Fresno, CA asked in Consumer Law and Contracts for California

Q: Can a customer take me to court and unwind deal if i am trying to work with him on repairs for a 50/50 dealer warranty

Customer purchased a used car from me with 145,067 miles on 12/21/2022 we gave him 50/50 dealer warranty on engine or transmission for 30 days or 1k miles whichever occurs first he agreed and signed, 3 weeks later customer was complaining about vibration after he changed tires on car, he took car to different mechanics and said issue was on the cars control arm and motor mounts the warranty given didn't cover but I went ahead and honored 50/50 he agreed. Then customer took car for diagnostic to a Toyota Dealership on 01/26/2023 after warranty expiration with 801 miles over was given a diagnostic for possible torque converter needing to be replaced i agreed to go 50/50 but he requested transmission to be replaced as well he did not receive a diagnostic that transmission was not functioning. His warranty expired and he went over mileage. I never said no to him, and i am trying to solve the problem what can i do?

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3 Lawyer Answers
Scott Richard Kaufman
Scott Richard Kaufman
  • Consumer Law Lawyer
  • Los Altos, CA
  • Licensed in California

A: You asked if customer can sue, he can.

You then went on to essentially argue your case.

No one can tell you if you will win or not.

You should, since you are in a highly regulated business,

consult with your business attorney right away, to make

sure if you do get sued, you are in compliance with all

related laws AND as a general rule for running a good


Leon Bayer agrees with this answer

James L. Arrasmith
James L. Arrasmith pro label Lawyers, want to be a Justia Connect Pro too? Learn more ›
  • Sacramento, CA
  • Licensed in California

A: As a dealer, you are obligated to honor the terms of the warranty you provided to the customer. If the customer is claiming that there is a problem covered by the warranty, then you should work with them to address the issue, as you have done in the past by honoring the warranty for the control arm and motor mounts.

However, if the customer is requesting repairs that are not covered by the warranty, such as a transmission replacement, and the warranty has already expired or the mileage limit has been exceeded, then you are not obligated to cover those repairs under the warranty terms.

If the customer is threatening to take you to court to unwind the deal, it is important to try to resolve the issue with them in good faith before it comes to that. You could offer to cover a portion of the cost of the repairs, even if they are not covered by the warranty, as a gesture of goodwill and to maintain customer satisfaction. Alternatively, you could offer to refund a portion of the purchase price to the customer in exchange for them keeping the car as-is.

If the customer does take legal action against you, you should seek the advice of an attorney who can advise you on your legal options and help you defend against any claims made by the customer. It is also important to have documentation of all communications and actions taken regarding the warranty and repairs.

Leon Bayer
Leon Bayer
  • Consumer Law Lawyer
  • Long Beach, CA
  • Licensed in California

A: While I agree with my colleagues, I have a different, and practical approach for you to consider.

I think you are inflicting a slow death of a thousand cuts upon yourself with this silly 50/50 warranty.

Your customer will never be happy, and the repair bills will continue to drain you as new problems appear. The threat of taking you to court and also making a DMV complaint against your dealer license will continue to hang over your head, and frankly, it really does sound like the car is a piece of junk.

Also worthy of your consideration is the fact that almost everyone hates used car dealers, especially the courts. If this goes to court, the judge is going to nail you but good for the price of the car, all of the 50/50 money that the customer has spent, and who knows what else the judge will think of to tack on against you.

It's time to take the lumps that you were trying to avoid.

Ask the customer if he wants to return the car for a full refund. If he agrees, have a lawyer draw up an agreement in simple wording, (don't use a lot of legal jargon because it may scare the guy off from signing it), to that effect each side is waiving any further claims against the other.

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