So you’ve recently purchased a vehicle and have made the unfortunate determination that it meets the criteria of a lemon. There are probably a lot of things running through your mind about what to do next.
Unfortunately, lemon law claims are rarely an easy process. The end goal is that the manufacturer or dealer meets your rights.
If your vehicle develops a significant defect that compromises the functionality or puts your safety at risk while under the manufacturer or dealer warranty, there are two key benefits you are likely entitled to:
- A replacement of the defective vehicle.
- A buyback of the defective vehicle.
If you are leaning towards option 2, there are several things you need to know about both processes and how they work under California Lemon Law.
❖ Lemon Vehicle Replacement Policy
When it comes to lemon law replacements, it’s important to note that this remedy is optional for both the manufacturer and the consumer. Contrary to a buyback, a lemon law replacement only occurs when both parties agree on the terms. In other words, if you want the manufacturer to replace your lemon vehicle, you cannot force them to do so.
If both parties agree, the manufacturer must replace the defective vehicle with a new, identical one, along with a fresh warranty. Furthermore, the manufacturer must cover all collateral fees associated, which typically include license fees, sales tax, and registration, in addition to all legal fees from filing the case. Many consumers are hesitant to choose a replacement vehicle from the same manufacturer that just sold them a defective one; leading them to choose the buyback option.
❖ Buybacks Under California Lemon Law
Buybacks, on the other hand, require a vastly different procedure.
What is a lemon law buyback?
A lemon law buyback is a vehicle of which the manufacturer has repurchased following the events of a lemon law dispute.
In the event that the manufacturer repurchases the vehicle, they are required to pay you the “buyback amount”.
The buyback amount involves a number of different factors.
The amount the manufacturer provides must include the down payment for the vehicle, the monthly payments you have made, as well as the remainder of the loan. However, the manufacturer may NOT be responsible for any late fees or penalties the consumer may have accrued under the terms of the loan.
Additionally, the manufacturer is responsible for any transportation charges you incurred when you purchased the car. They must also cover any charges for manufacturer-installed items or manufacturer items installed by the authorized dealership. Depending on the defect, the manufacturer may not be required to pay for any non-manufacturer items that were installed in the car by you, a dealership, or any other party.
Finally, the manufacturer must reimburse you for the sales tax, registration fees, licensing fees, and all of the official charges you paid when you originally bought the vehicle.
❖ Usage Fee
Once the total buyback amount has been determined, the manufacturer may be entitled to subtract a usage fee. The usage fee represents the miles of use prior to the first time the vehicle was presented for repair.
To determine this fee, there is a simple formula prescribed by law, based on what the California legislature determined to be the average life of a vehicle (120,000 miles). For instance, let’s say you bought a car for $20,000. You drove it for 2,000 miles before the transmission started to show signs of faultiness. So, we will plug these numbers into the formula:
(Miles Driven) / (Statutory Average Life of Vehicle) x Price You Paid for the Car = Usage Fee
(2,000 miles) / (120,000 miles) x $20,000 = $333.33
If you have had multiple issues with the vehicle, the usage fee may depend on when you brought the car in for the defect that officially rules it a lemon. For example, let’s say you started having issues with the seatbelts after 1,000 miles. You brought the car in, and the manufacturer or authorized dealer fixed it. Now, after driving the car for another 2,000 miles (totaling 3,000 miles), the engine fails. After four failed attempts to fix the problem, the car is officially ruled a lemon. In this case, you may have to use 3,000 miles in the equation.
❖ Getting Coverage for Incidental Damages
In addition to everything associated with the buyback amount, the manufacturer must also pay for any incidental damages. These damages refer to the costs you incurred as a direct result of the lemon vehicle’s defects and repairs. Incidental damages typically include (but are not limited to:
- Towing fees.
- Rental car expenses.
- Repair costs.
- Prepayment penalties.
- Earned finance charges.
- Early termination charges.
In order to get coverage for these incidental damages, it is strongly recommended that you keep track of ALL paperwork, records, and invoices related to the vehicle’s issues and repairs. Furthermore, keep a log of how many total days the car spends in the shop.
❖ Speeding Up the Process
From a consumer’s point of view, getting a lemon law buyback can oftentimes seem like an uphill battle; a steep uphill battle.
Keep in mind, auto manufacturers in California have access to the best legal defense in the state. It’s relatively common that the manufacturer will unnecessarily delay the process of honoring a lemon law buyback. If your car is defective, the issue(s) needs to be resolved as quickly as possible to avoid putting the driver and other people at risk.
If you believe your vehicle is a lemon, you need to seek out a lemon law attorney right away to speed up the process. More importantly, you need an attorney who values consumer justice and fast buybacks more than anything else. Remember, if your car is officially ruled a lemon, the manufacturer is responsible for ALL legal fees.
At Cline APC, our California lemon law legal group has been dealing with the auto industry for years and knows exactly what it takes to get a buyback processed as quickly as possible. Being as how a lemon vehicle is characterized as a defective product, of which is not caused by driver abuse, we firmly stand behind the ideology that the consumer should never be charged any out-of-pocket costs or retainer fees to file a lemon law case. Get started with a free consultation today!