Wondering if your company car is covered by the California lemon law? Wondering if the truck that you store your business tools and supplies in can be deemed a lemon? The California lemon law generally only applies to goods that are “bought or leased for use primarily for personal, family, or household purposes.” However, there is a limited exception to this rule for some business automobiles.
The California lemon law statute imposes two requirements for determining whether or not a business automobile qualifies for coverage. First, the automobile must have a gross vehicle weight of less than 10,000 pounds. Second, the company (be it a corporation, sole proprietorship, partnership, or LLC) to which the automobile is registered must have 5 or fewer vehicles registered to it in California. If an automobile satisfies both of these rules, then it qualifies for coverage under the lemon law even if it is used primarily for business or commercial purposes.
One important thing to notice about the lemon law’s weight rule for business vehicles is that 10,000 pounds is the limit for the automobile’s Gross Vehicle Weight (or GVW). If you look at the advertising for your automobile or talk to the selling dealership, you will notice that when people talk about a vehicle’s weight, they often talk about its Gross Vehicle Weight Rating (or GVWR). Many people focus on a vehicle’s GVWR because that is the amount that it is designed to weigh when it is fully loaded with the maximum amount of passengers and/or cargo. The GVWR is always higher than the GVW because it is the weight of a fully-loaded vehicle; however, when determining whether or not it satisfies the California lemon law’s weight limit, you need only consider whether the GVW is less than 10,000 pounds.
It is also important to remember that the lemon law’s 5-vehicle limit for business vehicles only counts automobiles that are registered to the business in California. Automobiles owned by the business, but registered in other states, do not count toward the 5-vehicle limit.