There are plenty of reasons why you might lease a car instead of buying it. You may want a lower monthly payment, you might like getting to upgrade every few years, or you might want the security of knowing your car is always under warranty.
But what if your leased car is defective? You don’t own it, so what can you do? Is it even possible to get your money back after leasing a lemon?
Yes, it is possible. California law allows consumers to file lemon claims for leased cars similar to purchased vehicles. Here’s your complete guide on lemon laws for leases and how to file a claim for your defective vehicle.
What are Lemon Laws and How Do They Apply to Leased Cars?
California has some of the strongest warranty protections in the country because of the Song-Beverly Consumer Warranty Act. This law, combined with the Tanner Consumer Protection Act, requires carmakers to replace or refund defective vehicles that are still under warranty.
This is an important type of protection for consumers. Without warranty laws, manufacturers would have far fewer incentives to ensure that every vehicle is safe and reliable. The Warranty Act lets individuals hold these massive companies accountable for their mistakes.
Most claims are filed by people who have purchased cars, but not all. It is just as likely that your leased vehicle meets the criteria for a lemon claim. If your car is truly defective and your claim is successful, you could have your lease ended early and most of your payments refunded.
Qualifying Factors for Lemon Claims on Leased Cars in California
Whether you own or lease, you must prove that your vehicle qualifies as a lemon under state law. There are a few factors that must be present for a car to be considered defective.
Deadlines
There are a few critical deadlines involved in lemon claims. First, the vehicle needs to demonstrate a manufacturing flaw within 18 months or 18,000 miles of being leased. Problems that occur later may still be eligible for warranty repairs but not a full refund.
Second, you must file your lemon claim within four years of discovering the problem. Preferably, file while your lease is still active. If your lease expires before you choose to file your claim, your case becomes more difficult.
Substantial Defect
Warranty laws aren’t an excuse to return your car for no reason. The vehicle needs to have a substantial manufacturing defect to be eligible. “Substantial” means that it meaningfully affects the car’s safety, utility, or value. A scratch in the paint is not substantial, but heavily peeling paint that causes the frame to rust may be.
Warranty Coverage
The vehicle must have an active, unvoided warranty. Most manufacturers offer three-year warranties, which is also the length of the average lease, so this is normally not a problem. However, making aftermarket changes to your car or failing to perform routine maintenance can void the warranty, preventing you from receiving coverage.
Reasonable Opportunity to Repair
Finally, the manufacturer needs a reasonable opportunity to fix your car before you can file a lemon claim. There are three thresholds for what constitutes a “reasonable” number of repairs for leased vehicles:
- Two opportunities to fix potentially deadly problems
- Four chances to fix substantial but not dangerous issues
- Thirty days out of service for warranty repairs
If you’ve given the manufacturer multiple chances to fix the issue or your car has been out of service for at least 30 non-consecutive days, it may qualify as a lemon.
Step-by-Step Guide to Filing Lemon Claims for Leased Cars in California
You can start the filing process once you’ve confirmed that your car could qualify as a lemon.
- Research and gather necessary documentation. You’ll need receipts and repair records from the mechanics who attempted to fix your car and your lease agreement.
- Contact the manufacturer or dealer. Most manufacturers have dedicated hotlines for lemon complaints. You can reach out to this number to report your problem.
- Initiation of the dispute resolution process (e.g., arbitration). In California, lemon claims begin with mandatory arbitration. During this process, you will present your case to the arbitrator to demonstrate that the car is defective.
- Preparation for a legal lemon claim (when necessary). If arbitration is unsuccessful, you may need to file a lawsuit against the manufacturer to get your lease payment refunded and your lease canceled.
Having a good California lemon lawyer is crucial for this process. Carmakers have entire legal teams dedicated just to fighting back against warranty claims. Having your attorney evens the playing field.
Understanding the Possible Outcomes of Lemon Claims for Leased Cars
If you file a successful claim for a leased car, you will be able to choose one of several possible remedies:
- Vehicle replacement: In this case, your lease remains active, and your payments remain the same. However, the manufacturer swaps out your defective vehicle for an equivalent without the same issues.
- Refund: The manufacturer or dealership cancels your lease and refunds you most of your lease payments and any down payment you made, minus a small amount for reasonable depreciation.
- Cash award: In some cases that go to court, you may be offered a cash award instead of a refund. This award is supposed to cover the costs of repairing the vehicle so your lease remains the same.
In all three situations, the manufacturer will usually cover your legal fees.
But what if your claim is denied? If the denial occurs during arbitration, your attorney will advise whether going to court is worthwhile. In many cases, filing a lawsuit is enough to make the manufacturer reconsider its denial.
However, if the court denies it, you can appeal, cancel your lease, or live with the problem until it expires. Luckily, leasing means you will only have the defective vehicle for a little longer. Talking to an experienced attorney can help you avoid making a claim if it is likely to be denied. Get in touch with the expert lemon law attorneys at Johnson & Buxton — The Lemon Law Guys to discuss whether your leased car qualifies for a warranty refund in California.
