Tag Archives: consumer protection

Bought an auto lemon in California? Most lemon owners have to do more to get a refund.

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CONSUMER ALERT for California auto and recreational vehicle lemon owners!! Don’t get stuck with a defective lemon car because you skipped this step.

Auto and RV manufacturers won major changes to California’s auto lemon law that make it harder for most owners of seriously defective “lemon” vehicles to get warranty repairs or a refund. The changes apply to lemon owners who purchase vehicles from:

General Motors, Ford, Fiat Chrysler / Stellantis (FCA), Hyundai, Infiniti, Isuzu, Kia, Mercedes-Benz, Mitsubishi, Nissan, Subaru, and other manufacturers who opted in to the new, anti-consumer version of the law.

The California Department of Consumer Affairs has posted a list of auto manufacturers who opted in to the new law. If the manufacturer of your car is on the list, your life as a consumer is now more complicated.

Before the changes to the law took effect, all you had to do was to take your faulty car to a manufacturer-authorized repair facility (usually one of their franchised dealerships) for repairs. The manufacturers were responsible for tracking the repairs and offering to “promptly” buy back vehicles that qualified as lemons. That makes sense, since the manufacturers are the ones that produce the defective vehicles.  They also review and approve warranty repairs, including reimbursing their dealers for performing repairs. Plus they have their own attorneys, who should be familiar with the lemon law.

What has changed? 

Now, most lemon owners are required to also notify the manufacturer directly, IN WRITING, in order to have the full protection of the lemon law. You must provide specific information, including:

  • The vehicle owner’s name.
  • The Vehicle Identification Number, or VIN, which must be “accurate.” You can find the VIN on a plate on the dashboard, and in the sales documents. It’s 17 numbers and letters. Take time to double-check that the VIN is correct.
  • A “brief summary of the repair history and problems with the vehicle.” It’s not clear from the new law exactly what will do the job. We suggest that you provide a complete list of all the problems that you have experienced, and of each of the times you attempted to get the vehicle fixed.
  • A demand that the manufacturer buy back the lemon, or provide a replacement vehicle.  It’s not enough to tell the dealer or manufacturer “I don’t want this car anymore,”  “I’m afraid to drive this car,” or “This car is a lemon.” You need to tell the manufacturer IN WRITING that you are demanding a buy back or replacement vehicle.

You must send this written message to one of two places:

By email:  to the email address that the manufacturer of your defective vehicle has provided, which shows up on this list.

By snail mail: “by certified or registered mail, return receipt requested, to the address provided by the manufacturer in the owner’s manual or warranty booklet.” The contact name and mailing address are also posted here, on the website for the California Department of Consumer Affairs.

When you send the written notice, you must still have possession of the vehicle, so don’t wait until you have traded it in to the dealership or sold it to someone else. You are also required to keep the car for at least 30 days from when the manufacturer has received the written notice.*

Plus you must inform the buyer IN WRITING about the problems you experienced with the car — even if it’s the dealer where you’ve been taking the car for repairs.**

Is calling the manufacturer’s toll-free number enough? NO!!

Even if you have called the manufacturer’s customer service number over and over again, and talked to agents of the manufacturer who say they have opened a case in your name, and they will get back to you, that is no longer enough to preserve all of the protections you need, under the lemon law. 

If you don’t send a written notice that complies with the new law, the manufacturer can get away with refusing to fix your lemon or buy it back, without facing the civil penalty for willfully violating the lemon law. The possibility of having to pay a penalty is the #1 incentive for manufacturers to do the right thing when you have a lemon. Unless they face a significant penalty, they have little to lose by failing to fix your car or give you a refund.

Why do auto manufacturers want you to have to write directly to them, before you can benefit from the lemon law?

The reason the manufacturers desired a change in the law to require lemon owners to write to them directly was to make it super easy for them to screen out vehicle owners who haven’t taken that additional new step, and refuse to pay for warranty repairs to fix their cars — reducing their warranty costs. 
 
Auto manufacturers know that most lemon owners will not be aware of the new requirement, or write to them and provide all of the required information, so they can get away with stonewalling and giving consumers the run-around, in hopes they will give up and trade in their defective cars at a huge loss.
 
Not surprisingly, the auto manufacturers who steered the lobbying effort to weaken California’s auto lemon law have the worst record of producing the most lemons, having to issue the most safety recalls, and having the highest warranty costs.
 
