California’s lemon law, officially known as the Song-Beverly Consumer Warranty Act, contains an important exemption that affects vehicle fleets. Under California Civil Code § 1793.22, certain vehicle purchases are excluded from lemon law protection. Specifically, the statute exempts vehicles purchased or leased for resale, as well as vehicles that are part of a fleet of five or more vehicles of the same make and model year purchased or leased by the same person or entity within a twelve-month period.
This fleet exemption was enacted to distinguish between consumer purchases and commercial fleet operations. The legislature recognized that fleet buyers—typically businesses managing multiple vehicles—have significantly more bargaining power, resources, and access to legal remedies than individual consumers. Fleet operations also have different service and maintenance infrastructure compared to individual owners. However, understanding this exemption requires nuance. The exemption is narrowly tailored and applies only when specific criteria are met.
The phrase “same person or entity” is critical. It means the vehicles must be owned or leased by the same legal entity. If five vehicles are purchased by different business divisions or subsidiaries with separate legal structures, the fleet exemption may not apply. This distinction can be important for small business owners or partnerships.
The fleet exemption requires all of the following elements: five or more vehicles, of the same make, of the same model year, purchased or leased within a twelve-month period, by the same person or entity. The statutory language is precise, and all elements must be satisfied for the exemption to apply.
First, the threshold is five or more vehicles. Four vehicles do not trigger the exemption, no matter how similar they are. Second, they must be of the “same make”—meaning the same manufacturer (for example, Ford, Toyota, or Chevrolet). Third, they must be of the same “model year.” A 2023 Ford F-150 and a 2024 Ford F-150 are different model years and would not be part of the same fleet under this exemption. Fourth, all vehicles must be purchased or leased within a twelve-month period. If a company buys two vehicles in January 2024 and three more in January 2025, the five vehicles are not all within the same twelve-month window at the time of the later purchases, though careful analysis of timing may apply.
Finally, and importantly, all vehicles must be acquired by “the same person or entity.” In the context of corporate structures, this typically means the same legal entity. If a parent company and its subsidiary purchase vehicles, they are separate entities, and the fleet exemption would not apply to either company individually unless each has separately acquired five or more vehicles of the same make and model year within twelve months.
Many small business owners operate as sole proprietorships or own limited liability companies (LLCs) with a handful of vehicles. If you own a small business and have purchased four vehicles of the same make and model year, the fleet exemption does not apply to you because you have fewer than five vehicles. The lemon law protection remains in effect for any of those vehicles that develop defects within the warranty period.
Even sole proprietors who have purchased five or more vehicles of the same make and model year within twelve months should understand their options. While the Song-Beverly Act’s lemon law protections may not apply, sole proprietors and small business owners are not without remedies. They may pursue breach of warranty claims directly under the Uniform Commercial Code (UCC) or pursue claims under federal law, including the Magnuson-Moss Warranty Act.
The key question for small business owners is whether they can demonstrate that the vehicles were purchased primarily for personal use versus commercial fleet operation. If a vehicle is titled in a business name but is used primarily by the owner or a key employee for personal transportation with incidental business use, it may fall outside the fleet exemption rationale. Consulting with an attorney about your specific situation is important because business structure and usage patterns matter.
A common situation arises when a business owner titles a personal-use vehicle in the company’s name. For example, an owner may register a vehicle to his or her LLC or S-corporation, even though the owner uses that vehicle for personal transportation. Does the fleet exemption apply to such a vehicle?
The answer depends on the facts and circumstances, including how many total vehicles the company owns and whether those vehicles are part of a fleet under the statutory definition. If the company owns only one or two vehicles, the fleet exemption simply does not apply because the threshold of five vehicles is not met. If the company owns five or more vehicles of the same make and model year purchased within twelve months, the exemption may apply to all of them, regardless of personal use.
However, courts and attorneys have recognized that the true purpose of the fleet exemption is to exclude commercial operations that have negotiating power and different needs. Some argue that a small business’s single or dual-use vehicle should not lose lemon law protection simply because title is held in a company name. The best practice is to have such vehicles titled in the owner’s personal name if they are for personal use, or to consult with a lemon law attorney about your specific ownership and usage situation.
It is important to note that even if a vehicle is exempt from the Song-Beverly Act’s lemon law remedies (repurchase or replacement), California law still requires manufacturers to honor their written warranty obligations. Civil Code § 1793.2 establishes the baseline warranty of fitness for purpose, and manufacturers are required to repair defects during the warranty period, regardless of whether a vehicle is part of an exempt fleet.
What the fleet exemption removes is the consumer’s right to demand a repurchase or replacement after a reasonable number of repair attempts. Instead, a fleet vehicle owner must pursue breach of warranty claims through standard litigation or other remedies. This distinction is crucial: the manufacturer’s obligation to repair defects remains, but the streamlined lemon law procedures and remedies do not.
Fleet vehicles are still entitled to free warranty repairs for defects that appear within the warranty period. If a manufacturer refuses to repair a defect or repeatedly fails to fix the same problem, the vehicle owner can pursue a breach of warranty action. The process is more complex and expensive than a lemon law claim, which is why businesses often negotiate extended warranties or service agreements when purchasing fleet vehicles.
The federal Magnuson-Moss Warranty Act provides an alternative remedy for fleet vehicles that are exempt from California’s lemon law. Magnuson-Moss applies to written warranties on consumer products, including automobiles. While the definition of “consumer” under Magnuson-Moss is narrower than under California law, many small business fleet vehicles may still qualify for protection.
Under Magnuson-Moss, if a manufacturer provides a written warranty on a vehicle and breaches that warranty, a consumer may pursue a federal claim. The remedies can include repair, replacement, or refund of the purchase price, plus attorney fees and costs. Magnuson-Moss has a four-year statute of limitations from the date of purchase or lease, which is longer than the Song-Beverly Act’s four-year period measured from the date the defect manifests.
The key difference is that Magnuson-Moss claims require proof of breach of warranty and unreasonable failure to repair, without the automated presumptions that Song-Beverly provides. For example, Magnuson-Moss does not include the “reasonable number of repair attempts” presumption in § 1794 of the California Civil Code. However, for fleet vehicles, Magnuson-Moss may provide an important alternative path to recovery. Small business owners should discuss both Song-Beverly and Magnuson-Moss options with an experienced attorney to determine which provides the best remedy in their particular situation.