Does the California Lemon Law Apply to Leased Cars?

A lot of people who lease vehicles assume they don’t have lemon law rights because they don’t own the car, but that’s not true! In fact, the California Lemon Law protects both buyers and lessees. Here’s what you should know. 

Key Takeaways: 

• California’s lemon law explicitly covers purchased and leased vehicles. 
• A leased vehicle qualifies as a lemon under the same criteria as a purchased one. 
• If your leased car qualifies, you may be entitled to a refund of your lease payments, down payments, and other related fees, or a replacement vehicle.

Are Leased Cars Covered By the California Lemon Law?

Yes, California’s Song-Beverly Consumer Warranty Act covers both buyers and lessees. Ownership itself doesn’t matter. What’s important is whether you have a manufacturer’s warranty and whether the manufacturer has failed to fix a defect that substantially affects the vehicle.

What Qualifies a Leased Car as a Lemon?

The criteria are the same regardless of whether you own or lease the vehicle. To qualify as a lemon under California law, all three of these generally need to be true:

The Vehicle Is Still Covered By the Manufacturer’s Warranty

The defect must have first appeared while the manufacturer’s original warranty was in effect. Most new vehicles carry a bumper-to-bumper warranty of three years or 36,000 miles, though coverage varies by manufacturer.

The Defect Substantially Affects the Vehicle’s Use, Value, or Safety

A minor annoyance generally won’t meet this standard. The defect must meaningfully impair your ability to use the vehicle, reduce its value, or pose a genuine safety risk.

The Manufacturer Has Had a Reasonable Opportunity to Fix the Problem and Hasn’t

What counts as a reasonable number of attempts depends on the nature of the defect. We’ll get into this more below.

Examples of Leased Vehicle Defects That May Qualify

Defects that commonly form the basis of a lemon law claim for leased vehicles include, but aren’t limited to: 

• Transmission failures or slipping that recur after repair 
• Chronic electrical system malfunctions, including issues with infotainment, power systems, and software-driven features
• Brake system failures or inconsistent brake performance
• Engine problems including misfires, stalling, or oil leaks
• Steering defects that affect vehicle control
• Safety system failures, including airbag or ADAS malfunctions
• Persistent charging failures on electric vehicles

How Many Repair Attempts Are Required?

 California’s lemon law presumes a vehicle qualifies as a lemon in three situations:

• Four or More Repair Attempts for the Same Defect: If the same problem has been in and out of the shop four or more times without being resolved.
• Two or More Repair Attempts for a Serious Defect: If the defect could cause death or serious injury and the manufacturer has tried and failed to fix it at least twice.
• Thirty or More Cumulative Days Out of Service: If the vehicle has been in the shop for a total of 30 or more days during the warranty period, even for different problems. Days don’t need to be consecutive.

Again, these are presumptions, not requirements. Cases with fewer repair attempts can still qualify, depending on the severity of the defect and whether, and when, you informed the manufacturer of the issue.

It’s also important to note that repair attempts need to be made at a manufacturer-authorized dealership to count toward your lemon law claim. Visits to independent mechanics, even for the same issue, generally don’t count. 

Can I Take Legal Action for a Leased Lemon Vehicle?

Yes, lessees have the same right to pursue a lemon law claim as buyers. If the manufacturer won’t resolve the situation voluntarily, you can file a civil lawsuit under the Song-Beverly Act. As with purchased vehicles, the manufacturer is required to pay your attorney’s fees if you prevail, which means there is typically no out-of-pocket cost to pursue a claim.

Under California law, if the manufacturer’s failure to comply was willful, the court can also award a civil penalty of up to two times your actual damages on top of everything else you’re owed. That provision applies to leased vehicles the same way it does to purchased ones. 

What Happens When a Leased Car Is a Lemon?

The manufacturer generally has two options when a leased vehicle qualifies under California’s lemon law.

Lease Termination and Refund

The manufacturer terminates the lease and refunds what you’ve paid, which typically includes your down payment or capitalized cost reduction, monthly lease payments made to date, security deposits, registration fees, sales tax, and incidental costs like towing and rental cars resulting from the defect. That said, the manufacturer is entitled to apply a mileage offset, which is calculated based on the miles driven before the first repair attempt. 

You also don’t owe early termination fees or any remaining lease payments going forward. The lease is unwound.

Replacement Vehicle

Instead of a refund, you can request a comparable replacement vehicle covered by a new manufacturer’s warranty. In that case, the manufacturer is responsible for the new lease or purchase transaction, and you shouldn’t be required to pay additional fees beyond a mileage offset for use of the original vehicle.

Either way, a lemon law attorney can help you evaluate your options and make sure the manufacturer isn’t lowballing the refund calculation.

Reach Out to Our Experienced Lemon Law Firm Today!

If you’re leasing a vehicle in California and it keeps going back to the dealership for the same problem, you may have a valid lemon law claim regardless of the fact that you don’t own the car. Norman Taylor & Associates has been handling California lemon law cases for over 40 years and can help you understand exactly where you stand.

There’s no cost to speak with us. If you have a case, the manufacturer pays our fees. Call 818-244-3905 or 888-817-8822, or contact us online to schedule your free consultation today.