General Motors and Ford steered the battle to change the law. In the first half of 2025, Ford had warranty costs of over $2.8 billion and GM had warranty costs of over $2.5 billion.
 
In 2025, Ford broke records for having to issue safety recalls, recalling nearly 13 million vehicles due to serious safety defects — more than the next 9 auto brands combined.
 
How did the auto manufacturers get CA legislators to vote for weakening the lemon law?
 
For decades, CARS succeeded in not only blocking anti-consumer changes to California’s auto lemon law, but in expanding the law to cover vehicles purchased for business use and to include protections for military servicemembers stationed in, or deployed from, California.  
 
However, the Consumer Attorneys of  California (CAOC) sided with GM and Ford over the changes to the law, under threat of a ballot initiative that would have capped their attorneys’ fees — threatening their incomes.
 
The changes to the law were introduced using a sleazy tactic called a “gut-and-amend”  — stripping out the contents of a bill on an unrelated topic, and inserting the unpopular provisions — just two weeks before the end of the legislative session, when the fate of hundreds of bills was being decided all at once.  Many legislators complained about the unfair, rushed process and having to make a decision on such an important issue without the usual months-long scrutiny such a bill should get.
 
CARS worked night and day and fought back hard against the changes, which were also opposed by manufacturers such as Toyota (which produces relatively few lemons compared with GM and Ford), but most legislators caved in to GM, Ford, and the CAOC. Notable exceptions, who sided with consumers: Assemblymembers Rebecca Bauer-Kahan, Dr. Jasmeet Bains, Jacquie Irwin, and Cottie Petrie-Norris, and Senators Marie Alvarado-Gil, Angelique Ashby, Susan Talamantes Eggman, and Roger Niello.
 
Governor Newsom expressed reservations about the bill and insisted that the legislature enact another bill (SB 26) to allow auto manufacturers to opt out, as a condition of signing the bill.
 
 
* Here’s the actual quotation from the GM-Ford-CAOC changes to the lemon law (AB 1755):
 
California Code of Civil Procedure Section 871.24.
 (a) At least 30 days prior to the commencement of an action seeking civil penalties under subdivision (c) of Section 1794 of the Civil Code, the consumer shall do all of the following:
 
(1) Notify the manufacturer of the consumer’s name, the accurate Vehicle Identification Number (”VIN”) of the motor vehicle, and a brief summary of the repair history and problems with the motor vehicle.
 
(2) Demand that the manufacturer repurchase or replace the motor vehicle.
 
(b) Minor deviations in the notice submitted pursuant to subdivision (a) shall not disqualify consumers from seeking civil penalties.
 
(c) At the time that notice submitted pursuant to subdivision (a) is sent, the consumer shall have possession of the motor vehicle.
 
(d) The notice required by subdivision (a) shall be in writing and shall be sent either by email to the email address prominently displayed on the manufacturer’s website for this purpose or by certified or registered mail, return receipt requested, to the address provided by the manufacturer in the owner’s manual or warranty booklet. The notice information on the manufacturer’s website, owner’s manual, and warranty booklet shall be provided in both English and Spanish.
 
** Here’s the actual quotation from the opt-out bill, SB 26, that requires auto lemon owners to inform the buyers IN WRITING about the problems with the vehicle and any legal action they may bring — even if the buyer is the dealer who has been attempting to repair the car, and is already familiar with its history.
 
(i) If a consumer sells their vehicle as authorized by subdivision (g), the consumer may not seek civil penalties under subdivision (c) of Section 1794 of the Civil Code unless the consumer provided to the prospective buyer or recipient of the vehicle, prior to the sale, written notice of the basis for the consumer’s request for restitution or replacement from the manufacturer and of any pending action described in subdivision (a) of Section 871.20.

 

Attacks on consumers mounting, over arbitration

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In an amazingly lopsided editorial, the Albuquerque Journal published this hit piece, slamming the Consumer Financial Protection Bureau for its gutsy work to restore your ability to fight back in court, as a consumer, by joining forces with other consumers who have also been victimized by crooks who engage in illegal practices:

Albuquerque Journal editorial

Here’s the letter to the editor I sent them, in response. However, it won’t be too surprising if it doesn’t appear in print — for reasons you can readily guess:

Funny — this newspaper didn’t object when the car dealers got a special exemption from the Federal Arbitration Act, that allows them to sue anyone they please. Since then, they have sued auto manufacturers, the federal government, their customers, and each other, and somehow you are fine with that, but apparently think their customers do not deserve to have the same access to the courts.

