Is the lender responsible under lemon law as well?
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Under lemon law, if a consumer purchases a car using a financing plan from a lender, and the car turns out to be a lemon vehicle, the lender is not generally held responsible. The responsibility for a lemon car, i.e. a defective vehicle under warranty, falls with the holder of the warranty, which is typically the car manufacturer.
Under lemon law in most states, if you file a case to collect on a vehicle under your local lemon law, you have to continue making payments on the vehicle during the time period while the case is taking place. While lemon laws and their specifics can, and do, vary by state, in the vast majority of locations and situations the case will not affect your payments, at least not during the time when the judgment is pending or the trial is underway. In some situations, a judge may allow you to defer payments until your lemon law claim is settled, but typically this is considered unfair to the lender, who has nothing to do with the manufacturing (and thus defective condition) of the vehicle.
Should you win your lemon law case, keep in mind that you will likely be reimbursed for either the vehicle, or the cost of repairs, by the warranty holder or manufacturer, in which case you'll receive money back for what you paid to the lender in the interim. Of course, the value you receive from the manufacturer is usually the fair market value if they recompense you for the vehicle instead of paying for repairs, which means that the amount you get back could potentially be less than what you owe on the loan. What will happen in this situation depends on the lemon law in your state.
Because there is variation from place to place, you should consult with a consumer or lemon law lawyer in your area to determine what your options are for a successful lemon law claim and to determine how your car loan will be handled under the local lemon laws.