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Paying the Loan in a Lemon Law Case

Law Offices of Kevin Faulk Sept. 4, 2023

If you took a car loan for a vehicle that turned out to be a lemon, you might have many questions regarding your loan obligations. Are you still responsible for paying the loan or do the payments freeze during a lemon law case? And will it impact your credit score if you stop making these payments?  

Our lemon law attorney at the Law Offices of Kevin Faulk has helped people file numerous lemon law claims involving financed cars in Sunnyvale, California, and throughout the state of California. If you think your financed car is a lemon, you might want to consult with our attorney to discuss your loan obligations and ensure that you know how to navigate the complexities of lemon law. Contact our office to schedule a free consultation with an experienced attorney.  

Understanding Lemon Law: The Basics  

California’s lemon law protects consumers who purchase or lease new/used vehicles with a warranty. The lemon law protections also apply if you drive a financed car, though many people who took a car loan often do not understand how filing a lemon law claim affects their loan obligations.  

According to the website of the California Department of Justice, manufacturers are legally required to buy back or replace vehicles if the following criteria are met: 

  1. The manufacturer has had more than a reasonable number attempts to repair the vehicle;  

  1. The problem is covered by the manufacturer’s warranty;  and

  1. The problem was not the result of unreasonable or unauthorized use after the sale.  

If the manufacturer cannot repair a lemon, it must either replace the car or refund the consumer’s money for the defective vehicle.  

Loan Obligations During a Lemon Law Claim 

If your financed car meets the lemon law requirements under California law, you must still continue making the loan payments during the lemon law claim process, which usually takes anywhere from two to six months.  

Contrary to popular belief, your loan obligations do not freeze once you file a lemon law claim. While it may be frustrating that you have to keep making payments for a defective vehicle that you cannot drive, failing to fulfill your loan obligation could result in some unwanted consequences such as: 

  • damaged credit score 

  • repossession of the vehicle 

  • the loss of rights under the Lemon law 

You might need to contact your lender to inform them that you are filing a lemon law claim. Ask them how it could affect your loan obligations and discuss the potential for receiving a replacement vehicle during the lemon law process.  

If your vehicle is deemed a lemon, the manufacturer will be required to either replace the vehicle or provide a buyback. The manufacturer will also be legally required to reimburse you for all reasonable costs incurred when filing a lemon law claim, including your car payments.  

Potential Loan Solutions During a Lemon Law Case 

If you get a refund from the manufacturer after your financed car has been deemed a lemon, you can use the money to pay off the loan. However, if the manufacturer replaces the car, you can simply continue making your loan payments as usual.  

You may also have the option of refinancing your loan, which essentially means getting a new loan with better terms and rates. Refinancing may make sense if: 

  • Rates have decreased; 

  • You want to lower the payment amount; or 

  • Your credit score has improved.  

Other potential loan solutions to consider during a lemon law case include negotiating loan forbearance (stopping or reducing your monthly payments for a certain number of months) and loan restructuring and deferral (changing the terms of the existing loan).  

Seek Legal Counsel to Understand Your Loan Rights 

Contacting an experienced attorney when pursuing a lemon law claim for a financed car could increase your chances of a successful outcome. Your attorney will help you navigate the lemon law claims process and also explain your loan rights. Some of the many ways an attorney can help include: 

  • Explain your loan obligations. Everyone’s situation is unique, which is why you may need legal counsel to understand how filing a lemon law claim may affect your obligation to keep making loan payments every month.  

  • Fight for higher compensation. Your attorney will utilize various strategies to help you receive maximum compensation when pursuing a lemon law claim, which is particularly important when you still have an obligation to pay off the loan.  

  • Represent your best interests. When you hire an attorney well-versed in lemon law, you can be certain that your best interests will be protected at every step of the process.  

  • Achieve faster resolution. While a lemon law case can take anywhere from two to six months, your attorney can help you expedite the process. It would be in your best interests to resolve the case as soon as possible so that you do not have to make unnecessary loan payments if your car is deemed a lemon and you are entitled to a refund.  

Get practical and skilled guidance from our lemon law attorney at the Law Offices of Kevin Faulk and discuss how we can help you with your lemon law case.  

Practical & Purposeful Lemon Law Guidance 

If you think your car is a lemon, it can be confusing to know what steps to take or what your obligations are, especially if you are still making loan payments. Consider contacting the Law Offices of Kevin Faulk to discuss your loan rights and get experienced guidance when filing your lemon law claim. Request a free consultation with our attorney today to get answers to your questions.