Lemon

Written By
Paul Tracy
Updated June 17, 2021

What is a Lemon?

A lemon is an item whose defects were not outwardly apparent at the time that it was sold to a consumer.  ”Lemon” has typically referred to a defective new car but its current application has become more widespread.

How Does a Lemon Work?

What constitutes a lemon?  Using the example of a car, any new vehicle that has a substantial and/or continuous problem that isn't fixed within a reasonable number of attempts, or that has had a certain number of days out of service or in repair. The legal definition according to many state statutes is as follows: 1) a new car can not be fixed for a substantial defect within four attempts; or 2) a safety defect can not be fixed within two attempts; or 3) the car is out of service for 30 days within the first 12,000 miles and/or the first 12 or 24 months of purchase., Under these conditions, the consumer may be entitled to a remedy from the manufacturer of either cash or a replacement car.
 
Federal and state laws to protect the consumer have been passed in response to the alleged proliferation of defective cars. The consumer is protected by three types of laws: The Magnuson-Moss Warranty Act, The Uniform Commercial Code, and various state laws.

Why Does a Lemon Matter?

The consumer is armed with legislation to support his efforts to secure either a refund or replacement for his defective purchase. Aware of these rights, he can confidently assert his position when faced with a new vehicle (or other product) that is consistently needing repair.

Activate your free account to unlock our most valuable savings and money-making tips
  • 100% FREE
  • Exclusive money-making tips before we post them to the live site
  • Weekly insights and analysis from our financial experts
  • Free Report - 25 Ways to Save Hundreds on Your Monthly Expenses
  • Free Report - Eliminate Credit Card Debt with these 10 Simple Tricks
Ask an Expert
All of our content is verified for accuracy by Paul Tracy and our team of certified financial experts. We pride ourselves on quality, research, and transparency, and we value your feedback. Below you'll find answers to some of the most common reader questions about Lemon.
Be the first to ask a question

If you have a question about Lemon, then please ask Paul.

Ask a question

Paul has been a respected figure in the financial markets for more than two decades. Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 3 million monthly readers.

If you have a question about Lemon, then please ask Paul.

Ask a question Read more from Paul
Paul Tracy - profile
Ask an Expert about Lemon

By submitting this form you agree with our Privacy Policy

Don't Know a Financial Term?
Search our library of 4,000+ terms