A lemon law buyback is essentially a refund that a manufacturer must provide if a vehicle they sold is defective.
Lemon law varies from state-to-state. Some states like Illinois, Colorado, and North Dakota, unfortunately, have very little legislation in place to protect consumers – and it can be quite difficult for them to win their lemon case.
California, thankfully, is an exception and is considered to be one of the best states for consumers’ rights with respect to the lemon law. California’s requirements to deem a vehicle a lemon are fairly straightforward:
- The vehicle must present a “substantial” defect(s) while it is still under the manufacturer or dealer warranty. These must be significant issues that impair the use, value, or safety, including, but not limited to issues like the brakes, engine, or transmission.
- The vehicle must undergo at least two repair attempts or be out of service for at least thirty days due to repairs or one visit if the manufacturer refuses repair.
- The defect must not be a result of driver abuse.
The vehicle must be taken for repairs to a manufacturer-authorized repair facility if you are able to prove that your vehicle meets the right qualifications, you can file a lemon law claim against the manufacturer and seek a refund, aka buyback.
Let’s discuss the process.
Buybacks Versus Replacements
In the state of California, you can choose to either have the manufacturer buy the vehicle back or provide a replacement.
However, a replacement can only occur when both parties agree to the terms – a buyback is required. The replacement vehicle must be identical to the vehicle that was purchased or of equal value. So, if you don’t want to take your chances with the same vehicle again or the same color, finish, or style is not available, you should consider opting for a buyback.
The Buyback Amount
A buyback means that you will receive a refund of any amounts that were originally paid or still payable. This includes the down payment made for the vehicle at the dealership, as well as any monthly car payments made and the remainder of the loan amount for the vehicle. Additionally, the buyback amount would include all official costs related to the vehicle – like sales tax and registration fees.
Now, this is obviously great – as it means that you will not lose any money on the purchase price of your vehicle. However, if you have purchased additional non-manufacturer items (such as a new audio system or decorative rims), you will not be reimbursed for these items.
It is also important to note that this does not include any late fees or other penalties that may have occurred if you have missed a payment in the past.
There are a few things to be aware of when it comes to lemon law buybacks.
First, you want to avoid negative equity.
This can occur if you owe money with a car loan for a previous vehicle. For example, say that you traded in your car for a new one that ended up being a lemon. Even though you still owed $3,000 on the old vehicle, it was transferred onto your new car loan. But once the manufacturer buys back the lemon and pays for it, you will still owe the $3,000 – and have no vehicle.
Secondly, beware of aggressive mileage offset deductions.
Manufacturers are allowed to deduct some costs based on the number of miles put on the car before any mechanical defects started to occur. Some manufacturers will try to skew the numbers in its favor. You will want to have a good California lemon law attorney look over the math and be sure that this amount is calculated correctly and fairly.
What Exactly is the Mileage Offset?
To get more detailed on the mileage offset, the total buyback amount is determined through a legal formula and the manufacturer is entitled to subtract a usage fee. So, although you may have spent $20,000 on your vehicle which ended up being a lemon, you may not automatically receive a check for $20,000.
The formula to determine this fee is:
(Miles Driven) / (Statutory Average Life of the Vehicle) X Price of the Vehicle = Usage Fee
Let’s say that your $20,000 car was driven for 10,000 miles before the mechanical issues occurred. California deems the average life of a vehicle is estimated to be 120,000 miles. Your usage fee would be calculated as:
(10,000 miles) / (120,000 miles) X $20,000 = $1,666.67
This would be deducted from the buyback amount.
How to Charge for Incidental Damages
There might be additional incidentals stemming from the lemon that can be added onto the buyback amount, including:
- Towing fees
- Rental car expenses
- Hotel stays
- Cab fares
In order to receive reimbursements for these incidentals, you must have receipts and invoices for all charges related to your vehicle’s repairs. For instance, if your car needed to be towed and you were charged for this, you must also have a repair report proving that this was a direct result of a mechanical defect.
California lemon law lawyers often recommend that these are included in the original claim and documentary evidence is sent to the manufacturer as proof. It may be more difficult to request for payment of these incidentals without documentary evidence, and it could slow down the process.
Demand a Timely Reimbursement
Now, unfortunately, it is not as simple as collecting the proper documentation and submitting a claim to win a case – even if you do meet California lemon law qualifications.
Manufacturers will often try to delay the process by passing you from one customer service representative to the next or delay negotiations in the hope you just give up and go away. However, these delays are just an attempt to keep you from receiving what you legally deserve.
You will need to have an experienced California lemon law attorney on your side to keep fighting for your payment and ensure you receive every penny that you deserve.
It is also important that you understand some of the “tricks” manufacturers will try to use to reduce the amount that they pay you back.
If a manufacturer tries to refute some of your claims, they may suggest arbitration instead of going before a judge. Lemon law arbitration involves taking your case to a panel of arbitrators who determine whether or not you are legally entitled to a refund.
You should always avoid lemon law arbitration. Manufacturers will often sponsor the firms rather than go through neutral third parties. Regardless, the most important thing to know about arbitration is that no one is on your side. This means that the chances of you getting a full buyback amount could be quite slim!
If the manufacturer is putting up a fight, you should not be afraid to take the case to an experienced lemon law lawyer. California lemon law lawyers know every manufacturer trick in the book – and will be able to fight your case. Keep in mind, if you prevail, the manufacturer is responsible for all legal fees.
The Lemon Law in California may seem rather simple on the surface, but it can easily turn into a complicated matter once you are the manufacturer’s experienced legal defense team. Most companies will not hand over a new vehicle or refund thousands of dollars willingly – even if you are rightfully owed every cent.
There are two things you can do to ensure your lemon law buyback goes as smoothly as possible. First, educate yourself and be as prepared as possible for all of the potential situations. Secondly, hire a specialized California lemon law lawyer to manage your case. They know all the steps, obstacles, and secrets to making the buyback process seamless.
If you have a hunch that you need to file a lemon law claim, contact Cline APC today.