As California approaches the year 2025, the state’s new auto regulations are set to create uncertainty for car buyers, particularly those who may find themselves stuck with a defective vehicle. Starting January 1, individuals purchasing either new or used cars that prove faulty will need to contend with a revamped version of California’s lemon law—a framework that has historically protected consumers against defective automobiles for 50 years.
However, there’s a possibility that state legislators could introduce a bill permitting certain auto manufacturers to bypass these new stipulations. This situation arises from a law signed by Governor Gavin Newsom in late September, which was expedited through the Legislature amid last-minute negotiations with lobbyists. While the Governor emphasized the need to alleviate the strain on California’s court system due to rising lemon law cases, detractors argue that the new legislation diminishes critical consumer protections. Newsom has indicated he only green-lighted the reform after assurances from lawmakers that they would propose additional legislation in the coming year to make the reform optional for automakers.
Legislators have already begun to introduce measures aimed at fulfilling Newsom’s expectations, but the timeline for the approval of these bills remains uncertain. Certain elements of the new lemon law will take effect on January 1, while others will be implemented in April. Confounding the situation further is a ruling from the California Supreme Court—issued just a month after the signing of Assembly Bill 1755—which determined that manufacturers are not obligated to uphold warranties on cars that have been resold as used vehicles. Previously, the lemon law had been interpreted to require manufacturers to either repair or replace defective used cars sold within the timeframe of an original new automobile warranty.
The court stated that should Californians disagree with their interpretation of the lemon law, it is up to lawmakers to draft new legislation addressing the definition of a “new motor vehicle.” Following this ruling, a legislator has voiced intentions to pursue changes as suggested by the justices.
Consumer advocates, like Rosemary Shahan from Consumers for Auto Reliability and Safety, express apprehension regarding the complexities that lie ahead. She pointed out that car buyers may find themselves in a challenging position if they purchase a vehicle that turns out to be a lemon in the ensuing year.
California’s lemon law qualifies a vehicle as a “lemon” if it has substantial warranty defects that the manufacturer fails to rectify, even after multiple attempts. This law applies strictly to disputes regarding the manufacturer’s warranty on new vehicles. In instances where a vehicle’s defect remains unfixed after what is deemed a “reasonable” number of repair attempts, customers have the right to either a replacement or a refund as per the regulations of the California Department of Consumer Affairs. Lemon law disputes can be addressed through arbitration or litigation in court.
The recent legislation was a compromise among U.S. automakers, consumer rights attorneys, and judicial stakeholders as they sought to reduce a burgeoning backlog of lemon law cases, which soared from about 15,000 in California courts in 2022 to over 22,000 the following year. In Los Angeles County, nearly 10% of civil lawsuits are now lemon law cases.
Proponents assert that the changes will expedite the resolution process for consumers seeking a functional vehicle, while establishing new procedural regulations aimed at alleviating the burden on the courts. Conversely, critics—including Shahan—argue that this modification serves predominantly to favor U.S. auto manufacturers, who are the most frequently litigated parties under California’s lemon law, often at the cost of consumer interests. Foreign auto manufacturers largely opposed the legislative measure. The disparity in lemon law cases reveals why U.S. automakers pushed for such reforms, as their complaints outstrip those from foreign manufacturers. If new legislation is adopted as anticipated, it is likely that foreign automakers will continue to adhere to the original lemon law.
Until legislators finalize the pending reforms, buyers facing issues with defective new vehicles will have shortened timeframes to file lawsuits and will receive reduced compensation from rebates. The alterations also limit the usage of lemon law claims to just six years, contrasting with a vehicle’s full warranty duration. Moreover, the Supreme Court’s ruling regarding warranty coverage for used vehicles has left plaintiffs like Mariana Alvarado Rodriguez feeling vulnerable.
Alvarado Rodriguez, a seasonal farmworker from Tulare County, purchased a 2018 GMC Sierra 1500 in 2021. She experienced mechanical troubles almost immediately and alleges they should have been covered under warranty. However, General Motors did not honor her claims. After her lawsuit was dismissed following appellate court rulings that warranties for new cars don’t transfer to used sales, Alvarado Rodriguez found herself without reliable transportation for her job. She expressed frustration over the protracted process that has severely affected her livelihood.
Democratic Senator Tom Umberg, a key figure behind the new lemon law reforms, acknowledges that lawmakers will need to revisit the Supreme Court’s decision affecting warranty claims for used vehicles, as they gather again after the holiday season. He anticipates further discussions to protect consumers from misleading practices.