Do Car Dealers Have to Offer Warranties?

Under California law, licensed car dealerships are not generally required to offer warranties with the used automobiles that they sell. However, there are two notable exceptions: California law requires that used car dealers offer warranties if either (1) the dealer is a “buy-here-pay-here” dealership, or (2) the vehicle is a “certified” pre-owned vehicle.

Mandatory Warranties Offered by Buy-Here-Pay-Here Dealerships

If a dealer qualifies as a buy-here-pay-here dealership, then under California law it must offer warranties on all vehicles that its sells or leases. So how can you tell if a particular dealer is a buy-here-pay-here dealership? Generally, if you are making your payments to the dealership itself (or a closely-related company), as opposed to a separate bank, credit union, or finance company, then there is a good chance that it is a buy-here-pay-here dealer.

The legal definition of a buy-here-pay-here dealer is any car dealer that: (1) sells or leases automobiles pursuant to installment contracts (i.e., contracts under which a consumer is required to make monthly payments); and (2) assigns less than 90 percent of its sale contracts to unrelated lenders.

Buy-here-pay-here dealer warranties must last for a minimum of 30 days or 1,000 miles (whichever comes first). During the warranty period, the dealer must pay 100 percent of the cost of repairing any of the following parts:

• the engine, including all lubricated parts;
• the transmission;
• the entire braking system;
• the suspensions (front and rear);
• the entire steering system;
• all front and rear wheel drive parts;
• the cooling system for the engine;
• the entire ignition system, including the alternator, generator, and starter (but not including the battery);
• the emissions system, including the catalytic converter;
• the seals and gaskets;
• all seatbelts and airbags;
• the heater; and
• all computers and electrical components that affect the functionality of any covered part.

By requiring that buy-here-pay-here dealers offer these warranties, the California Legislature in Sacramento meant to ensure that consumers who purchase these types of used cars qualify for the protections of California’s used car lemon law.

Mandatory Warranties for Certified Pre-Owned Cars

California law imposes several requirements for dealers who advertise that their used automobiles are “certified” pre-owned or used cars. One of these is that dealers are prohibited from selling certified pre-owned cars on an as-is basis. That means that, at a minimum, certified pre-owned cars must come with at least a thirty-day implied warranty of merchantability.

Want to Talk to an Attorney About Your Used Car?

If you purchased a used car that was sold, or should have been sold, with a warranty and which turned out to be a lemon, you should contact an experienced lemon law attorney to discuss your legal rights. Most attorneys who specialize in the lemon law offer free consultations, so you’ve got nothing to lose.

The Vachon Law Firm offers free consultations in all California lemon law, breach of warranty, and car dealer fraud cases. Feel free to call us at 855-4-LEMON-LAW (855-453-6665) if you have any questions about California’s mandatory warranties or any other lemon law or consumer rights issue.