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Atlanta Criminal Defense Lawyers > Blog > General > The Impact of Georgia’s Lemon Law Claim on Vehicle Financing and Insurance

The Impact of Georgia’s Lemon Law Claim on Vehicle Financing and Insurance

DefectiveProduct

Filing a Lemon Law claim in Georgia can be a critical step toward resolving issues with a defective vehicle. However, while this process is designed to protect consumers, it may have broader implications for your vehicle financing and insurance. Our Atlanta Lemon Law Attorneys at The Spizman Firm will help you navigate the process with confidence and avoid unexpected consequences.

How Lemon Law Claims Affect Vehicle Financing

When purchasing a vehicle, many consumers rely on financing agreements to cover the cost. If the car turns out to be a lemon, the interplay between the financing contract and the Lemon Law process becomes crucial.

1. Ongoing Loan Payments

Even after filing a Lemon Law claim, consumers are typically required to continue making loan payments until the issue is resolved. Failure to do so could negatively impact your credit score and lead to penalties under your financing agreement.

2. Manufacturer Buybacks and Loan Payoffs

If the manufacturer agrees to a buyback under Georgia’s Lemon Law, they are generally required to refund the consumer’s down payment and any payments already made on the loan. However, the loan must still be satisfied, meaning the manufacturer will usually pay off the outstanding balance directly to the lender.

  • Potential Gap in Loan Coverage: If the loan amount exceeds the value of the vehicle (negative equity), consumers may be responsible for paying the difference unless they have gap insurance.

3. Replacement Vehicles

If the manufacturer offers a replacement vehicle instead of a buyback, the financing agreement may need to be adjusted. This could involve transferring the existing loan to the new vehicle or renegotiating terms with the lender.

How Lemon Law Claims Affect Vehicle Insurance

The insurance implications of a Lemon Law claim are often overlooked but are equally important to consider.

1. Insurance Premiums

Filing a Lemon Law claim does not directly increase your insurance premiums. However, if you receive a replacement vehicle or adjust your financing agreement, your premiums may change based on the value and type of the new car.

2. Coverage Adjustments for Replacement Vehicles

If you opt for a replacement vehicle, you must update your insurance policy to reflect the new car. Failing to do so could result in gaps in coverage, leaving you exposed to financial risk.

3. Claims During the Lemon Law Process

If you experience an accident while your Lemon Law claim is pending, your insurance company will likely handle the claim as usual. However, repairs made during this time might complicate the Lemon Law process, as they could alter the manufacturer’s ability to assess the vehicle’s defects.

Navigating Financing and Insurance Challenges

Managing the financial and insurance aspects of a Lemon Law claim can be complex. By understanding your responsibilities and potential outcomes, you can protect your rights and minimize financial disruptions. Always review your financing agreement and insurance policy terms carefully and consult professionals when needed.

How The Spizman Firm Can Help

At The Spizman Firm, we understand the challenges consumers face when dealing with defective vehicles. From navigating Lemon Law claims to addressing their impact on financing and insurance, our experienced attorneys are here to guide you every step of the way. We proudly serve clients across Atlanta, Dunwoody, Alpharetta, Cobb County, Fulton County, Gwinnett County, Johns Creek, and Sandy Springs. Contact us today to schedule a consultation and ensure your rights are fully protected.

Source:

consumer.georgia.gov/resolve-your-dispute/georgia-lemon-law/georgia-lemon-law

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