Lemon Law Versus Auto Fraud: What’s the Difference?

Purchasing a faulty vehicle is an excruciating realization. In many cases, the defect won’t present itself immediately.

Before you jump to conclusions or end up spending a bucket of money trying to fix the problem, you need to understand the depth of the issue. This involves the nature of the defect and the current circumstances. It’s possible that you might be a victim of a lemon or auto fraud. If this is the case, you might also be entitled to compensation.

Understanding which category your situation falls under can be tricky, as there is a good deal of overlap.

Let’s discuss the differences.

Auto Fraud

Auto fraud has been around for a VERY long time. Generally speaking, most everyday car buyers are not adept to spotting the technical details and fine print maneuvers that typically lead to auto fraud. Unfortunately, unscrupulous auto dealerships are everywhere and people get ripped off every day.

Some of the key characteristics of auto fraud are:

  • Usually involves used vehicles.
  • Claims of fraud are typically made against an auto dealership.
  • Involves deceitful practices with intention to dupe the buyer.
  • Stems from problems that the dealer misrepresented or purposely concealed.
  • Can involve everything from the vehicle’s paperwork to the parts.

Auto fraud comes in all shapes and sizes. Here are a few of the most common dealership scams:


  1. Odometer Fraud:

This is one of the oldest tricks in the book. In the old days, this involved cranking back miles on the odometer as a way to drive up the price. A common misconception these days is assuming that because most speedometers are digitized, odometer fraud doesn’t happen as much. On the contrary, dealerships can easily use cheap software to get into the vehicle’s system and change the numbers. Or, there are many legal tools out there that can be used to re-calibrate the odometer. To avoid falling victim to this scam, enter the VIN number into CarFax and compare it with the maintenance records to see if the odometer reading matches up. But, be careful, sometimes CarFax isn’t always accurate.

  1. Not Disclosing a Lemon Law Buyback:

This is one of the areas where lemon law and auto fraud overlap. Sometimes, dealerships will purchase lemon vehicles that the manufacturer bought back from the consumer for pennies on the dollar. They will then try to resell this without disclosing it to the consumer. If you buy the vehicle with an express warranty and implied warranty of merchantability, there is a chance you are still covered under California lemon law.

  1. Claiming the Vehicle Was Sold “As Is” Without a Proper Label

Fraudulent auto dealerships will sometimes claim that a used vehicle is being sold “as is,” which means that the buyer accepts the vehicle in whatever shape it is in and there is no implied warranty of merchantability. In some cases, the dealer will try to get you to sign an “as is” agreement. However, if there is no official “as is” label displayed on the vehicle, any written or verbal agreement is may be void as a matter of law. The “as is” label must clearly state:

  • Vehicle is sold “as is” with “all faults.”
  • The performance risk is with the buyer.
  • The buyer takes full responsibility for repairs.


  1. Not Disclosing a Former Rental or Taxi Vehicle

This is another super common form of auto fraud. Buying a former rental car or taxi comes with a stigma that the vehicle has seen serious wear and tear. Dealerships can buy these for cheap at auctions. If they don’t disclose the history, they can sell them to unaware buyers for a big profit. Again, this can be avoided by looking up the VIN number on CarFax.

Lemon Law

The lemon law varies from auto fraud in a number of ways. Most prominently, the difference is the intent. Generally speaking, auto fraud is knowingly committed by dealerships, whereas a lemon is the result of manufacturer error. Perhaps it was due to a glitch in the factory process or an unforeseen abnormality. For the most part, manufacturers do not intend to sell defective vehicles.

Here are some more key traits that define lemon law.

  • Claims are made against the manufacturer or warranty company.
  • Must have a “defect” which impairs the vehicle’s use, value or safety.
  • Vehicles are covered under the manufacturer’s warranty.
  • Involves defects in materials or workmanship.
  • The manufacturer, through its authorized repair facility, was unable to repair the defect within a reasonable number of repair opportunities.

Now, it’s important to realize that the lemon law varies from state-to-state. In many states, the lemon law only applies to new vehicles. However, in California, used vehicles can also be eligible for benefits under lemon law. Being a lemon law attorney in San Diego, a good deal of our cases involve used vehicles.

Proving that your vehicle is a lemon can involve many small details.

In most circumstances, the California lemon law requires at least two repair attempts to fix the defect. For starters, let’s discuss the “defect” element. To reiterate, the defect must impair the use, value or safety. In California, some of the common defects that fall under this category include issues with the:

  • Steering
  • Braking
  • Seat belts
  • Electrical
  • Engine
  • Transmission
  • Airbags
  • Cruise control
  • Air conditioner mold
  • Accelerator/brake pedals
  • Fuel injectors
  • Lamps
  • Frame/body

These are some of the major ones. Additional problems which may also qualify include, but are not limited to things like defective radios, or the CD player skipping, and fit and finish concerns. In addition, if the defect puts you or those around you in danger of an accident, it most definitely qualifies.


The Wrap

One of the most common truths about the lemon law and auto fraud is that you can typically avoid the latter with the proper due diligence. Ending up with a lemon is mostly a matter of bad luck, but sometimes manufacturer fraud.

If you can adequately prove that you were a victim of auto fraud or a lemon (or both) with the respective lawyer, you might be entitled to similar benefits. These would include a buyback, replacement, and coverage of incidental costs. If you believe you are a victim of either, DO NOT WAIT. Get in contact with a specialized lawyer right away, as your window of opportunity might be closing.

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