:
- Replacing your vehicle.
- Refunding you for the vehicle's purchase price.
If your manufacturer refuses or unreasonably delays doing either of the above, you can:
- Request arbitration to resolve the matter.
OR - Hire a lemon law attorney.
Start Keeping Records
While many car dealerships/manufacturers are great about helping you get a lemon repaired or replaced, don't count on them to keep track of everything related to your problems. Keep records of all the time you've lost from work, time the vehicle has been in the shop, and the exact nature of any problems.
Look over each service write-up when you take your car in. Unscrupulous repair people have been known to switch a problem diagnosis, or attempt to report an ongoing problem as new, in order to buy the dealership more time on a possible lemon.
What to Do if You Have a Lemon
If the dealer won't help you adequately, turn to the manufacturer. Take these steps:
- Write a letter to the manufacturer asking it to buy back your car. This letter should be sent via certified mail, with a return receipt requested, to the address listed in your vehicle owner's manual.
- If the manufacturer balks at repurchasing your vehicle, you have two options: Hire an attorney that specializes in Lemon Law, or ask the manufacturer if it has an arbitration program.
- Check to see if the manufacturer offers an arbitration program by looking in your owner's manual, or by calling California's Bureau of Automotive Repair Hotline at (800) 952-5210. Request an application form and a copy of the manufacturer's arbitration program regulations.
- If at all possible, attend the arbitration hearing in person. You can either accept or reject the findings of the arbitration panel. Should you decide to reject the offer, or if the panel votes against you, don't despair. If you are not satisfied with the results, you can always file a suit against the manufacturer through the courts.
Hiring a CA Lemon Law Attorney
A lemon law attorney knows the ins and outs of the CA lemon law and can help you manage your case and receive the highest amount possible.
Other benefits of letting an attorney handle your case include:
- Your lawyer knows your consumer rights.
- You may end up getting a resolution much quicker than attempting to deal with the issue yourself.
- You will have more negotiating power with an attorney at your side that knows the law.
- Your attorney can handle correspondence with your manufacturer so you can avoid making statements that could damage your case.
What Is Arbitration?
Before deciding to hire a lemon law attorney, you may wish to consider arbitration. In the process of arbitration, a neutral arbitrator helps resolve the dispute between you and your vehicle manufacturer.
You can seek arbitration if:
- You've already attempted to resolve the dispute with your manufacturer.
- The warranty problem has not been repaired and is substantially hampering the use or safety of your vehicle.
- The problem is covered by the original warranty.
Benefits
- Arbitration is free.
- The decision is not binding for the consumer in California.
- It does not require you to hire an attorney.
Potential Drawbacks
- You may end up receiving less than the California Lemon Law allows.
- You may get stuck in arbitration for long period of time.
- The rules of discovery are limited in arbitration, which means it can be harder for the consumer to prove his case through evidence.
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