Question:How much should we be asking for a car to be discounted that was reported as a lemon buy-back?

August 20, 2005

Greetings,

My wife and I were wondering if you could give us a little advice about purchasing a California vehicle that has a lemon buy-back title.

We ran a CARFAX Record Check on the car and found the vehicle had three owners, and that the car was bought back by the factory from the original owner even though the "lemon" status was not designated on the title.

In the car were the records of the problems reported and records of the repairs. The lemon buy-back was honored for the rear window wiper going on without reason and the rear trunk release not working. A bad ground was found and the wiper relays were replaced.

We drove the vehicle and checked over all the items reported in the list of things fixed. Everything appears to be working fine with no problems.

We do like this car, but when we found out it was a lemon buy-back we told them the price was now too high. We have done a lot of reading about lemon buy-backs, but not much is said for people that are looking to purchase a lemon buy-back vehicle.

Our question is this... how much should we be asking for the car to be discounted since it was reported as a lemon buy-back?

Thanks for any help!

Kind Regards,

John and Greta

Answer:

Hi John and Greta,

It has been my experience that most "lemon buy-backs" have nothing more than minor problems that are easily repaired. What usually happens is that someone buys a new vehicle and a few glitches pop up. It starts eating at them and they become so fixated on the problems that every little noise or blemish that crops up on the car becomes enormous to them.

The manufacturers try to accommodate buyers who find themselves in this situation, not so much due to state mandated laws, but simply to satisfy the customer. Once the manufacturer buys a car back they send it to a regional dealer auction along with lease returns, factory demos, rentals, etc. Dealers come from surrounding states and buy the cars for inventory for their lots.

At the time of the sale the manufacturer has to disclose the fact that the car is a buy-back. Nevertheless, the car could be purchased by a dealer from a state that doesn't require disclosure on the title.

As far as this particular car is concerned, it sounds like the problems were minor. Unless of course, there is something else lurking that you don't know about. You need to be very cautious and have the car inspected by a trusted independent mechanic to be sure of what you're getting.

It's hard to say what you can ask for in the way a discount. The dealer is going to have a certain amount of money invested in the car, and he is going to want a fair profit. Most dealers try to get anywhere from $1,500 to $3,000 gross profit on a late model used car. Sometimes a lot more.

I was talking to a salesman friend of mine last week and he told me he made $5,000 profit on a used truck he sold! Of course, you have no way of knowing for sure what the dealer paid for the car.

If I were you I would make a ridiculously low offer to the dealer, reminding him of the "lemon" status of the car. Let him come back at you with a counter offer which will be much more realistic - at least from his perspective.

Go back and forth until you can't get him to budge anymore. At that point he may be convinced to let the car go for close to his cost just to get the car out of his hair.

The bottom line is that you have to be comfortable with the price and the car, or else you'll be miserable and regret having ever bought it.

If you're not going to be totally comfortable with this car move on. There are plenty of good used cars out there. I'm sure if you look around you'll find something even nicer.

All my very best...

Tony Iorio