The California Lemon Law and Certified Pre-Owned Vehicles
Signs and banners publicize certified pre-owned (CPO) vehicles at big and small dealerships throughout California. What is a CPO vehicle? At its most basic, a CPO vehicle is one that has been inspected carefully by an authorized dealership and given an extended factory warranty. Most of the major manufacturers – such as Toyota, BMW, Mercedes-Benz, Honda, etc. – have certified pre-owned (CPO) programs. The CPO programs can be a good deal for consumers looking to avoid the heavy depreciation that hits new cars when they are driven off the lot for the first time.
Sounds great, right? A lot of times, it is; it's a great deal from which all parties walk away happy. Sometimes, however, the deal goes sour. Fortunately, the California Lemon Law covers vehicles that prove to be “certified lemons.”
A common misconception is that the lemon law only covers new vehicles and only if the defect appears in the first year or two. California lemon law is broader than that, however. The formal name of California’s lemon law, “The Song-Beverly Consumer Warranty Act,” hints at the key to its application. Specifically, if a vehicle is sold with a warranty, then it is covered by the lemon law, regardless of whether the vehicle was purchased new or used. The scope of the warranty may dictate how much help the lemon law will be to the consumer, but it will still be of some help. California’s lemon law states that "[i]f the manufacturer or its representative in this state is unable to service or repair a ... motor vehicle . . . to conform to the applicable express warranties after a reasonable number of attempts, the manufacturer shall either promptly replace the new motor vehicle . . . or promptly make restitution to the buyer. . . However, the buyer shall be free to elect restitution in lieu of replacement." (Cal. Civ. Code, § 1793.2(d)(2).)
So if there is an express warranty – even if that warranty is an extended CPO warranty and not the manufacturer’s original warranty – and the manufacturer or its representative cannot repair the vehicle to conform to the CPO warranty after a reasonable number of attempts, then the vehicle might qualify for protection under the California Lemon Law. (I say "might" only because there are always exceptions. For example, if the consumer abused the vehicle and that caused the defect, the manufacturer would have a good defense to the case.)
Word on the street is that the manufacturers would like to pass a law exempting CPO vehicles from the lemon law. Consumers and law makers should oppose any such effort. The principle is simple: the manufacturers should not be allowed to have it both ways. If they want the benefits of being able to market and profit from their CPO programs, then they should stand behind them. If the Manufacturers are worried about the lemon law, then they should make sure that the oversight of their CPO programs is sound and that consumers are getting what they bargained for – a superior used vehicle with a dependable extended warranty.
