Dealership Sold Me a Bad Used Car — What Can I Do?

If a dealership sold you a bad used car and you bought it as-is or with an expired warranty, then you can't do anything about it. Otherwise, you might still have a chance to get a refund or replacement under the Texas Lemon Law.

First, check if your used car meets these criteria:

• Purchased in Texas

• Certified pre-owned

• Still under the manufacturer's warranty

• Has a serious problem that impairs the car's use, safety, or value

• The problem started while still under warranty

• Was in the shop for a total of 30 days or more

• The manufacturer can't fix the same issue even after 4 attempts

Your next steps: Document the issues with the car and all repair attempts, review the sales contract and warranty, and determine whether legal protections, such as the Texas Lemon Law or other consumer laws, apply.

In many cases, buyers may have the right to demand repairs, get a refund, or pursue legal action. Instead of absorbing the loss, you can hold the dealership accountable.

How to Tell if You Bought a "Bad" Used Car

Certain warning signs can indicate your used car was defective long before you bought it.

Look for the following red flags to help you determine whether the issue is normal wear or something more serious:

• Major mechanical failure: If overheating, engine knocking, transmission slipping, or warning lights appear within days or weeks after purchase, it often points to pre-existing defects.

• Repeated breakdowns: Multiple repair visits (especially if they're for the same issue) suggest the problem was never fixed or disclosed.

• Drivability and electrical issues: Engine stalling, fluid leaks, electrical malfunctions, or burning smells may indicate safety-related or deeper mechanical defects.

• Quick fixes: Temporary or incomplete repair attempts that fail to resolve the issue can be a sign that the dealership is avoiding a more serious underlying problem.

• Inconsistencies in the vehicle's history: Unclear ownership history, missing or gaps in service records, or reluctance of the dealer to discuss prior damage often signal that the car was misrepresented.

Why Used Car Problems are Common

Used car problems are common, and defects typically appear shortly after purchase. Serious issues such as engine failure, transmission defects, or undisclosed damage can quickly turn what you thought was a good purchase into a financial burden.

A lack of transparency between the buyer and the dealership often results in these issues. While natural wear and tear contribute to problems over time, many defects are linked to the car's history or undisclosed defects that aren't obvious at the time of sale.

• Undisclosed prior accidents: Cars that have been in serious accidents or collisions may look fine on the surface. However, the structural damage can lead to long-term problems with the car's alignment, suspension, and overall safety.

• Flood or water damage: Flooded cars can develop electrical failures, mold growth, corrosion, and persistent mechanical issues that may take weeks or even months to surface.

• Odometer inconsistencies or rollback: Inaccurate mileage can hide excessive wear on critical parts like the engine, transmission, and braking system.

• Deferred or poor-quality maintenance: Substandard repairs, skipped oil changes, or the use of low-quality parts can shorten a car's lifespan and lead to premature failures.

• Cosmetic repairs that mask mechanical defects: Don't be fooled by fresh-looking shiny paint, interior detailing, or cleared warning lights. They can temporarily hide serious issues.

Does the Texas Lemon Law Apply to Used Cars?

The Texas Lemon Law often doesn't cover used cars unless the vehicle is still under the original manufacturer's warranty. For coverage, a substantial defect must impair use or safety during the warranty period, and the manufacturer must have failed to fix it after reasonable attempts.

Many used cars are sold "as is" or lack an active manufacturer's warranty, making them fall outside the coverage of the Texas Lemon Law. However, buyers may still have protection under the Texas Deceptive Trade Practices Act (DTPA) if a dealership misrepresents the vehicle's condition, hides known defects, or uses misleading sales tactics.

The Texas Department of Motor Vehicles (TxDMV) manages Lemon Law claims and provides guidance on eligibility and the complaint process. But if it's too overwhelming, you can hire a lawyer to help you determine whether a Lemon Law claim, a DTPA claim, or another legal path is right for your situation.

