California’s ‘lemon law’ could get an update that would speed refunds under new deal

Consumer advocates and automakers say they’ve reached an agreement on legislation to streamline and speed up claims under California’s “lemon law,” which entitles buyers of vehicles with serious defects to receive a refund or a new car.

The 1982 law requires the manufacturer of a vehicle sold in California to provide a refund or a replacement when the vehicle cannot be repaired after a “reasonable” number of attempts, usually ranging from two to four depending on the seriousness of the problem. An automaker that refuses to buy or replace a defective vehicle must pay the owner $50 per day in civil penalties.

Disagreements over evidence and backlogs in the state’s courts have made the lemon law slower and less effective, according to Consumer Attorneys of California, a supporter of the new legislation, AB1755 by Assembly Member Ash Kalra, D-San Jose.

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Under the bill, which is being unveiled Wednesday, a manufacturer that receives a notice from a customer about defects that have not been repaired in a reasonable time would have to agree within 30 days to repurchase or replace the vehicle, and to complete the transaction in another 30 days.

The bill would also require customers to file claims under the lemon law within six years of receiving the vehicle, and within one year of the expiration of the vehicle’s warranty. It would set new deadlines for proceedings in court, and would require customers who seek civil penalties to submit their claims to the manufacturer in writing, not a mandate under current law.

Every state has a lemon law that applies to new cars, but California’s law is one of the few that also applies to used cars. In a statement announcing the bill, Kalra said AB1755 would ensure that California’s law “remains the strongest in the nation, by streamlining and expediting the process for consumers to get their money back — or get a new car — when their vehicle has a serious defect the manufacturer can’t fix.”

Sen. Tom Umberg, D-Santa Ana, who co-authored the measure, said it would “get drivers out of the judicial system and back on the road more quickly.”

On the manufacturers’ side, Kia Floyd, vice president of state and local public policy at General Motors, said the new measure is “a proconsumer bill that will help impacted customers get back on the road faster. These common-sense reforms will close the loopholes in California’s ‘lemon law’ that slow down the repurchase process for customers with legitimate claims and that clog up the court system.”