Last month, an important case, for the first time put manufacturers on the hook for sales of used vehicles with problems beginning outside of the original manufacturer’s warranty, but still within the Certified Pre-Owned warranty. It has been unclear for years whether a manufacturer was required to buy back a used vehicle when the problems occurred after the original warranty expired. As long as the problems still occur during the CPO warranty, they’re subject to the lemon law. On the caveat, if the vehicle wasn’t purchased as a Certified Pre Owned vehicle, the manufacturer is off the hook if the problem occurs for the first time outside of the original warranty. The concern with this case, if any, would be that the Certified Pre-Owned program given by all manufacturers may be canceled since the manufacturers don’t want the added responsibility.
The case involves the sale of a certified preowned Mercedes Benz that still had a portion of the new vehicle warranty remaining and an additional used vehicle warranty from the manufacturer. An un-repairable defect manifested after the expiration of the new vehicle warranty, but during the duration of the used vehicle warranty. Mercedes Benz refused to repurchase the vehicle. The plaintiff sued and a jury found Mercedes Benz liable under the Song Beverly Act for breach of the express warranty and the implied warranty of merchantability. The plaintiff was awarded the same compensatory damages on both causes of action.