SB26 adds Section 871.24 to the California statutes governing motor vehicle restitution and replacement. It conditions a consumer’s ability to seek civil penalties on giving manufacturers a defined pre-suit opportunity to repurchase or replace a defective vehicle, while setting rules about how that notice is delivered, what information it must contain, and how long a consumer must retain the vehicle during the process.
The change matters to plaintiffs, defense counsel, manufacturers, and compliance teams because it shifts litigation strategy and bargaining power: consumers must follow procedural steps before seeking treble civil penalties under the referenced Civil Code provisions, manufacturers get a structured chance to resolve claims out of court, and fee disputes are routed to neutral arbitration. The bill also creates operational duties for manufacturers around notice channels and bilingual communications.
At a Glance
What It Does
Requires a written prelitigation notice to the vehicle manufacturer with specific identifying and factual information and a demand for repurchase or replacement; gives the manufacturer a limited window to offer and complete restitution that, if met, prevents a consumer from pursuing civil penalties under the referenced Civil Code provisions.
Who It Affects
Consumers asserting lemon-law style restitution or replacement claims, vehicle manufacturers and their legal/claims departments, consumer plaintiffs’ attorneys, and courts that adjudicate these disputes. Manufacturers that sell vehicles in California must maintain notice contact points and bilingual materials.
Why It Matters
It creates a formal cure pathway that will likely reduce civil-penalty litigation when manufacturers comply, but it also imposes pre-suit compliance steps that plaintiffs and their counsel must track precisely to preserve remedies. The requirement for neutral arbitration of fee disputes changes how attorney’s fees are litigated before suit.
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What This Bill Actually Does
SB26 establishes a prelitigation process the consumer must follow before pursuing civil penalties tied to restitution or replacement of a new motor vehicle. The consumer must send a written notice to the manufacturer that identifies the consumer, supplies the vehicle’s VIN, provides a brief repair history and description of problems, and includes a demand that the manufacturer repurchase or replace the vehicle.
The statute expressly tolerates minor deviations in that notice but requires the consumer to have possession of the vehicle at the time the notice is sent.
The bill specifies permitted delivery channels: either an email address the manufacturer prominently lists on its website for that purpose, or certified/registered mail to the address given in the owner’s manual or warranty booklet. Those sources of contact information must be available in English and Spanish.
After the manufacturer receives the notice, it has a limited opportunity to cure: if the manufacturer makes an offer of restitution or replacement and completes the transaction within the statute’s timeline, the consumer cannot maintain a civil-penalty claim tied to that notice. The offer must cover the statutory restitution amount and, when the consumer is represented, reasonable attorney’s fees and costs.The consumer must keep the vehicle in their possession for defined periods during the notice-and-cure window; the statute also lets consumers sell the vehicle if the manufacturer fails to offer relief within the initial period, but that sale carries its own disclosure obligations to prospective buyers if the consumer wants to preserve civil-penalty remedies later.
The bill routes prelitigation disputes about attorney’s fees to neutral, binding arbitration and clarifies that an otherwise isolated disagreement over fees does not automatically render a manufacturer’s offer noncompliant. SB26 also clarifies that an action seeking restitution or replacement may still be filed without following the pre-suit notice rules, but doing so forecloses seeking civil penalties in that action unless the pre-suit notice was given and the manufacturer failed to comply with the cure provisions.
The statute includes a good-faith compliance requirement and an operative date for implementation.
The Five Things You Need to Know
The consumer must give the manufacturer written notice containing the consumer’s name, the accurate VIN, a brief repair history and a demand for repurchase or replacement at least 30 days before seeking civil penalties.
The manufacturer must make an offer of restitution or replacement within 30 days of receiving the notice and complete the replacement or repurchase within 60 days to bar a civil-penalty claim tied to that notice.
Notice must be sent either to a manufacturer email address prominently posted for that purpose or by certified/registered mail to the address in the owner’s manual or warranty booklet; those contact points must be published in English and Spanish.
If the consumer is represented, the manufacturer’s cure offer must include reasonable attorney’s fees and costs; any prelitigation dispute about the amount of fees is resolved by neutral, binding arbitration and a fee dispute alone won’t defeat compliance.
A consumer who sells the vehicle after the manufacturer fails to offer relief within the initial period may still seek remedies, but only if the consumer provided the buyer written notice of the basis for the restitution demand and any pending pre-suit action before the sale.
Section-by-Section Breakdown
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Required pre-suit notice contents and demand
Sets the core prelitigation step: the consumer must, at least 30 days before seeking civil penalties, notify the manufacturer with the consumer’s name, the accurate VIN, and a short summary of repair history and vehicle problems, and must demand repurchase or replacement. The provision tolerates minor deviations, which gives courts some discretion to excuse immaterial errors in notices.
