The Big Squeeze
Lemons Have Car Buyers Seeing Red

N E W Y O R K, April 26 — How can two car buyers legally get squeezed by the same lemon? It happens more than you might think.
STORY HIGHLIGHTS

Good Morning America's consumer correspondent Greg Hunter says car manufacturers buy back thousands of cars from unsatisfied customers each year.
Of the 45 million used cars sold each year, it is estimated that 75,000 have been repurchased by manufacturers under various state "lemon laws." Some are resold in other states — and it's all legal.

50 Ways to Lose a Lemon

Fifty different statutes in 50 different states confuse and enrage consumers who end up buying a used car that's been officially labeled a lemon in another state.

Scott and Laurel Baker found out about this the hard way. After the couple purchased their used 1997 Kia Sportage from a Pennsylvania car dealer, they began to smell a problem.

"It's almost like the engine is on fire," recalls Scott Baker.

Despite the car's apparent mechanical problems, Baker, a former car salesman himself, didn't suspect that he'd bought a lemon -- until he attempted to refinance it. Baker was speechless when the bank handed him a CarFax report stating his Sportage had been branded a lemon in New York State in 1999.

"It's like one of those things you see on TV," says Baker. "You say this will never happen to me, and it did."

The Pennsylvania dealer bought and sold the Sportage twice after it had been declared a lemon in New York. The first time, Leighton Kia posted a Kia buyback disclosure on the vehicle. The second time it sold the Sportage, it did not.

Pennsylvania laws do not require that dealers disclose lemon information the second time the car is sold. So even though the car was judged a lemon in an adjoining state, the dealer didn't have to tell anyone about it.

Leighton claims the car is no longer a lemon since the problems were repaired.

Message in a Monte Carlo

Connie and Wayne Bagwell thought they got great deal on a low mileage used car. They had no idea the car had a secret past -- and a hidden message inside its trunk.

It turns out that GMA'sGreg Hunter once owned the 1999 Monte Carlo. General Motors had purchased the then-new car back from Hunter after the Florida dealer could not fix its reoccurring problems.

Before he parted ways with the car, Hunter scribbled his name in the trunk so he would recognize the car if he ever decided to try and find out where it ended up.

"I put it in there thinking … 'I'm going to find out what happened to this car,'" recalls Hunter.

The Bagwells knew the car was a manufacturer's buyback, but they never thought it might be a lemon.

In Florida, a manufacturer's buyback can mean that the company bought the car back out of goodwill simply to satisfy an unhappy customer, but it may also mean that the vehicle is legally classified as a lemon.

Wayne Bagwell purchased the Monte Carlo at a general buyback auction. He buys cars for a living and said there was no lemon warning on the car, so he felt comfortable with the purchase.

Now he says General Motors should have alerted him that the car was defective. GM told ABCNEWS that the company did everything required under the Florida lemon law and had fixed the car. But the Bagwells are not satisfied:

"I really wouldn't have bought any car titled a lemon," says Connie Bagwell. "That makes it sound like a bad car. I just wouldn't have bought it."

Buyers Get Burned

Consumer advocates say enough is enough when it comes to state lemon laws. They argue that the hodgepodge of rules and regulations vary from state to state, making it easy for consumers to get burned.

The Bakers' attorney says there should be a national registry for all lemon cars.

"A cradle-to-grave tracking system for lemon cars," says attorney Craig Kimmel. "So that everybody knows, whether they buy it or sell it … that this car is a lemon."

The good news: The American Association of Motor Vehicles recently began the daunting task of setting up a national lemon registry.

The bad news: Only five states have signed up for the registry so far.