See Related: What is the Lemon Law in Texas for Used Cars?

What Texas Buyers Can Do About a Bad Used Car

If a dealership sold you a bad used car, you must act promptly and be organized. Taking early steps can affect whether the issue is resolved through repairs, refunds, or legal claims.

• Document all defects and repair attempts: Keep detailed records of mechanical issues, warning lights, repair invoices, and service dates. Written documentation helps establish when the problems began and how often repairs were attempted.

• Review the sales contract and warranty: Examine whether the vehicle was sold "as is," included a dealer warranty, or remained covered under the manufacturer's warranty. These details determine which legal protections may apply.

• Request repairs in writing: Communicate concerns to the dealership in writing and clearly describe the defects. Written requests create a paper trail that may be required for Lemon Law or DTPA claims.

• Explore Lemon Law or DTPA claims: Depending on warranty coverage and the nature of the defect, claims may be available under the Texas Lemon Law or the Deceptive Trade Practices Act.

• File a complaint with the Texas DMV: TxDMV accepts complaints related to deceptive practices and Lemon Law issues. Filing a complaint can prompt further review and preserve important deadlines.

How to File a Lemon Law Claim in Texas

To file a Lemon Law claim in Texas, you must follow this clear, step-by-step process:

1. Allow repair attempts: Give the manufacturer a reasonable number of repairs (typically four attempts or 30 cumulative days out of service) while keeping detailed records.

2. Notify the manufacturer in writing: Send a written notice describing the defect, repair history, and intent to file a Lemon Law claim if unresolved.

3. File a complaint with the Texas DMV: Submit all documentation to the Texas DMV Lemon Law Division to officially start the claim process.

4. Prepare for the Lemon Law hearing: Organize repair records, warranties, purchase agreements, and correspondence to present a clear case.

5. Attend the hearing and await a decision: Present the case in person or via a representative, and the hearing officer will determine whether to give you a refund or replacement.

For a full step-by-step guide, see our detailed article on How To File Lemon Law in Texas.

Note: Texas DMV complaints and Lemon Law claims are administrative (not court lawsuits) at the initial stage.

See Related: How Long Does the Lemon Law Process Take in Texas?

FAQ About What to Do with Bad Used Cars

Q: Can a used car sold "as is" still be a lemon in Texas?

A: If a dealer sold you a car "as-is" in Texas, the state's Lemon Law generally won't apply because the dealer makes no guarantees about its working condition. But if the dealer misrepresented the car's condition or intentionally concealed serious defects, you may have grounds to file a fraud case.

Q: When can I file a Texas Lemon Law claim?

A: To be valid, you must submit the Texas Lemon Law claim either while the vehicle's original warranty is still active or within the first 24 months or 24,000 miles.

Q: What if the dealership refuses to fix my car?

A: Keep a record of all requests, then file a complaint with the Texas DMV or pursue legal action, such as claims under the DTPA or Lemon Law.

Q: Are minor problems covered under the Lemon Law in Texas?

A: No, the defect must substantially impair the vehicle's use, value, or safety to qualify for Lemon Law in Texas.

Q: Can I handle a Lemon Law claim without a lawyer?

A: Yes, but while it's possible to handle the Lemon Law claim yourself, legal assistance is often beneficial for navigating documentation, hearings, and achieving a fair settlement. Plus, it costs $0 upfront, as we explain in our article, "How Much Does a Lemon Lawyer Cost in Texas?".

Get Help From a Lawyer If You Bought a Bad Used Car in Texas

Dealing with a dealership that sold you a bad used car can be overwhelming, especially when all repair attempts fail or disputes arise over warranties.

Consult a lawyer experienced in Texas consumer law who can help clarify your rights under the Texas Lemon Law, assist you in compiling the necessary records, and guide you on the next course of action.

Don't wait until after the deadline for filing the claim. Act promptly to increase your chances of a favorable resolution.