Los Angeles, California – After 50 years of lemon law protections for used cars, the California Supreme Court issued a ruling that redefines the scope of the state’s Lemon Law, impacting consumers who purchase used vehicles with remaining manufacturer warranties. In the case of Rodriguez et al. versus FCA US, LLC, the court determined that a motor vehicle purchased with an unexpired manufacturer’s warranty does not qualify as a “new motor vehicle” under the Song-Beverly Consumer Warranty Act, unless the warranty was issued at the point of sale, like a Certified Pre-Owned (CPO) Vehicle.

The decision, announced on October 31, 2024, by Justice Liu and concurred by all justices, is a significant departure from previous interpretations of the California Lemon Law, which have provided robust protections for consumers experiencing defects in vehicles still covered by manufacturer warranties regardless if the vehicle was purchased new or used.

The case arose from a dispute over a two-year-old car with more than 55,000 miles, purchased by plaintiffs Everardo Rodriguez and Judith Arellano from a used car dealer in Fontana, CA. Despite the car having an unexpired manufacturer’s warranty, it repeatedly suffered engine problems that could not be repaired after numerous attempts. The plaintiffs contended that their car was a “new motor vehicle” because it was sold with a manufacturer’s new car warranty. However, the manufacturer, FCA US, LLC, argued that the refund-or-replace provisions of the Lemon Law did not apply as the vehicle was not “new.”

The trial court and Court of Appeal sided with FCA, a stance now affirmed by the Supreme Court. This decision clarifies that the Lemon Law’s enhanced remedies, including the refund-or-replace provision, are reserved for vehicles that are sold with a new car warranty originating at the time of sale, like a demonstrator or CPO. The court reasoned that, by legislative design, there is a distinct separation between the protections for new and used products, with the Song-Beverly Act reserving certain rights specifically for buyers of new vehicles.

The implications of this ruling are far-reaching for consumers in California. Wirtz Law Lemon Law Attorneys warns that potential used car buyers should exercise heightened caution. While the warranty may still allow for repairs, there is no longer any enforcement measure when the repairs fail. The prospects of a full refund or vehicle replacement under the Lemon Law are gone now for most used cars.

The decision, according to attorney Richard Wirtz along with other prominent consumer advocates, will leave many buyers of used cars vulnerable if significant defects arise. They argue that the protections consumers assumed when they purchased their vehicle that were in place with the presence of an unexpired manufacturer’s warranty are no longer available. In contrast, automotive industry supporters are now celebrating that the ruling allows them to escape lemon law replace-or-refund responsibility for used cars with unrepaired defects. No longer do automakers need to get unrepaired unsafe defective used cars off of California’s roads.

As it stands, Californians buying used cars with remaining manufacturer warranties will have to rely on other legal avenues, such as the California Uniform Commercial Code or the federal Magnuson-Moss Warranty Act if they encounter persistent issues with their vehicles.