What It Means When A Car Is Called A Lemon (And How To Avoid Buying One)

Cars are an investment before they turn into a liability. When you buy a new car, you expect it to function properly for some time without hiccups. But if your recently bought vehicle starts showing pesky issues within the first few weeks of use, then you might have what auto experts like to call a "lemon."

A lemon refers to a recently bought vehicle that quickly turns into a source of frustration due to persistent defects or mechanical problems that significantly affect its safety, value, or functionality. In some states, the term only covers defective brand-new cars; in others, it includes used cars. The term, coined by economist George A. Akerlof, stresses that a vehicle has lost its utility and worth because of its defects and problems.

Lemon cars are deemed unreliable and unsafe to drive because they tend to remain dodgy despite multiple repair attempts. Their issues are typically rooted in manufacturing errors, faulty parts, or poor quality control during production. In many cases, owners of such crummy cars may frequent the dealership or mechanic for repairs, but the problems persist.

Common issues affecting lemon cars include engine failures, transmission issues, and electrical malfunctions — problems that are hard to discern for first-time car buyers. However, there are ways to tell if a new or used vehicle is a lemon, and knowing them can help buyers make informed decisions before making a purchase.

To save yourself from purchasing a lemon car, you need to do your due diligence. Whether you are planning to buy a used car or a new one, you should take the following measures to lower the risk of ending up with a defective unit.

The first is to conduct thorough research on the make and model you are considering. Read customer reviews, check for any recall history, and search for reported issues associated with the vehicle. The National Highway Traffic Safety Administration (NHTSA) and Consumer Reports are credible sources of information about various vehicles.

Another way to avoid a lemon is to retrieve a vehicle history report from services like AutoCheck and Carfax. The reports can be very detailed and reveal all past accidents, repair records, system issues, and any lingering problems. You may also want an independent mechanic to conduct a pre-purchase inspection to uncover defects that the dealer or seller might be hiding from you.

Lastly, don't forget to test drive the car. Having a first-hand feel of how it performs can be an eye-opener. While test-driving, check for warning signs such as unusual cabin noises, flickering dashboard warning lights, or handling issues. Pay close attention to how the car responds when accelerating or braking. If anything feels off, there's a big chance that the car is a lemon.

Since purchasing a lemon car can become a big financial burden to buyers, state governments have provided consumers with protection through lemon laws. Such laws ensure that buyers receive fair compensation or replacements after unknowingly obtaining a defective vehicle from a dealership or seller.

Though lemon laws vary by state, generally speaking, they apply to new cars with significant defects and systemic issues. Only a few states, including California, New York, and Texas, have lemon laws for used cars. Meanwhile, all of the states uphold lemon laws for leased vehicles, save for Nevada and New Mexico, according to Kelley Blue Book.

Most lemon laws per state require that the manufacturer or dealer be given multiple opportunities to fix any issues with new or leased cars. If the problem remains unresolved after a certain number of attempts within a given period, the car may qualify as a lemon. In such cases, the buyers are entitled to a refund, a replacement vehicle, or financial compensation.

For used car buyers, protections vary widely. In states where used cars are not covered by lemon laws, consumers may seek alternative protections through warranties. If you suspect you have purchased a used lemon, it's imperative to document all repair attempts and relay them to the manufacturer. You may also seek legal advice to know if you can pursue legal action against the seller.