When a used car sold with a manufacturer’s warranty keeps breaking down, many Californians wonder what the lemon law is and whether it applies. California’s Song-Beverly Consumer Warranty Act answers yes: if the manufacturer cannot repair defects after a reasonable number of attempts, it must either replace the vehicle or make restitution equal to the purchase price. This blog uses the 1995 case Jensen v. BMW of North America to illustrate how the law works and what remedies are available when a dealer refuses to honor its obligations.
Understanding your rights under the lemon law
The Act requires manufacturers to maintain service facilities and repair vehicles under warranty. If the manufacturer or its representative cannot fix the vehicle after a reasonable number of attempts, it must promptly replace the vehicle or make restitution equal to the actual price paid. Restitution includes taxes, registration fees, and manufacturer-installed options, plus incidental damages; it is reduced only by a mileage offset calculated by dividing pre-repair miles by 120,000. Knowing what the lemon law means, understanding that this remedy is mandatory once the reasonable-attempt threshold is met.
Restitution and replacement are the core remedies, but the law goes further. Civil Code § 1794 allows buyers damaged by a manufacturer’s failure to comply to sue for damages. Willful violations can lead to a civil penalty up to twice the actual damages. The prevailing buyer also recovers attorney’s fees and costs. These provisions give consumers leverage and discourage companies from ignoring legitimate claims. Consumers who believe their vehicle may qualify can review the basics of California lemon law claims to understand how these protections work.
The Act also broadens the definition of a “new motor vehicle.” Section 1793.22 defines it to include not only freshly manufactured cars but also dealer-owned vehicles and demonstrators sold with a manufacturer’s new-car warranty. A low-mileage vehicle sold as a demonstrator may still qualify as new if it carries the original warranty. This clarification matters because lemon-law remedies apply only to new motor vehicles; used cars sold “as-is” without a warranty generally fall outside the statute. However, if a used vehicle is sold with an express manufacturer’s warranty, it is treated as new under the Act.
Legislative background and policy
The Legislature has refined the Act over time to close loopholes identified in cases like Jensen. In 1987, it amended the law to ensure that dealer-owned vehicles and demonstrators sold with a new-car warranty were covered and required manufacturers to disclose and correct defects when reacquired vehicles are resold. Tracing this evolution explains why the court in Jensen treated a low-mileage demonstrator as a new motor vehicle and clarifies what lemon law is for vehicles that are not strictly brand new.
Facts of Jensen v. BMW
Lisa Jensen leased a 1988 BMW 528e with 7,565 miles on the odometer. The salesman told her it had been used as a demonstrator and that she would receive the remainder of the 36,000-mile manufacturer’s warranty. Within weeks, the brakes began to shimmy violently. She returned the car for repairs multiple times over the next two years, but the problem kept returning. When Jensen stopped driving the car and demanded a refund, BMW offered only a trade-assist deal on another vehicle and refused to provide restitution. Jensen sued under the Song-Beverly Act for willful violation of the warranty. Her story illustrates what is lemon law is for consumers who buy or lease demonstrators.
The court’s analysis and outcome
The jury sided with Jensen, awarding her $29,351 in damages and imposing a $58,702 civil penalty against BMW. BMW appealed, arguing that the vehicle did not qualify as a new motor vehicle and that the civil penalty was improper. The Court of Appeal rejected those arguments. It held that the car qualified as a new motor vehicle because dealer-owned vehicles and demonstrators sold with a manufacturer’s new-car warranty fall within the definition. The court reaffirmed that if a manufacturer or its representative cannot repair a new motor vehicle after a reasonable number of attempts, it must either promptly replace the vehicle or promptly make restitution. The civil penalty was upheld because BMW’s refusal to repurchase was willful.
The case underscores two important points. First, vehicles sold as demonstrators with remaining factory warranties are treated as new under the lemon law. Manufacturers cannot avoid their obligations by labeling a vehicle as used. Second, the Act’s remedies are mandatory, not discretionary, when the reasonable-attempt threshold is met.
The court also addressed the limitations period for civil penalties. BMW argued that Jensen’s civil penalty claim was barred by a one-year statute of limitations. The Court of Appeal disagreed, holding that the discretionary civil penalty under section 1794(c) is governed by the four-year limitations period in California Uniform Commercial Code § 2725.
Your rights and remedies when dealing with a lemon
If your vehicle qualifies as a lemon, you may elect replacement or restitution. Replacement requires the manufacturer to provide a new vehicle substantially identical to yours and pay taxes and fees. Restitution returns the price you paid, including collateral charges and incidental damages, minus a mileage deduction. Courts may add a civil penalty up to twice your damages for willful violations, and you can recover attorney’s fees.
To strengthen your claim, document every repair visit. Keep repair orders, receipts, and correspondence. Four unsuccessful repair attempts or 30 days out of service usually establish a reasonable number, though serious safety defects may require fewer attempts. Provide written notice to the manufacturer requesting replacement or restitution, and save copies.
Beware of common misconceptions. A dealer’s “as-is” label does not trump an express warranty or concealment of known defects. Service contracts sold by third parties do not eliminate the manufacturer’s duties. Lemon-law claims are distinct from those under the Consumers Legal Remedies Act (CLRA) or Automobile Sales Finance Act. These issues often overlap with auto dealer fraud cases when misrepresentations occur during the sale.
FAQ: Insurance and accidents
Before tackling specific questions, clients often ask not just what is lemon law is but also how it intersects with insurance and liability.
What happens if someone else is driving my car and gets in an accident?
When your lemon is unusable, you might loan your vehicle to a friend or family member. If that person gets into an accident, your liability insurance generally covers the damages, up to the policy limits.
Is it illegal to drive without insurance in California?
Yes. California Vehicle Code § 16028 requires drivers to show evidence of financial responsibility upon demand by a peace officer.
When to seek legal help
Manufacturers and dealers sometimes resist lemon-law claims. They may argue that a defect is normal wear and tear, blame you for misuse, or insist that a demonstrator is not covered. If your car has persistent defects and the manufacturer refuses to replace or reimburse you, consult an attorney experienced in California consumer law.
Contact Auto Law Firm, PC
At Auto Law Firm, PC, our legal team has extensive experience handling lemon-law and auto-fraud cases. We guide clients through every step: documenting defects, communicating with manufacturers, and litigating for replacement, restitution, and civil penalties.
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