Lemon Law Basics: Chrysler Lemon Laws

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Lemon Law Basics: Learn how to protect yourself

Chrysler's Lemon Law Buyback Scandal

Because each state has different regulations regarding lemon laws, it is possible for automobile manufacturers to avoid some of the sections of the law that are intended to protect consumers. This was brought to light in 1996, when the Attorney General brought a case involving Chrysler's lemon law buyback policy. According to the lawsuit, Chrysler recouped a portion of the losses it incurred from their legal obligation to buy back lemon vehicles by reselling them to consumers without proper warning. This resulted in consumers who thought they were buying brand new vehicles falling prey to defects that were already identified as irreparable in Chrysler's lemon law suits.

Although there is nothing wrong with reselling most lemons, Chrysler's lemon law suit was brought because they did not notify the new owners of the vehicle's status. If the defects are minor, buying a lemon can be a good way for a consumer to save money on their vehicle. However, most states require that the vehicle's title be branded with the information that the vehicle is a lemon buyback, the consumer should be given a written list of all of the vehicle's known defects, and the vehicle should come with a warranty. It is estimated that Chrysler's lemon law resale suit involved more than 45,000 vehicles sold for over $1 billion, some of which had potentially life-threatening defects.

Consumer groups have lobbied for more standardized lemon laws that could help to cut down the number of undisclosed lemons being sold. In the meantime, in order to avoid being a victim of a scandal similar to Chrysler's lemon law resale scheme, it is a good idea to check a vehicle's identification number before making a purchase. There are a variety of free internet sites which will help you determine if any repair attempts have been made on the vehicle, and which will inform you if it was ever registered as a lemon. Taking this simple step, even if you believe your vehicle is brand new, can save a lot of hassle in the long run.

Each state also has different lemon laws so be sure to check out the lemon laws for your particular state.