by "SteveLehto" (stevelehto)
Published 05/25/2017 at 08:45
by "SteveLehto" (stevelehto)
Published 05/25/2017 at 08:45
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STARS: 5
My podcasts lately have been inspired by phone calls and emails I get at work. And lately, I’ve had more than one person ask me about buying a used “lemon” on purpose. That is, intentionally buying a car that had been bought back by the manufacturer because it was catastrophically defective. Can you guess where I’m going on this?
I’ve written about this before and even done a podcast on it before although that was two years ago. And that is a LONG time in internet years.
My first written piece was a response to a column by Doug DeMuro but this topic comes up more often than you might think. And my advice is always the same. Never buy one of these cars thinking you are getting a good deal.
The car was bought back BECAUSE IT COULDN’T BE FIXED. No amount of tap-dancing or explanationing can undo that sentence.
“Don’t they sometimes buy back non-defective cars just to keep customers happy?”
NO.
If they did that, they’d go out of business.
And I explain it all in this week’s podcast. Here is the audio:
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And the video.
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Top pic: a Tool Check tag from the Tucker Corporation given to me when I spoke recently about Preston Tucker. It is now gracing my key chain.
Follow me on Twitter: @stevelehto
Hear my podcast on iTunes: Lehto’s Law
Steve Lehto has been practicing law for 25 years, almost exclusively in consumer protection and Michigan lemon law. He wrote The Lemon Law Bible and Preston Tucker and His Battle to Build the Car of Tomorrow.
This website may supply general information about the law but it is for informational purposes only. This does not create an attorney-client relationship and is not meant to constitute legal advice, so the good news is we’re not billing you by the hour for reading this. The bad news is that you shouldn’t act upon any of the information without consulting a qualified professional attorney who will, probably, bill you by the hour.
"jimz" (jimz)
05/25/2017 at 09:07, STARS: 2
I think some people try this thinking they’ll get one that was bought back because the dealer simply couldn’t figure out how to fix it (like your old example of the car which got 5 long blocks before they found the contamination causing the failures.) problem is you have no way of knowing what you’re actually getting into.
Apart from structural defects which would require extensive body work I don’t think there is such a thing as an unfixable car. But with so many options out there the potential money saved on the purchase price just isn’t worth the potential hassle and expense.
"Smallbear wants a modern Syclone, local Maple Leafs spammer" (smallbear94)
05/25/2017 at 09:25, STARS: 0
I dunno. Depending on what it was and how cheap you could pick it up, I’d say you could potentially score a cool project car doing this. Just as long as you go in with your eyes wide open...
For example I’d imagine you could probably pick up a reasonably recent model for cheap and refit it with whatever drivetrain you wanted within the price difference.
"SteveLehto" (stevelehto)
05/25/2017 at 09:31, STARS: 2
You cn’t pick them up “cheap.” They sell them for full price, claiming there is nothing wrong with them.
"Smallbear wants a modern Syclone, local Maple Leafs spammer" (smallbear94)
05/25/2017 at 09:36, STARS: 0
In that case... I’m with you. Does the buyback show up in the vehicle history? If it does I can’t understand why someone would buy one.
"SteveLehto" (stevelehto)
05/25/2017 at 09:40, STARS: 2
Not always. Carfax misses them sometimes and often lists them in a misleading way.
"haveacarortwoorthree2" (haveacarortwoorthree2)
05/25/2017 at 10:14, STARS: 1
Calling them a “lemon” is too nice and leads to these problems. If everyone had to refer to these cars like their prior owners did — a #$%*@$^% POS — no one would ever say, “Hmm, should I buy this #$%*@$^% POS?”
"t0ast" (t0ast217)
05/25/2017 at 10:40, STARS: 1
Sound advice by and large, though I was lucky enough to help my fiance take advantage of an exception to the rule not long ago. His ‘13 FR-S was originally lemon’d for the well-known fuel pump noise (in CA, FWIW). I have yet to encounter a Toyobaru that didn’t make the noise or any evidence that it’s a legitimate mechanical issue, so I have no idea how the previous owner got away with it.
Long story short, a MB dealership in central MO had it listed for a competitive price (even compared to private party), was upfront about the title status, and was able to provide the buyback paperwork with specific issue listed at my request. They were apparently eager to get rid of it after having some trouble finding a buyer and/or financial institution that was willing to look past the branded title. The car itself and its title history didn’t reveal any other problems upon closer inspection, so he pulled the trigger and wound up getting it for about $2k less than every comparable listing we could find in a 500 mile radius. Diminished value isn’t much of a concern since he plans on holding on to it for a long time and the car has been problem-free for well over a year now, so I’d call that a pretty successful buy.
All that said, I certainly do recognize that the stars basically aligned for this particular deal. Had things not played out exactly like they did (namely being able to identify a buyback on a non-issue), we would have definitely looked elsewhere.
"benjrblant" (benjblant)
05/25/2017 at 10:42, STARS: 1
Mmmm. Carfax.
“It’s never been wrecked/flooded/salvaged/etc because carfax says its clean!”
Mmmm... yeah. Ok.
Thanks for the share Steve!
"jimz" (jimz)
05/25/2017 at 11:58, STARS: 0
One thing you can do to check it, if you know someone who works at the manufacturer or dealer of that brand car is see if they can look up its history. Usually will show up as a “RAV” or “reacquire vehicle.”
"jimz" (jimz)
05/25/2017 at 12:31, STARS: 1
Btw I take your DCT example of “unfixable.” In my defense I was sitting in the jury pool at the 16th Circuit and couldn’t listen until now.
"SteveLehto" (stevelehto)
05/25/2017 at 13:46, STARS: 0
RAV is the term Ford uses (they have a department called Reacquired Vehicles.) The problem is that 99.9% of these cars are bought back without a judicial determination - that is, they are settled. So the companies are all over the place on what they call them internally. Yeah, it was bought back. But for what?
Now, if you know it was bought back, a better source of info would be to look at the repair history. Get your hands on that and you can figure it out pretty quickly.
"jimz" (jimz)
05/25/2017 at 15:29, STARS: 0
I’ll send you a quick e-mail.
"BaconSandwich is tasty." (baconsandwich)
08/14/2017 at 14:17, STARS: 0
Structural defects you say? :P