The lemon laundering problem created by manufacturers is not limited to
just those vehicle that are formally determined to be lemons in a lawsuit.
It includes all vehicles with a history of defect, or known to the manufacturer
to be substantially defective. It includes so-called goodwill buybacks
and trade assists completed with financial assistance from the manufacturer
or its financial arm (such as GMAC, which is affiliated with GM).
It doesn’t matter whether the manufacturer bought back the vehicle
due to an arbitration award, a court order, or so-called customer satisfaction.
It doesn’t matter what the manufacturer calls it. If it’s
a lemon, any potential secondary owner who might end up with the vehicle
should be warned. Lives may well hang in the balance.
Some states, including California, already requires title banding and resale
disclosure even for goodwill buybacks, in which the manufacturer has never
formally acknowledged an obligation to take back the vehicle.