Buying and registering a manufacturer's buyback vehicle

January 9, 2019

Dear Consumer Ed:

I am considering purchasing a car that is marked as a manufacturer’s buyback vehicle. Will I run across any issues registering the car in the state of Georgia? Also is there anything from a legal rights (lemon law) note that I should consider before the purchase?

Consumer Ed says:

Although Georgia’s Lemon Law pertains primarily to new motor vehicles, a portion of the law does cover the requirements for the transfer of a reacquired vehicle.  In Georgia, a manufacturer’s “buyback”, or “reacquired vehicle” is defined as any new vehicle with an alleged nonconformity (defect) that has been replaced or repurchased (bought back) by the manufacturer as the result of a court order, arbitration decision, voluntary settlement entered into between the manufacturer and the consumer, or a voluntary settlement between the new motor vehicle dealer and a consumer in which the manufacturer directly or indirectly participated. 

In Georgia, a manufacturer may sell or lease the previously reacquired vehicle under strict conditions.  First, the manufacturer has an obligation to repair the defect before selling or leasing the vehicle.  Second, a prospective buyer or lessee in Georgia must be provided with a written notice, called the Georgia Lemon Law Notice for Reacquired Vehicles, and given the opportunity to read the form in its entirety before purchasing or leasing the reacquired vehicle.  This Notice must disclose clearly and conspicuously the fact that the vehicle was reacquired by the manufacturer and the nature of the alleged defect(s).  Third, the Notice must be signed and dated by both the prospective buyer or lessee, and the entity selling or leasing the vehicle (which is usually a representative for the motor vehicle dealer).  Fourth, the original Notice must be given to the buyer or lessee at the time of purchase or lease.  And fifth, the manufacturer must provide that buyer or lessee with a non-transferable 12 month/12,000 mile warranty to correct the alleged defect(s).  This warranty starts from the date of the purchase or lease of the reacquired vehicle, and lasts for 12 months or 12,000 miles, whichever occurs first, and cannot be transferred to any other purchaser or lessee.  Following the sale or lease of a reacquired vehicle, the manufacture must notify the Attorney General in writing of the sale or lease, and of the issuance of the warranty.

The Department of Revenue administers the laws governing “title branding” in Georgia.  Specific “title brands” vary from state to state, but generally a branded title (which is noted on the vehicle’s title or registration) is an official designation made by a state agency indicating that the vehicle a) has been written off due to collision, fire, or flood damage, b) has been salvaged (sold for scrap), c) has been reconstructed, or d) is a vehicle for which an insurance company has paid a total loss claim. Georgia only brands titles on salvaged and rebuilt vehicles; it does not automatically brand vehicles reacquired under the Lemon Law.  Remember, however, vehicles coming into Georgia from another state may have been branded in some other fashion under that state’s laws.

A brand on the title of any vehicle, including that of a reacquired vehicle, could impact whether or not that vehicle can be registered in the state of Georgia.  Simply stated, a Georgia reacquired vehicle that has been branded as “salvage” or a non-Georgia reacquired vehicle (a vehicle coming into Georgia) that has been branded as “salvage”, “flood”, “water”, “fire”, “total loss”, “rebuilt”, or “restored” may not be registered unless and until the owner takes additional steps.  The vehicle must pass a Department of Revenue inspection and the owner must have applied for, and have received, both a salvaged title and a rebuilt title from the Georgia Department of Revenue.  These steps can be both time-consuming and expensive to complete.

A consumer should always be vigilant when purchasing a used vehicle.  When considering a reacquired vehicle, be forewarned and remember that the vehicle has been repurchased by the manufacturer due to an allegation of a defect.  Read the provided Georgia Lemon Law Notice for Reacquired Vehicles carefully.  It is important to remember that you cannot undo the purchase if you become unhappy with the vehicle, or if the repairs made under the 12 month/12,000 mile warranty do not address a problem to your satisfaction.  Likewise, any repairs needed after the expiration of the warranty will be your responsibility.  Avoid the potential pitfall of buying a vehicle that you cannot register in Georgia by researching the current title for any title branding before you buy the vehicle.

Submit your own question to Consumer Ed.  Remember…we do not give legal advice. Always consult a lawyer about legal issues.