What is the Lemon Law on Buybacks?

A new car, still under warranty, that has an irreparable defect is known as a "lemon." Under the Lemon Law, manufacturers are required to buy these vehicles back from consumers. Then, they are often resold to other buyers as used cars.

Disclosure

Many states -- including California -- have laws requiring sellers of used cars to clearly disclose to buyers that a car is a lemon law buyback. It may be on the certificate of title and the registration certificate, and it may be clearly marked on the vehicle itself.

Lemon Laundering

Some manufacturers have been known to engage in "lemon laundering," which is when they repair or replace the defective part and resell the car to the public without full disclosure. This is illegal and even dangerous -- if the car could be repaired so easily, it wouldn't have been a lemon in the first place.

What You Can Do

First, always ask the seller if the car you are purchasing is a lemon law buyback. Also consider getting the vehicle identification number from the dealer and checking out the history of a used car with a service designed for just that. Or you can take it to a service center for that make of car. They should be able to look up the history of the vehicle for you.