Beware of 'Lemon Laundering'

“Lemon laundering” is a derogatory term that describes the practice of selling defective vehicles to consumers—lemons that dealers have been forced to buy back from purchasers—without informing the consumer that their newly acquired used car is actually a repurchased lemon. There are many states that now require such vehicles be branded with a notation such as “lemon law buyback” so that subsequent purchasers will be aware of the vehicle’s history.

Unfortunately, there are ways manufacturers can get around these laws. One primary method is that of a manufacturer or dealer selling such vehicles at auctions “as is.” The auction usually takes place in another state not subject to the original state’s lemon laws, and because the vehicle has changed title several times prior to the auction, any notation that was once on the title has disappeared.

California’s Automotive Consumer Notification Act was the first state legislation requiring a permanently affixed label on the driver’s doorframe, forever branding a vehicle as a lemon. “A permanent decal identifies a lemon law buyback to prospective purchasers throughout the entire chain of ownership,” explained California lemon law attorney Norman Taylor. “The law prohibits its removal, and assists in informing California consumers they are purchasing such a vehicle, even if the title has been ‘washed’ in another state.”

Taylor has monitored such lemon laws closely for many years. He has been a lemon law specialist since 1987, and he and his firm, Norman Taylor and Associates, have handled over 8,000 cases for consumers with a 98 percent success rate. He is one of the leading lemon law attorneys in southern and all of California.

In spite of such laws, it is always prudent to fully find out a vehicle’s complete history before purchasing it. “Before purchasing a used car, investigate,” said Taylor. “Find the Vehicle Identification Number (VIN), and research the vehicle’s title history. For example, for a small fee you can get a title history of the vehicle you want to purchase from CARFAX Vehicle History Reports, AutoCheck, Consumer Guide, and others. You can also contact the car manufacturer.”

The moral of the story: Avoid the unaware purchase of a lemon law buyback. Before purchasing any previously owned vehicle, check the left front doorframe for a lemon law buyback decal, and if this is not present obtain the VIN and conduct a search of the title history.

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