Texas License Plate Lookup /Lemon Law for Used Cars

What Is the Lemon Law in Texas for Used Cars

Texas's Motor Vehicle Warranty Law, commonly known as the Lemon Law, is codified in Section 2301.601 of the Texas Occupations Code. This law addresses defective vehicles purchased from manufacturers and dealers, primarily applying to new vehicles excluding repossessed vehicles, boats, or farm equipment. Used vehicles may receive limited coverage under current state laws related to warranty performance when they remain under the manufacturer's original warranty.

Texas's lemon law provides protection when a vehicle has a substantial manufacturing defect covered by a manufacturer's written warranty, and the owner reports the defect to the dealer or manufacturer within the warranty term. A vehicle qualifies if the same defect has been brought in for repair four times within the first 24 months or 24,000 miles and remains unrepaired, or if the vehicle is out of service for repairs totaling 30 or more days during the first 24 months or 24,000 miles, or if the defect creates a serious safety hazard and has been presented for repair twice without resolution.

What Protections Do Used Car Buyers Have in Texas?

Although Texas's lemon law provides limited used car coverage, federal statutes and state consumer protection laws establish important safeguards for used vehicle transactions.

Magnuson-Moss Warranty Act

The Magnuson-Moss Warranty Act establishes federal protection when dealers or manufacturers issue written warranties on motor vehicles, including used cars. This federal statute:

Permits consumers to pursue legal action for breaches of express warranties issued by dealers or manufacturers
Allows claims for violations of implied warranty obligations
Enables recovery of damages when a dealer or manufacturer fails to honor the terms of a written warranty
Provides remedies when implied warranty protections established under federal law are violated
Protects consumers provided the vehicle carries a written warranty

FTC Used Car Rule Requirements

The Federal Trade Commission's Used Car Rule mandates that dealers display a Buyer's Guide on every used vehicle before sale. This disclosure document must:

Clearly indicate whether the vehicle carries warranty coverage or is offered without protection
Specify which systems or components receive warranty coverage
State the duration of any warranty
Identify the percentage of repair costs the dealer assumes
Provide information about vehicle history records and safety recalls

Under Texas law, dealers must clearly display this information on a side window of each used car to ensure consumers understand their warranty status before completing a purchase.

Texas Deceptive Trade Practices Act

The Texas Deceptive Trade Practices Act, codified in Chapter 17 of the Texas Business and Commerce Code, prohibits sellers from using false, misleading, or deceptive acts or practices when conducting business. This statute protects used car buyers when dealers make misrepresentations about vehicle condition or fail to disclose known defects. If a seller failed to disclose a major issue or lied about the car's condition, the buyer may be able to file a lawsuit under the Deceptive Trade Practices Act.

Understanding "As Is" Sales in Texas

Texas law permits dealers to sell used vehicles "as is," eliminating express warranty coverage. Most used cars in Texas are sold in "as is" condition, meaning the dealer takes no responsibility for the vehicle's condition after delivery. However, the application of "as is" language in Texas does not eliminate all warranty protections and does not shield dealers who engage in fraudulent conduct.

What "As Is" Means for Buyers

When purchasing a vehicle "as is," you accept significant limitations on your recourse and protections:

The dealer assumes no liability for any repairs needed following the sale
You accept complete financial responsibility for all mechanical failures discovered after purchase
You accept complete financial responsibility for all electrical failures discovered after purchase
You accept complete financial responsibility for all structural failures discovered after purchase
Problems identified immediately after delivery remain entirely your expense
You have no recourse to the dealer for warranty coverage on any defects
The "as is" designation typically disclaims all express warranties provided by the dealer

However, "as is" sales do not eliminate all consumer protections or dealer obligations:

An "as is" sale does not eliminate the dealer's obligation to disclose known defects
An "as is" sale does not eliminate the dealer's obligation to engage in honest dealings
A dealer cannot conceal major defects simply by selling a vehicle "as is"
A dealer cannot misrepresent vehicle history simply by selling a vehicle "as is"
A dealer cannot engage in fraudulent conduct simply by selling a vehicle "as is"
Dealers remain subject to state and federal consumer protection laws regardless of "as is" designation
Buyers may pursue legal remedies if dealers engage in deception or fail to disclose known issues

Limited Dealer Disclosure Requirements

Texas dealers must comply with Federal Trade Commission standards and display the Buyer's Guide on all used vehicles offered for sale. The guide must clearly identify whether the vehicle is offered "as is" or with dealer warranty coverage. Dealers must provide written documentation regarding any promised warranties or repair guarantees before transaction completion. If a dealer offers a warranty, it must be clearly written in the Buyer's Guide displayed on the vehicle. All used car dealers are required by federal law to tell buyers whether a used car is being sold with or without a warranty. Dealers must clearly display this information on a side window of each used car.

Limited Exceptions to "As Is" Protection

Despite an "as is" designation, legal remedies may exist in Texas when dealers engage in prohibited conduct:

Fraudulent Conduct and Misrepresentation:

The dealer engaged in fraudulent conduct by intentionally concealing known defects
The dealer made false statements about the vehicle's mechanical condition
The dealer made false statements about the vehicle's history
The dealer failed to disclose a major issue that should have been revealed
The seller misrepresented the overall condition of the vehicle
The dealer made oral or written promises about repairs that were not honored

Concealment of Evidence:

The dealer intentionally concealed evidence of defects from buyers
The dealer cleared diagnostic codes to hide mechanical problems
The dealer tampered with the odometer or mileage records
The dealer removed or obscured visible damage to conceal defects
The dealer erased service records documenting prior repairs

Legal Protections Despite "As Is" Status:

An "as is" designation does not protect dealers from liability for fraudulent practices
An "as is" designation does not protect dealers from liability for deceptive practices
Buyers may pursue legal action under the Texas Deceptive Trade Practices Act when dealers engage in deception
Selling a vehicle "as is" only means the dealer is not promising to repair defects discovered after sale
Dealers remain subject to state and federal consumer protection laws regardless of "as is" language
Buyers retain the right to sue for damages caused by dealer deception or fraud
Courts may impose penalties against dealers who use "as is" clauses to shield fraudulent conduct

Filing a Consumer Complaint

Texas consumers experiencing disputes with used car dealers may submit complaints to state regulatory agencies responsible for consumer protection and motor vehicle matters.

Texas Attorney General
Consumer Protection Division
P.O. Box 12548, Austin, TX 78711-2548
Phone: (800) 621-0508
Official Website: Consumer Protection Division

Texas Department of Motor Vehicles
Enforcement Division – Lemon Law Section
P.O. Box 2063, Austin, TX 78768-2063
Phone: (512) 465-3000
Toll-free: (888) 368-4689
Official Website: Texas Department of Motor Vehicles