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If a vehicle is labeled a lemon in one state, because of inconsistent state laws on how lemons are handled, the vehicle can be sold in another state with no indication of the title or the history of repairs. If a vehicle is determined to be a lemon, it will be repurchased by the manufacturer, and because not every state marks the title of the vehicle with its lemon law status, the manufacturer can send the vehicle across state lines and “wash” its title, meaning they can sell the vehicle in that state without disclosing its lemon history.
A solution to this issue would be to have a uniform national policy on handling lemons, so that unwary consumers can be protected against buying dangerous vehicles with serious problems. In 1996, the Federal Trade Commission (“FTC”) considered making a nation-wide requirement that all lemons must be marked with that title. However, the requirement was met with opposition from the auto industry, so the agency backed off.
However, even if the FTC required states to mark the title of the lemon, the remaining issue is that states still have varied lemon laws, some much weaker in terms of consumer protection than others. This issue means if a vehicle crosses over to a state with a stronger lemon law, those consumers are still in danger, even if there were title marker requirements, as the vehicle could be a full-fledged lemon under their state’s laws, but could have passed for a perfectly operating vehicle in the state from which it came. According to a New York Times survey, only 19 states (including New York) require the title of a lemon to carry a “lemon” or “manufacturer buyback” warning.
A recent New York Times article detailing a Center for Auto Safety study concluded that one-third of states in the U.S. have weak lemon laws. The study found that the worst of the state lemon laws reside in Illinois and Colorado, where a manufacturer’s bad faith can result in no penalties, and courts may require plaintiff-consumers to pay the manufacturers’ attorney fees. In many of the states on the weaker end of this list, Jason Levine, the executive director of the Center, states that there might as well be no lemon laws on the books, indicating how few protections are being offered to the consumers in those states.
Under weaker laws, like in New York, the owner of the lemon may have a lessened payday after deductions from the amount to which they are entitled. New York received a grade of B+ from the Center, and lost most of its points due to these deductions. For example, if the vehicle qualifies as a lemon, the consumer is entitled to receive a replacement or refund, including the down payment, payments, registration, taxes, and incidental expenses, plus attorney fees. However, the manufacturer is entitled to a deduction of a usage fee for the value of the miles placed on the vehicle for every mile over 12,000.
Therefore, since there are clearly state lemon laws offering little-to-no consumer protection, consumers are left vulnerable to either purchasing a lemon from a state with weaker protections and higher standards of proof for a vehicle to be considered a lemon, or purchasing a car that has been branded a lemon, but the state does not require that the lemon carry a “lemon” warning.
Consumers will have a difficult time determining if the vehicle they are buying is a lemon according to their state’s lemon laws until they purchase the car and find out for themselves. However, they can check a vehicle’s history on services like Carfax, to doublecheck if a vehicle has been branded a lemon, but there may be gaps or delays updating this information online. In order to ensure their protection, consumers need a national database of lemon vehicles, where a vehicle’s status will be public knowledge. However, we have yet to implement such a database, and in many states, consumers are left in the dark regarding the vehicle on which they are about to spend thousands of dollars.
