Lemon laundering can hurt used car buyers

Is a used car everything the seller says it is? Be careful not to purchase a laundered lemon law buyback vehicle.

More below.

Lemon laws can be circumvented by used car dealers. Be careful.

Buying an automobile is not a process most people enjoy. Cars are expensive, and if you choose poorly, yo are stuck with the car for quite some time. So you want to buy one that’s comfortable, suits your needs and is mechanically reliable. Fortunately for buyers, every state now has some version of a lemon law, designed to protect buyers from vehicles that are both mechanically unreliable and seemingly unrepairable. If a vehicle spends a month or so being repaired during it’s warranty or needs three or more repair attempts to fix the same problem, most states require the manufacturer to either replace it or refund the purchase price.

But what about used cars? Buyers of used cars are generally on their own, but some states, such as California, have passed separate laws protecting buyers of used cars. Not every state has such protections, as that sort of legislation is still in its infancy. There is a small amount of protection available, however. Most, if not all, states have strict regulations regarding how manufacturers dispose of vehicles that have been determined to be lemons. These vehicles, returned to the manufacturers by their original owners, are usually repaired and resold. And most states require that these vehicles be prominently branded as such, usually on the title. In addition, most states also require that any dealer selling such a vehicle must disclose the vehicle’s history to any potential buyer.

That sounds like a good idea. What if something goes wrong?

Unfortunately, something often goes wrong, and that problem usually involves what is known as a “laundered lemon.” While most states do require strict declaration of a vehicle’s history and that the title be marked, not all states do. Some dealers have been known to buy a known lemon, title it in a state that has no such requirements, and then transfer it back to a state that requires that lemon law vehicles be branded as such. The stop in the other state usually strips, or “launders” the vehicle’s history as a known problem.

And the buyer gets stuck. There have been numerous cases in the past few years of people innocently buying used vehicles from dealers that turned out to have notorious history as lemons. When the buyers inquired about the history of these cars, they were often told “We bought it at an auction; we don’t know.” That may or may not be true, but the buyer has no way of knowing.

While the used car market still carries a “buyer beware” mentality, there are some things a buyer can do. Them most important thing would be to do a check on the car’s Vehicle Identification Number, or VIN. There are several companies, such as Carfax, that can use the VIN to trace the car’s history. It only costs a few dollars to use the service, but if it spares you thousands of dollars in repair costs, then the money is well spent.

If you own a vehicle, you should protect your purchase. Vehicle insurance is costly, but why pay more than you have to? InsureMe can provide an immediate price quote from an insurance company near where you live at a reasonable price.