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Uh Oh! Your Company Vehicle Is a Lemon in California. What Now?

By: Lyle Small


lemon law

In California, the Song-Beverly Consumer Warranty Act, more commonly referred to as the California Lemon Law, is designed to offer protection to consumers of goods that are still under a manufacturer’s warranty. While this law is often discussed in the context of personal vehicles, it’s important to know that it may also apply to company vehicles, under certain conditions. However, the protection for company vehicles is not as broad as the coverage for personal vehicles. What can you do if your company vehicle is a lemon in California?

Does Lemon Law Apply to Your Company Vehicle?

To determine if your company vehicle qualifies for protection under the California Lemon Law, there are several factors to consider:

  • Weight: The vehicle must have a gross weight under 10,000 pounds.
  • Usage: It must be used primarily for business purposes.
  • Fleet Size: Generally, the company must have five or fewer vehicles registered in its name in California.
  • Vehicle Type: The Lemon Law covers new and some used vehicles that are still under the original manufacturer’s warranty.
  • Duration of Ownership: The problems with the vehicle must occur within a certain time frame or mileage limit, typically within the first 18 months or 18,000 miles, although this may vary based on the warranty specifics.
  • Repeated Repair Attempts: You must give the manufacturer or its agent an opportunity to repair the vehicle. The law usually requires a reasonable number of repair attempts, which may include at least two attempts to fix a warranty problem that could cause death or serious injury, or the vehicle must have been out of service for more than 30 cumulative calendar days for repair of warranty problems.
  • Substantial Impairment: This point is crucial; the defect must substantially impair the vehicle’s use, value, or safety. If the problem is a minor annoyance, the Lemon Law likely does not apply.
  • Manufacturer’s Warranty: It’s not enough that the vehicle still be under warranty—there must be an active issue that is covered by this warranty. It means that the problem needs to be one that the warranty is meant to address and not due to wear and tear, unauthorized modifications, or damage from an accident.

If your company vehicle is identified as a lemon, the manufacturer is usually required to either replace the vehicle with a new, comparable vehicle or refund the purchase price minus a deduction for the use of the vehicle before the first repair attempt for the warranty problem.Driver man in front of wrecked car in car accident. Scared man holding his head after auto crash. Tragedy car collision. Dangerous road traffic situation.

Steps to Take with a Lemon Company Vehicle

According to the experienced lemon lawyers at Young & Young APC explain the steps you should take if your company vehicle is a lemon:

Document the Problems

Create a detailed record of all issues pertaining to the vehicle. Make sure to include dates, detailed descriptions of the problems, and any communications you’ve had with the dealership or manufacturer. Preserve all repair orders and service documents. These will serve as evidence if you need to present your case.

Pursue Repairs

Under the Lemon Law, the manufacturer is given a reasonable number of attempts to repair the vehicle. Generally, this means:

  • At least two attempts to fix a warranty problem that could result in death or serious injury, or
  • At least four attempts to fix the same warranty problem, or
  • The vehicle is out of service for more than 30 days while under warranty for various problems.

It’s imperative that you report issues as they arise and persist in getting them addressed as per warranty terms.

Notify the Manufacturer

If the problem persists after reasonable attempts to repair, it’s time to directly notify the manufacturer in writing. This notification should detail the problem, the history of repairs attempted, and your request for a remedy under the California Lemon Law.

Consider the Manufacturer’s Offer

The manufacturer may offer to replace the vehicle or refund the purchase. If the manufacturer is unresponsive or unwilling to offer a satisfactory resolution, this is where the protections of the Lemon Law can truly take effect.

Understand Potential Resolutions

If you prevail in your Lemon Law case, you might receive a replacement vehicle or a refund. The refund would typically include:

  • The vehicle’s purchase price or lease payments made
  • Collateral charges like taxes and registration fees
  • Any incidental or consequential damages related to the lemon vehicle
  • Minus a deduction for use before the first repair attempt

Dealing with a lemon company vehicle can be a frustrating experience. However, knowing your rights and the proper steps to take in California can significantly smooth the process and lead to a satisfactory resolution. Keeping good records, following through on repair attempts, and seeking experienced legal advice are critical to navigating the complexities of the California Lemon Law. Remember, while the protections for company vehicles might be specific, they still exist to guard businesses against the detriments of a lemon vehicle.

Published: April 10, 2024

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