Key Takeaways:

• Vehicles with lemon titles often come with higher premiums and limited coverage. 
• In California, these vehicles can depreciate by 15% to 40% compared to similar cars with clean titles.
• Once a lemon title is issued, it stays on the vehicle’s record and cannot be removed, even if repairs are made.

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Buying a car comes with a lot of decisions, and knowing what a lemon title means is an important one. A lemon title basically tells you that the vehicle has had serious problems that affected how safe it is to drive, how well it works, or what it’s worth. But what does that mean for insurance? The short answer: it definitely matters. A lemon title can make a big difference in what you’ll pay and what coverage you can get.

Learn more about lemon titles, how they affect insurance, and what you should keep in mind if you’re considering buying a car with one. 

What Is a Lemon Title?

A lemon title means a car has been labeled as defective because it’s had the same problem repaired multiple times without success. In most cases, the manufacturer ends up buying the car back from the owner under state lemon laws. The term “lemon” is used for vehicles with ongoing issues that seriously affect how safe they are to drive, how well they work, or what they’re worth. 

Every state has its own rules about what qualifies as a lemon. For instance, in California, a car may be considered one if the problem isn’t fixed after a reasonable number of repair attempts or if it’s been in the shop for an extended period of time. 

Is a Lemon Buyback a Clean Title?

No, a lemon buyback doesn’t have a clean title. When a car is bought back by the manufacturer because it was declared a lemon, this gets marked on the title so future buyers know about its history. 

In many states, including California, dealers are required to tell potential buyers if a car has a lemon title, usually with a written notice and a sticker on the vehicle. 

Does a Lemon Title Affect Insurance?

Yes, a lemon title can impact your insurance options and costs.

Higher Premiums

A lemon title can make it harder and more expensive to insure a vehicle. Because these cars have a history of defects, insurance companies may see them as a bigger risk and charge higher premiums. In some cases, insurers might not offer coverage at all, leaving the owner with fewer options.

Warranty Implications

If the car still has a warranty, the coverage might not be as complete as it would be for a vehicle with a clean title. Manufacturers could limit what they’ll cover, especially for the problems that caused the lemon title in the first place. Plus, warranties on lemon-titled vehicles often can’t be transferred to a new owner, which can make things even more complicated when it comes to insurance.

How Much Does a Lemon Title Affect Value in California?

In California, the depreciation of a lemon-titled vehicle can range from 15% to 40% compared to a clean-titled vehicle. 

One reason for this drop is that many buyers are wary of lemon-titled cars because of their history of problems. The more serious or repeated the past issues, the less the vehicle is usually worth. For instance, if a clean 2015 Honda Accord is valued at $20,000, a lemon-titled version of the same vehicle could be worth between $12,000 and $17,000, depending on the severity of its issues and the market’s perception. 

California’s lemon law rules also contribute since they require clear disclosures that make the car’s history hard to hide, and that can drive the price down even more.

Can a Lemon Title Be Removed?

Once a car has a lemon title, it’s permanent. It can’t be removed. This mark stays on the title to make sure future buyers know the vehicle had serious problems in the past. The law requires this to protect consumers so no one ends up buying a problem car without knowing its history. Sellers must also be upfront about the lemon title when they try to sell the vehicle. 

What Are Some Alternatives to Lemon-Titled Vehicles?

If you’re worried about ending up with a lemon title, there are a few good ways to avoid the risk:

Certified Pre-Owned Vehicles

Certified pre-owned cars are a safer bet because they go through detailed inspections and usually come with a warranty. Plus, they’re often backed by the manufacturer, which adds extra confidence in their quality and reliability.

New Vehicles

New cars come with manufacturer warranties that cover most repairs and defects, so the chances of running into major problems are much lower. They also offer the latest safety features and technology, which can make your driving experience even better.

Vehicle History Reports

Before buying any used car, always check the vehicle history report. It will tell you if the car has been marked as a lemon or has any accidents or title issues. You should also have a trusted mechanic look it over to catch any hidden problems before you buy.

In Need of a Lemon Law Attorney? Get in Touch Today

Norman Taylor & Associates specializes in California Lemon Law cases and is committed to protecting your rights as a consumer. We put our clients first and work hard to get the best possible outcome. Plus, we offer free consultations so you can discuss your situation and explore your options without any pressure.

Not sure if your 2020 or newer vehicle qualifies? Call 818-244-3905 or contact our California firm today to learn more! 

Schedule my consultation

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✓ Content checked by the lemon law attorneys at Norman Taylor & Associates