Beware the Laundered Lemon

The owners of the former Chuck Van Horn Dodge dealership in St. Nazianz, Wisconsin recently had to pay $93,600 in compensation to people who unknowingly bought "manufacturer buyback" vehicles there. Such buybacks are “lemons” that manufacturers or dealers were forced to purchase back from consumers, and in this case were re-sold without required disclosures to unwitting buyers.

The violators had to buy back some vehicles from its customers and pay compensation to others as a settlement. The Wisconsin Department of Transportation is drawing up an agreement intended to provide assurance that the violation won't happen again. The agreement, which should be completed in the next few weeks, remains on file with the state and provides for swifter, stricter punishment in the event of any future violations.

Like many states including California, Wisconsin is actually required to inform a buyer if the car being purchased is a lemon that was previously bought back.

“Many states require the manufacturer to brand the title of the vehicle, permanently, with a notation such as ‘lemon law buyback,’ so that subsequent purchasers will know about the vehicles history,” said leading California lemon law attorney Norman Taylor.

Taylor understands the regulations well. He has been a California 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.

“Consumers need to know when a vehicle has a history of defects and may be unsafe, unreliable or very costly to operate and repair,” Taylor explained. “Lemon law disclosures advise consumers of possible latent defects in the used vehicles they are thinking of buying. This information helps consumers make informed decisions, and also prevents fraud.”

California was the first state to require a permanently affixed label on the driver’s doorframe identifying a lemon law buyback to prospective purchasers throughout the entire chain of ownership. A document or set of documents indicating a vehicle’s previous history should also be included with the vehicle’s buyer’s guide.

There are also additional measures a consumer can take when purchasing a used car. “Before purchasing a used car, investigate,” Taylor advised. “Find the Vehicle Identification Number (VIN). Once you have that, there are a number of ways to research the vehicle’s title history. For example, for a small fee you can get a title history from CARFAX Vehicle History Reports, AutoCheck, Consumer Guide and others.”

Before buying a previously-owned vehicle, be informed if you are purchasing a lemon-law buyback. And if somehow you’ve gotten stuck driving a lemon, contact a qualified lemon law attorney right away.

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