Lemon Law Lawyer Blog

The excitement of purchasing a new vehicle is often tempered by the amount of money in fees and taxes involved. Some dealerships, especially motor home retailers, are quick to offer a “solution” to paying state taxes. Specifically, these dealerships will suggest that consumers agree to take delivery of their vehicle across state line and avoid paying state taxes altogether. Now, if the consumer is experienced in these types of transactions, it may prove to be a fair, arms-length purchase. But, if the consumer is being led into this tax-saving scheme for the first time, it may prove to be a risk that is not worth taking.

The most important risk is the fact that the consumer will probably be giving up the right to bring a lemon law claim under California’s Lemon Law, the Song-Beverly Consumer Warranty Act. Why is this important? It is important, because California’s Lemon Law is strong and pro-consumer and the consumer who gives up her California Lemon Law rights is giving up significant rights. In fact, many car makers will argue that by taking delivery across state line, say in Arizona or Oregon, the consumer is forever waiving their right to have a defective vehicle repurchased. If the manufacturer wins that argument, then the consumer may be limited to Commercial Code remedies, which may only be the cost of repair.

Second, is that failure to comply with the strict requirements for out of state delivery could subject consumers to California Franchise Tax Board penalties.

If you are looking at purchasing a “big ticket” item, such as a motor home or boat, be sure to weigh the benefits of out of state delivery tax savings carefully against the considerable rights you are jeopardizing.