New Lemon Law Procedures

Notice to California Vehicle Manufacturers

Assembly Bill (AB) 1755 (Kalra, Chapter 938) was signed into law by Governor Gavin Newsom on September 29, 2024. This bill introduced new procedures related to auto manufacturers in California. Governor Newsom issued a signing message indicating an agreement with the bill’s author to introduce further amendments in the 2025-2026 legislative session.

On April 2, 2025, Governor Newsom signed Senate Bill (SB) 26 (Umberg, Chapter 1), legislation intended to streamline the implementation of AB 1755. One of the key provisions of SB 26 is the mandate that the Arbitration Certification Program within the California Department of Consumer Affairs (DCA) must publish a list of manufacturers who have chosen to be governed under the procedures established by AB 1755. ACP must publish this list by December 15 each year.

California now has three options for manufacturers to resolve lemon law disputes:

  1. Manufacturers can opt-in to the new process and procedures established by SB 26 and AB 1755; or
  2. Manufacturers can resolve claims using existing California Lemon Law statutes; or
  3. Manufacturers can elect to be certified through the Department of Consumer Affairs’ Arbitration Certification Program.

Manufacturers who opt-in to the new process and procedures established by SB 26/AB 1755 would be subject to California Code of Civil Procedure sections 871.20 – 871.30.

Manufacturers that wish to make this election should be aware that it is an irrevocable election for a period of five (5) calendar years following the date of election and they would be subject to comply with following Lemon Law dispute resolution when a consumer chooses to exercise their Lemon Law rights.

  • The manufacturer must place the Lemon Law notice information, including an email and/or mailing address, on the manufacturer’s website, owner’s manual, and warranty booklet, and must provide this information in both English and Spanish.
  • If a consumer demands in writing that the manufacturer repurchase or replace the vehicle at least 30 days before suing, the manufacturer must offer restitution or replacement within 30 days after receiving the consumer’s notice and complete the replacement or restitution within 60 days of receiving the notice. If the manufacturer does not comply with these timelines, the consumer can sell their vehicle and sue the manufacturer.
  • The manufacturer must send an acknowledgement to the consumer that they have received the consumer’s request to repurchase or replace the vehicle.
  • The manufacturer and consumer must resolve pre-litigation disputes regarding attorney’s fees and costs through neutral, binding arbitration.
  • The manufacturer must disclose required information outlined in the Lemon Law during discovery procedures.
  • If the manufacturer and consumer agree to settle the case within 60 days from the date the manufacturer received the Lemon Law notice from the consumer, the manufacturer must follow the payment schedule requirements outlined in the Lemon Law, also known as Song-Beverly Consumer Warranty Act, Cal. Civil Code §§ 1790-1795.7, Tanner Consumer Protection Act, § 1793.22.
  • If the consumer sues the manufacturer, the manufacturer must follow the filing schedule and settlement solution outlined in the Lemon Law.
  • The manufacturer must process the agreed-upon restitution or vehicle replacement within 30 days of the receipt of a signed release from the consumer or consumer’s counsel, or daily penalties will be applied to the manufacturer.
  • The manufacturer must pay the consumer the restitution amount at the time the consumer returns the vehicle.
  • The manufacturer must pay the vehicle payoff amount, attorney’s fees, and relevant civil penalties within one business day of the vehicle return.

Opt In Procedures

Manufacturers can elect to be governed by these procedures regarding its new vehicles sold in 2025 and the previous five years. To make this election, manufacturers can:

  1. Go to the Department of Consumer Affairs’ website https://www.dca.ca.gov/acp/webapplications/apps/sb26/.
  2. Complete the Webform. The manufacturer needs to complete the necessary information on the webform.
  3. Submit the Form. After completing the webform, the manufacturer should click “Complete” to send it to the Department of Consumer Affairs’ Arbitration Certification Program.
  4. Verification. Once the submission is received, staff of the Arbitration Certification Program will contact the manufacturer to verify the election.

Within 2 business days of their election, and upon verification, the manufacturer will be added to the published list of manufacturers on the Department’s website.

Manufacturers that do not elect to utilize the new procedures set forth under AB 1755 and SB 26 to resolve Lemon Law claims on their vehicles, are subject to existing California Lemon Law mandates as outlined in:

Manufacturers that are certified through the Arbitration Certification Program and wish to continue utilizing this process do not need to take any action. Manufacturers that wish to obtain certification, may apply for certification with the Arbitration Certification Program. This process is governed by California Code of Regulations (CCR) Title 16, Professional and Vocational Regulations, Division 33.1 Arbitration Certification Program.

Arbitration is an informal process for consumers and vehicle manufacturers to resolve warranty disputes under the Lemon Law. Many manufacturers participate in an arbitration program that is certified by the Department of Consumer Affairs’ Arbitration Certification Program.

California’s Arbitration Certification Program within the Department of Consumer Affairs is responsible for certifying and overseeing the arbitration programs and the manufacturers they sponsor. The ACP monitors the arbitration process to ensure a fair, reliable, and informal method of resolving disputes.

Benefits of Certification with ACP:

  • Arbitration is an alternative to costly court litigation.
  • It is an expedited process with decisions typically rendered within 40 days of a claim being accepted by a certified program.
  • Arbitration is an informal process in which parties can present their case in person, virtually, in writing, or over the phone.
  • Once the consumer accepts the arbitrator’s decision, the manufacturer then has 30 days to complete performance of that decision (with some exceptions).
  • Disputes settled through arbitration help alleviate the strain on the court system.

Non-Certified Manufacturers that are interested in certification can obtain more information by contacting the ACP at ACP.CertApp@dca.ca.gov.

This information is not intended as legal advice. For any specific or detailed legal questions regarding the Lemon Law, arbitration, or certification processes, please consult with your legal counsel.