In abstract
Californians who buy a clunker automotive in 2025 face a complicated 12 months as new lemon regulation guidelines take impact and the state Supreme Courtroom restricted guarantee protections for used automobiles. Lawmakers are revisiting the principles, however shoppers may see weaker protections till new legal guidelines are handed.
The 12 months 2025 is shaping as much as be a complicated one for Californians unfortunate sufficient to purchase a brand new or used automotive that seems to be a clunker.
Beginning Jan. 1, automotive consumers who buy a defective car must navigate a brand new model of California’s “lemon law” that for 5 a long time has given shoppers the appropriate to demand automotive firms repair or exchange faulty automobiles they promote.
That’s, until lawmakers rapidly move a regulation that enables a number of the automotive firms to choose out of the brand new necessities.
The confusion stems from a regulation Gov. Gavin Newsom reluctantly signed in late September, after the invoice was rapidly jammed via the Legislature within the waning days of the session following secret negotiations between lobbyists.
Newsom stated it was essential to deal with the issue of California’s courts getting clogged with lemon regulation circumstances, at the same time as critics stated the invoice considerably watered down shopper protections.
However Newsom stated he signed it solely after lawmakers stated they’d introduce laws subsequent 12 months to make the reforms voluntary for automakers.
Lawmakers have already launched laws that they are saying meets Newsom’s calls for. It’s now anybody’s guess how lengthy it can take the invoice to make it via the Senate and the Meeting and get Newsom’s signature. In the meantime, parts of the brand new lemon regulation take impact Jan. 1; others in April.
Including to the confusion, a month after Newsom signed the brand new lemon invoice, Meeting Invoice 1755the California Supreme Courtroom dominated that the state’s lemon regulation doesn’t require producers to honor a automotive’s guarantee when it’s re-sold as a used car. Earlier than the Supreme Courtroom’s ruling, courts had interpreted the lemon regulation to require producers to exchange or restore a faulty used automotive or truck if the clunker was offered inside the window of its authentic new-vehicle guarantee.
The justices stated that if Californians have an issue with how they’ve interpreted the statute, state lawmakers are welcome to jot down a brand new invoice.
“Those arguments are best directed to the Legislature, which remains free to amend the definition of ‘new motor vehicle’ to include used vehicles with a balance remaining on the manufacturer’s new car warranty,” the courtroom wrote in its Oct. 31 opinion. A minimum of one lawmaker has recommended to CalMatters he and his colleagues may take the courtroom up on that suggestion.
Because the Legislature kinds this out, Rosemary Shahan of Shoppers for Auto Reliability and Security stated automotive consumers subsequent 12 months are going to have a troublesome time determining what to do in the event that they drive a lemon off the lot.
“It’s going to be really confusing for consumers,” she stated.
Lemon regulation circumstances clog California courts
California’s lemon regulation defines a “lemon” car as one which has severe guarantee defects that the producer can’t repair, even after a number of makes an attempt. The lemon regulation applies solely to disputes involving the producer’s new car guarantee.
If the producer or vendor is unable to restore a severe guarantee defect in a car after what the regulation says is a “reasonable” variety of makes an attempt, the producer should both exchange it or refund its buy worth, whichever the client prefers, in line with the California Division of Shopper Affairs.
Disputes could be resolved via arbitration or in courtroom if a shopper sues. The brand new lemon regulation was a compromise between U.S. automakers, shopper attorneys and judges who got here collectively to deal with a rising backlog of lemon regulation circumstances within the state’s courts.
The variety of such circumstances in California courts climbed from almost 15,000 in 2022 to greater than 22,000 final 12 months. In Los Angeles County, almost 10% of all civil filings at the moment are lemon regulation circumstances.
Proponents argue the invoice Newsom signed will pace up the method of getting shoppers a working car, whereas setting new procedural guidelines for the litigation course of that may ease the burden on courts.
However Shahan and different critics argue the modifications will primarily profit U.S. automotive firms, since they’re those mostly sued underneath the state’s lemon regulation on the expense of shoppers. International automotive firms largely opposed the measure.
Shahan says the statistics on lemon regulation circumstances present why U.S automakers wished the rule modified. U.S. automotive firms have a considerably greater variety of lemon regulation circumstances in California than their international counterparts.
It’s additionally why, if lawmakers move the invoice Newsom desires, the international firms are possible to decide on to abide by the unique model of the lemon regulation.
Within the meantime, till lawmakers move the pending laws, consumers who buy any faulty new car may have much less time to sue, and so they’ll get much less cash from rebates, in line with Shahan and different critics.
The brand new guidelines additionally shrink the interval they’ll use the lemon regulation to simply six years as an alternative of the whole lifetime of a car’s guarantee, which might last more, Shahan stated.
And due to the Supreme Courtroom’s ruling that stated new car warranties don’t cowl the automotive as soon as it’s resold used, plaintiffs similar to Mariana Alvarado Rodriguez at the moment are feeling the squeeze.
“It’s going to be really confusing for consumers”
Rosemary Shahan, Shoppers for Auto Reliability and Security
Courtroom ruling impacts used lemon car disputes
In 2021, Alvarado Rodriguez, a seasonal farmworker who lives in Tulare County, bought a 2018 GMC Sierra 1500 with 40,002 miles from a Fresno County automotive vendor for $25,000, in line with courtroom information.
Nearly instantly after she drove it off the lot, she stated the truck began having mechanical issues that she claims ought to have been coated underneath the car’s warranties. However she stated the automotive’s maker, Common Motors, refused to honor them.
“I kept making payments,” she stated in Spanish. “Then … I finally decided to get an attorney and told the dealership, ‘That truck, it just doesn’t work.’ ”
A Fresno County decide tossed her lawsuit a 12 months later after the Fourth District Courtroom of Attraction dominated in a separate case that warranties that may apply to new vehicles don’t carry over if the car is offered once more. The Supreme Courtroom affirmed that judgment.
Alvarado Rodriguez stated she nonetheless doesn’t have dependable transportation for when she returns to work this spring within the fruit-packing sheds.
“The process has been so long,” she stated. “It’s really, really affected me.”
Democratic Sen. Tom Umberg of Santa Ana is among the authors of the brand new lemon regulation reforms slated to take impact subsequent 12 months. He additionally co-wrote the brand new laws in December to deal with Newsom’s issues. For now, it doesn’t handle the Supreme Courtroom’s ruling that impacted used car guarantee claims like Alvarado Rodriguez’s.
He stated lawmakers will possible take that subject up as properly once they reconvene after the vacations.
“I would expect that there would be further conversation,” he stated. “At least it’s my point of view that you don’t want consumers to be hoodwinked.”
Study extra about legislators talked about on this story.
CalMatters reporter Sergio Olmos contributed to this story.