When Congress restored the right to go to court, for car dealers, the National Automobile Dealers Association wrote to members of Congress and promised not to oppose restoring the same rights to car buyers. Then they turned around and killed a bill that would have done exactly that.

If consumers don’t win back our rights through the CFPB’s rulemaking, then it looks like we will have to resort to free market solutions, like not buying another car from a dealer until we have the same legal protections they do.

Here’s the letter the car dealers sent to Members of Congress

And —  in case you haven’t already seen enough hypocrisy in this battle, here’s what Republican Senator Chuck Grassley of Iowa had to say, in favor of the legislation he authored, giving car dealers a special exemption from being forced to arbitrate their claims, in order to purchase a franchise to sell cars:

“While arbitration serves an important function as an efficient alternative to court, some trade-offs must be considered by both parties, such as limited judicial review and less formal procedures regarding discovery and rules of evidence. When mandatory binding arbitration is forced upon a party, for example when it is placed in a boiler-plate agreement, it deprives the weaker party the opportunity to elect another forum. As a proponent of arbitration I believe it is critical to ensure that the selection of arbitration is voluntary and fair…Unequal bargaining power exists in contracts between automobile and truck dealers and their manufacturers. The manufacturer drafts the contract and presents it to dealers with no opportunity to negotiate…The purpose of arbitration is to reduce costly, time-consuming litigation, not to force a party to an adhesion contract to waive access to judicial or administrative forums for the pursuit of rights under State law.”

Senator Grassley also said:

“This legislation will go a long way toward ensuring that parties will not be forced into binding arbitration and thereby lose important statutory rights. I am confident that given its many advantages arbitration will often be elected. But it is essential for public policy reasons and basic fairness that both parties to this type of contract have the freedom to make their own decisions based on the circumstances of the case.”

Couldn’t have said it better myself. So how come he and his colleagues in the House have changed their tune, when it comes to consumers?

Could it be that Sen. Grassley and the Republican Congress rely on campaign contributions from Wall Street crooks who pass on a tidy portion of the $$ they extract from consumers, via the Rip-off TAX? Hmmmmm….

Good news for car buyers — Richard Cordray Confirmed!!

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At last, in a huge, sweet victory for struggling consumers, Richard Cordray has been confirmed as Director of the Consumer Financial Protection Bureau. The CFPB, first envisioned by now-Senator Elizabeth Warren, was created to be a watchdog for consumers in the financial marketplace.

Democratic legislators in Congress created the agency when they voted for the Dodd-Frank Wall Street Reform Act, in the wake of the largest financial meltdown since the great Depression.

Since then, Republicans in Congress have tried repeatedly to weaken the agency and put it under their thumbs. That way, they could tie it in knots and keep it from doing its job.  Republican senators had blocked Cordray’s nomination for years, and relented only when Democratic Senators forced their hand, by threatening to change the filibuster rules that had allowed the Republican minority, at the behest of powerful, unscrupulous special interests, to block a vote on Cordray’s nomination and other nominations to vitally important posts that directly affect the lives of  ordinary Americans.

Cordray’s confirmation is a huge victory for President Obama, US Senator Elizabeth Warren,  the consumer and labor movements and allied groups, and other pro-consumer forces who joined together to form Americans for Financial Reform. And for all the individual consumers who petitioned Congress and spoke up for letting the agency do its job.

Republican members of Congress, and some Democratic members, led by US Rep. Gary Peters of Michigan, granted auto dealers a special exemption from the Consumer Financial Protection Bureau’s authority, under the false claims that they don’t engage in lending themselves (they do), and that they’re not traded on Wall Street (many of them are).

However, the CFPB does have authority to police auto lending. It may also act to curb lenders from taking away consumers’ Constitutional rights when they purchase a car, trapping them with “arbitration” clauses that keep them captive to a secret, private “arbitration” system that the lenders control.

This is welcome news indeed for the car-buying public. The agency has already issued a warning to auto lenders not to keep engaging in discriminatory lending practices that result in minority car buyers paying more for financing — not based on their creditworthiness, but on race.

The agency may also issue rules to curb auto dealer markups on interest rates, that cost car buyers over $25.8 billion annually in excessive interest charges pocketed by dealers and lenders — money that could be spent on technology that saves lives and helps clean the air and slow climate change.

If you have a complaint about auto lending, here’s where to complain at the CFPB:

Consumer Financial Protection Bureau–file a complaint here