A lemon-branded title lets consumers know that the vehicle was deemed a lemon and may have persistent problems that are irreparable. Unless the lemon vehicle has been fixed, it could create issues for the new driver. Additionally, the lemon vehicle is going to suffer from a decrease in value due to the branding.
So, how does a lemon title affect insurance? Some insurance companies will not cover a lemon vehicle, while others will charge a higher premium. These problems add to the financial strain felt by the driver.
The Lemon Pros are experts in dealing with the Lemon law and defective vehicles. Because their practice area is focused on lemon vehicles, they’ve been able to secure millions of dollars in compensation for drivers. Contact us today to get a free consultation about your branded title vehicle!
In this comprehensive guide, we define the meaning of branded title cars and show you what the label means for insurance companies. We also provide you with some tips to help you save money and protect yourself from a lemon title.
The branded title vehicle is one that had significant defects and was repurchased by the manufacturer as per California Lemon Law requirements. This vehicle likely suffered from manufacturing defects or mechanical issues that couldn’t be resolved.
For it to become a branded title vehicle, the car would have had to be covered by a warranty. For new vehicles, the defect must occur within 18,000 miles or 18 months of taking ownership. Used cars are only covered during the warranty period provided by the dealership. A Lemon law buyback can occur when there have been four unsuccessful repair attempts for the defect (two with serious safety issues) and the driver proves the car is irreparable.
Once the manufacturer receives the car back, the title must be changed to reflect the lemon status, which causes the fair market value of the vehicle to drop significantly. This title status must be disclosed on future sales.
The California lemon law is comprehensive and provides significant protection for consumers, but that isn’t the case in all states. Some states have less strict guidelines, such as Arkansas and Virginia, so it’s always wise to speak with a qualified lemon law lawyer who understands your local regulations.
Whenever a car ends up with a branded title, whether it’s a lemon title or salvage title, it profoundly affects the type of insurance coverage that’s offered. Because the defects could interfere with the use and safety of the vehicle, insurance companies see it as a higher liability. The provider will perform a risk assessment to determine if comprehensive and collision coverage can be offered. When they can, premiums tend to be significantly higher due to the added risk.
Lemon-titled vehicles come with an inherent risk that alarms insurance companies. The provider may limit the amount of coverage offered and can charge a higher premium. Additionally, the insurance company may deny claims if they are related to the lemon issue. For example, an owner of a 2023 Ford Explorer may pay approximately $2,000 per year for insurance coverage. However, the same car with a lemon title could cost $3,000 or more per year, depending on the driver’s record and the coverage required.
There’s also a significant impact on the car's resale value. If the vehicle’s history indicates trouble with defects, the fair market resale value accordingly drops. Future buyers will likely notice this drop, making it more difficult to sell the car for a reasonable amount of money.
The Lemon Law buyback occurs when the manufacturer reimburses the driver for the purchase or lease of the car, in exchange for the vehicle. When this happens, the title is branded to alert future drivers that the vehicle is a lemon. This situation affects not only the insurance but also the warranty.
From an insurance standpoint, the car becomes a high-risk vehicle, and the owner may have to pay higher premiums. There may also be restrictions on the policy about the claims that can be made. Some insurance providers may refuse to offer specific policies, such as comprehensive or collision coverage.
With the warranty, the Lemon Law buyback may result in losing some coverage. If there’s no more extended warranty protection, the driver faces higher expenses for any significant repairs that are needed. It could also become difficult to purchase an extended warranty with a lemon title due to any possible hidden issues.
If you plan to buy a used car with a lemon title, there are some tips to help you get insurance coverage that protects your investment. Here are a few to consider.
The Lemon Pros have experience working with defective cars, manufacturers, and insurance companies. If you need support during this time, please call for a free consultation.
Owning a lemon-titled car may not be the best choice for everyone. If you’ve explored the financial implications, the limited insurance options, and the resale challenges, you may decide not to drive a lemon vehicle. Here are a couple of alternatives to consider.
Instead of dealing with the limited coverage and the continuous repair bills, you may prefer to sell or trade in the vehicle. Selling the vehicle can help you recoup some of the value and allow you to get into a brand-new car that doesn’t have defects. It may be easier to trade in the vehicle with a dealership that can handle the implications of the lemon title. Private sellers are still responsible for disclosing the information, and this may be something you aren’t equipped to handle.
If you prefer to keep the car, consider an extended warranty for added protection against mechanical issues. While the extended warranty can give you peace of mind and reduce your financial risk, you will need to budget for some upfront costs. Additionally, the plan may not cover all of the issues, and even full coverage may exclude problems related to the lemon case.
Before purchasing a limited warranty, review the relevant federal guidelines to ensure you are fully informed. It’s also beneficial to compare plans and providers to determine which one best suits your needs. If you don’t need coverage for things such as a rental car or roadside assistance, there’s no reason to pay more for these plans. You also want to ensure the plan covers the specific components you are concerned about. Some only cover the powertrain (engine and transmission), while others offer a full bumper-to-bumper warranty.
It’s wise to learn more about the possible risks and ramifications, whether you are wondering what the lemon title classification means on the CARFAX history of a used car, or you own a lemon and are concerned with how the branding may significantly impact the resale value. In California, all lemon cars must be branded, making it more difficult to insure and sell.
For the best advice, you want a qualified lemon lawyer on your side, such as The Lemon Pros. Regularly hailed as the best Lemon law attorneys in the area, we can file a claim, help you with a total loss, and show you how to choose the right path to take. Let us review your matter at no charge with a free case evaluation today.
Lemon cars can raise a lot of questions, especially when it comes to purchases, insurance, or even understanding your rights. So, whether you’re considering buying or you already own one, it’s important to know how a lemon affects your wallet, your warranty, and your coverage. Here are a few quick answers to help you make smarter, more confident decisions.
No, once a car is deemed a lemon in California, it remains on the title to inform future buyers of potential problems. Even if the issues were resolved, the branding would follow the car.
Some insurers may provide access to full coverage policies, but the price is going to be higher than for a vehicle without defects. You should review the coverage to ensure you would receive the full replacement value of the car if it were deemed a total loss.
The value varies based on the car’s condition, mileage, and the severity of the defects. Either way, you can expect to see a significant decrease in value because it’s difficult to determine how much the defects will interfere with the future use of the vehicle. The values are often at a similar point for vehicles with a salvage title.
Buying a car with a lemon title can be risky, especially if the issues were never fully resolved. Before purchasing a vehicle with this kind of history, check the vehicle identification number (VIN) and review its full repair records. While the lower price may seem appealing, long-term costs such as higher insurance premiums and out-of-pocket repairs after the warranty ends can quickly outweigh any savings.
A lemon title affects insurance for the remainder of the car's life. Even after repairs, insurers still factor in the branded history when calculating rates. Because the lemon status stays on the title permanently, premiums often remain higher, and coverage options can be limited. That’s why it's essential to fully understand your rights under laws like the Magnuson-Moss Warranty Act before deciding to purchase a vehicle with this kind of label.
Phone: (855) 725-2446
Email: [email protected]
We have an excellent success record in representing consumers just like you! We are award winning attorneys, but that has not gotten to our heads. We are attorneys who care and give personalized attention to each and every client, our attorneys directly handle your claim.
© Lemon Pros © 2025. All rights reserved.
Powered by GLP Marketing
