Mr. Akerlof's insight came out of his observation that nearly every used-car buyer worries whether he or she is overpaying for a defective vehicle.

Lemon laws primarily serve to force manufacturers to buy back defective vehicles or exchange them.

The state accused the automaker of repurchasing and reselling 119 defective vehicles without informing buyers.

"The department's former chief maintenance officer ignored reports of bus corrosion and kept defective vehicles in service in violation of department safety policies," the report says.

Some states have passed "lemon laws" governing how customers must be compensated for defective vehicles.

These acts empowered the government to establish safety standards for new vehicles and issue recalls for defective vehicles and parts.

He told me that he had recently been sacked from his job as a long-distance lorry driver for refusing to drive a defective and dangerous vehicle.

It is extremely unlikely that a customer will receive a defective vehicle.

There was a lawsuit filed in March 1972 against Honda for knowingly marketing an unsafe and defective vehicle, the AN600.

"When you have a car that has so many safety recalls that it might fall within lemon laws, you have a seriously defective vehicle," he said.