Authorized delivery methods and bilingual contact information
Specifies that the notice must be in writing and sent either by email to the address prominently displayed on the manufacturer’s website for notices, or by certified/registered mail to the address listed in the owner’s manual or warranty booklet. It also requires those manufacturer contact points and materials be provided in English and Spanish, creating an operational duty to maintain accessible, bilingual notice channels.
Manufacturer cure window and blocking civil-penalty claims
Creates a two-step cure rule that, if satisfied, prevents a consumer from pursuing civil penalties tied to that notice: the manufacturer must (A) offer restitution or replacement within 30 days after receiving the notice that meets the statutory restitution amount and includes reasonable attorney’s fees when counsel represents the consumer, and (B) complete the replacement or repurchase within 60 days. The section requires consumers to cooperate in good faith with documentation requests needed to complete the cure.
Attorney’s fees disputes and good-faith requirement
Mandates neutral, binding arbitration for prelitigation disputes about attorney’s fees and clarifies that disagreement over the fee amount alone cannot be the sole reason to find a manufacturer’s cure offer noncompliant. Separately, the statute imposes a general duty that the consumer must act in good faith to comply with the section’s requirements, which could influence judicial assessments of procedural defects.
Retention of the vehicle, sale rules, and disclosures
Prescribes how long a consumer must retain the vehicle during the cure period and the consequences of selling it: if the manufacturer does not offer relief within the initial period, the consumer may sell the vehicle and continue to pursue remedies, but to preserve civil-penalty claims after a sale the consumer must have given the prospective buyer written notice of the basis for the restitution demand and any pending pre-suit action. If the manufacturer offers relief, the consumer must keep the vehicle for the full 60-day completion period.
Relation to filed actions and operative date
Explains that a consumer may commence a restitution or replacement action under Section 871.20 without following the pre-suit notice procedure, but that doing so means the consumer may not seek civil penalties in that action unless the pre-suit notice was given and the manufacturer failed to meet the cure obligations. The section becomes operative on July 1, 2025.
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Explore Justice in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Manufacturers and their claims/legal teams — gain a concrete, statutory cure window to resolve claims and potentially avoid civil-penalty exposure when they timely offer and complete replacement or repurchase.
- Consumers seeking quick remediation — those willing to follow the notice process and keep possession of their vehicle may obtain expedited repurchase or replacement without prolonged litigation.
- Courts and case managers — likely see fewer civil-penalty suits that could be resolved administratively or through the cure process, freeing judicial resources for contested disputes.
- Arbitration providers and neutral arbitrators — see increased referrals because prelitigation fee disputes must go to binding arbitration under the bill.
Who Bears the Cost
- Vehicle manufacturers — face operational and financial costs to maintain bilingual contact points, process notices, make repurchases/replacements within the statutory timeline, and pay reasonable attorney’s fees when a consumer has counsel.
- Consumer plaintiffs’ attorneys — may lose leverage to pursue statutory civil penalties when manufacturers timely cure and will need to participate in prelitigation arbitration over fees, which can complicate fee recovery strategies.
- Consumers who need immediate mobility — incur non‑legal costs if they must retain a defective vehicle during the cure period, potentially disrupting transportation alternatives for those who cannot afford downtime.
- Dealerships and service departments — absorb administrative burdens responding to manufacturer-directed documentation requests and coordinating buybacks or replacements within tight timelines.
Key Issues
The Core Tension
The central tension is between reducing costly litigation by giving manufacturers a clear, time-limited chance to make consumers whole and preserving consumers’ statutory leverage — particularly civil penalties — that incentivizes manufacturers to repair systemic defects; the statute protects efficient cures but risks eroding deterrence and creates new procedural battlegrounds over what counts as a timely, lawful cure.
SB26 tries to thread a narrow needle: it preserves a consumer’s right to demand repurchase or replacement while giving manufacturers a structured escape hatch from civil-penalty exposure if they act promptly. That design raises implementation questions.
The statute requires manufacturers to post an email contact “prominently” and list addresses in manuals, but it does not specify standards for what constitutes adequate website prominence or how consumers prove the manufacturer actually received an email that the manufacturer never answers. Certified mail receipt is straightforward; email receipt and authentication will be a practical evidentiary issue in disputes.
The arbitration requirement for prelitigation fee disputes reduces early-stage court fighting over fees, but it also shifts dispute resolution into a different forum without prescribing arbitrator selection mechanics, fee allocation procedures, or safeguards against low‑quality or biased panels. Likewise, allowing the manufacturer’s cure to bar civil penalties if it offers and completes restitution within the timelines invites gamesmanship: manufacturers could make conditional or partial offers that test the statute’s language about compliance, or they could delay completion while asserting compliance.
The statute’s ‘‘minor deviations’’ and ‘‘good faith’’ language gives courts discretion but also creates uncertainty for both sides about what procedural missteps are fatal. Finally, the bilingual requirement covers English and Spanish only; California’s many other language communities could face practical barriers if translations are absent.
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