Will My Credit Score Drop if My Car is a Lemon?


If you’ve purchased a new car in recent years, you more than likely expected to have zero problems with it. After all, that’s the main purpose of putting out the money and extending your credit for a brand new vehicle: reliability.

After successfully managing to negotiate with your car dealer, being approved for an auto loan, signing all of the necessary paperwork and starting to make your new monthly payments, it can be a huge downer if your car starts to have issues. The only thing you probably thought you’d have to do for your new car (at first) was taking it in to the shop for regular oil and filter changes.

Naturally, all new vehicles are now covered by warranties that put the onus on the dealership to fix any problems without charging you a fee. In theory, that’s all well and good, and of course does give new car owners some degree of peace of mind.

However, what if your brand new car starts to have a multitude of problems, and your dealership just can’t seem to fix them, even with repeated attempts? As well as being a huge disappointment (you just bought a new car that is potentially less dependable that the old jalopy you were driving), the fact that it seems as though your car literally cannot be repaired can start to make you a little nervous.

Will I Have to Continue Making Payments on a ‘Lemon’?

It can be very upsetting to realize that you are the not-so-proud owner of a ‘lemon.’  You may be worried that you’ll be stuck making payments on a non-functional vehicle. On top of that, if your car is non-functional, will you have to attempt to buy yet another vehicle, leaving you with two car payments??? Lastly, and most importantly, how will all of this affect your credit score?

The good news is that you have the law on your side. Every state now has Lemon Laws in place in order to protect consumers from a vehicle that meet the following criteria:

  • Has problem(s) that began very soon after you purchased it;
  • Its problem(s) were reported to the dealer by you in a timely manner so that it could be attended to under warranty;
  • Even after multiple repair attempts, the vehicle’s problem(s) persisted;
  • Its problem(s) are causing the car to be unusable or unsafe.

If you purchased a vehicle that meets all of the above criteria, it is likely a lemon, which means you will be able to seek recourse using your state’s Lemon Laws. As there will be some negotiations involved, it is advisable to seek out an attorney who is familiar with Lemon Laws to help you. The vast majority of people who inadvertently bought a Lemon are able to recover what is essentially a refund from the dealership. Almost all costs associated with the purchase of the vehicle can usually be won back, with a small fee sometimes charged for mileage put on the car during your ownership.

Your credit score should not drop because you bought a faulty vehicle. However, keep a close eye on your credit report around the time of your Lemon Law case, to ensure that it remains error-free.


 Image credit: Anna Oates


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