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A used car lemon law is a consumer protection statute that protects the rights of a used car buyer when the car does not operate as promised. Depending on jurisdiction, buyers of used cars may have extensive protections and rights under a used car lemon law, or they may find that their protections are more limited than for those who purchase new cars. As a general rule, used car lemon laws frequently provide car buyers recourse against the dealer of a defective car and often require dealers to repair, replace, or refund the purchase price of a non-functioning, or badly functioning, car.
The term lemon has historically been used to describe articles or goods that are of inferior quality or the act of misrepresenting an item by failing to acknowledge its flaws. Automobile lemon laws were developed to protect the interests of car drivers and buyers, who often make a significant investment in the purchase of their car. Perhaps of even more significant concern is the fact that a malfunctioning car can present significant danger to its driver, its passengers, and others walking or driving in the area where the car is in use. A used car lemon law forces sellers of used cars to stand behind their product and make repairs so as to make the vehicles they sell safe for use.
In the United States, the federal Magnuson–Moss Warranty Act, along with the Federal Trade Commission's Used Car Rule, provide significant protections to buyers of used cars, especially with regard to the content and enforcement of warranties. State lemon laws, on the other hand, can be far more specific in detailing not only the rights of the consumer, but the specific obligations of the car dealer. For example, a state car lemon law may limit the amount of repair attempts a dealer can make before he must replace the car or refund its purchase price. These state lemon laws may also require dealers to provide customer remedies if the car is out of service within a specific number of days out of a set period of time.
Some lemon laws extend beyond new and used cars. These laws may cover the purchase of some mobile homes, trailers, or even wheelchairs. The term lemon law may describe other consumer protection laws that provide purchasers of goods and services with a cooling-off period after signing a contract or making a purchase. These laws may also be similar to a used car lemon law in that they prescribe warranty terms or the necessity of a replacement or refund in cases where a product does not operate as described or is entirely defective.