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The truth about Lemon law arbitration

California Lemon laws are designed to protect consumers from buying or leasing a car that does not work correctly or safely. It is enforceable throughout the warranty period as well as six months after the expiration date.

Often, consumers who buy faulty vehicles will be a part of a class action involving hundreds of vehicles or left to seek compensation on their own. But more and more manufacturers are putting a mandatory arbitration clause in their contracts. Handled by a neutral third party, the supposed benefits of this format are that it is a faster and less expensive way to resolve a dispute. Consumers can sign up for arbitration by visiting the state's Department of Consumer Affairs, but many who arbitrate find that they are stuck with unsatisfactory settlements.

Reasons why arbitration is not the best option

Upon further research, consumers will find some big red flags:

  • No attorney: Arbitration often does not allow for legal representation, but the manufacturer's non-lawyer representatives often are arbitration experts who are coached by the company's lawyers.
  • Cost: Lemon law disputes are always paid (including legal fees, costs and expenses) by the manufacturer if they lose, so there is no cost passed on to the consumer if they litigate.
  • More quickly resolved: Consumers with strong cases and a Lemon law attorney on their side will often see cases quickly settled because manufacturers see no reason to waste time and money if they do not have an excellent chance to win. Moreover, arbitration can be dragged out if there is a good chance that the consumer will win the case.
  • Less chance of winning: Arbitration moves faster, so there is less time for accessing records, documents and other information related to the case. This is important because the burden of proof is on the consumer, who must prove that the vehicle is a lemon.

Not sure who to believe?

Lemon law attorneys here in California understand the laws and how they work. Setting up a free consultation is often the best way to determine how to address the matter.

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