Prevailing in a lemon law manufacturer buyback case is a great feeling – and receiving the full compensation for a faulty vehicle is even better. But if you are in the middle of a lemon law claim or considering filing one, you might be wondering: what exactly is the lemon law calculation, and how much will I get back from the manufacturer?
The final amount you receive from the manufacturer in the California lemon law buyback program for cars is dependent on numerous factors. Some of the highest payout amounts have exceeded hundreds of thousands of dollars – but these cases usually involve expensive luxury vehicles or include other causes of action besides the lemon law, for example fraud.
Ultimately, the reward you receive should be equivalent to the amount you paid for the car and any additional costs that were related to the vehicle’s mechanical issues. So, as long as you prevail in your case, you should not lose any money whatsoever, with the exception of one deduction, an offset for use, but more on that later.
To get a feeling of how much money to expect from your payout, you can use a lemon law buy-back calculator to get a fairly accurate idea.
What is the Lemon Law Buyback Calculation Formula?
There is a specific manufacturer buyback formula used to estimate the repurchase value of the vehicle. Unfortunately, you are not guaranteed to receive the full amount for the vehicle you paid the dealership. The manufacturer can secure a deduction from the purchase price for non-manufacturer installed options and an offset for use, but capped at the first visit for your problem.
This lemon law buyback calculation is known as a usage fee or mileage offset. Essentially, this is the amount deducted from the purchase price for using the vehicle before it presents any defects or issues. But, if the defect starts from day one, there should be no mileage offset deduction.
The value deduction is determined by the number of miles the vehicle was driven before it was brought in for the first repair attempt.
The state of California has a specific formula, which is:
(Miles driven before the first repair attempt/120,000 miles) x (the cash price of the vehicle)
As an example, let’s say that you purchased a vehicle for $32,000 and drove it around for 7,500 miles before taking it in for the first repair attempt. You would calculate the usage fee like this:
(7,500/120,000) x (32,000) = $2,000
The $2,000 would be deducted from your payout, leaving you with a buyback amount of $30,000 for the vehicle alone.
Now, don’t worry if math is not your strong suit. A good lemon lawyer in California will make sure you’re getting the highest manufacturer buyback amount.
Cline APC has a digital lemon law buy back calculator available that anyone can use for an estimated final payout should they win their lemon law claim.
What Costs are Guaranteed?
There are specific amounts that the manufacturer is required by law to fulfill once you prevail in your case.
The first amount that you are entitled to in the car buyback program is the price of the vehicle, including the original down payment made at the dealership, all monthly payments, and the remaining amount on the loan for the vehicle. This is called the amount paid or payable. The usage fee is deducted from this total amount.
Any additional fees related to the vehicle are also refunded in the manufacturer buyback, including registration and licensing fees, as well as state taxes paid at the time of sale.
Further, if you prevail, the manufacturer is required to pay all legal fees for your lemon law lawyer in California. This could certainly be a significant amount, particularly if your case required numerous negotiations or dragged on for a lengthy period of time.
Add Up Additional Incidental Costs
Now, in addition to the calculated value of the vehicle and legal fees, you are also entitled to compensation for incidental costs that have accrued and are related to the lemon. However, your lemon lawyer in California must be able to prove that these costs are correlated to the defective vehicle.
For instance, say that you are in a car accident with your defective vehicle. If the mechanical defect caused the accident due to issues like faulty brakes or steering problems, the manufacturer is responsible for all related costs, such as:
- Repair costs to other vehicles involved
- Insurance costs
- Fees related to injuries caused by the accident
- Pain and suffering (such as time lost from work or compensation for permanent damage)
You can also receive additional compensation for costs you may not realize are actually related to your lemon. Say that you were out of state and your vehicle broke down because it had a defective engine. You then had to have the car towed and take a taxi to a hotel for the night while it was repaired. The manufacturer would owe you for the cost of the tow, taxi ride, and the hotel – since these were related to the defect.
Furthermore, you can receive compensation for any additional fees which resulted from the buyback. Some insurance companies or services (such as AAA) charge early termination fees. If you have to cancel these because your vehicle was defective, the manufacturer will have to pay those fees for you.
Now, there are some payments you may have made regarding the vehicle that the manufacturer will claim it need not reimburse. These may include any after-market features which were added to the vehicle, like rims, window tints, paint, or stereo systems. It is not always true that the manufacturer can take a deduction for these items.
The manufacturer usually does not have to cover any damages that are directly a result of driver abuse and not related to the mechanical defect. So, if you scratched the car and had to have it fixed, you may not receive any repayment.
If there is any chance that the driver is at fault for the mechanical defect, it will be quite difficult for you to receive payment. Say that you were in a serious rear end collision damaging the transmission and a few weeks later your car has troubles with the transmission.
The manufacturer could argue that you were actually the cause of the problem since it was in an accident – even though the transmission issue is likely unrelated. In this case, you will need a good lemon lawyer in California to fight for you.
Lemon Law Buyback Calculation FAQs
Are my attorney costs included in the lemon law buyback calculation?
Yes. If your vehicle is ruled a lemon, all your attorney and court costs are factored into the lemon law buyback calculation. Most lemon attorneys work on a contingency fee agreement – meaning consumers do not pay any out-of-pocket costs to hire legal assistance. In other words, ANYONE can afford to hire a skilled lemon attorney.
Can I seek a lemon law buyback on a leased vehicle?
Yes. Leased vehicles are covered under California lemon law and you can seek compensation in the same way you would a purchased vehicle.
How long does it take to get my full buyback?
It depends. Each case and lemon law buyback calculation is different. Trustworthy lemon attorneys do not get paid until they win the case, so you can rest assured they will work to resolve your settlement as quickly as possible and earn the highest compensation. Lemon cases very rarely go to trial, but if they do, the buyback process will take longer.
Can I still seek a buyback if my warranty is expired?
As long as you first reported the defect to the manufacturer while the warranty was still in effect, your lemon claim will be valid. If the warranty has expired – and you cannot prove the defect presented itself within the terms of the warranty – you won’t likely be able to seek a settlement.
What if I purchased my vehicle outside of California?
To qualify for benefits under California lemon law, the vehicle must have been purchased/leased, registered, and repaired in the state of California while under warranty. There is one exception: active military personnel can still make a lemon claim if the vehicle was purchased in the United States and the automaker sells vehicles in California. You must either a) be a California resident or b) be stationed in California when you purchased or leased the vehicle.
The purpose of hiring a lemon law firm to assist in your claim is so you can receive every single dollar that you are owed from the manufacturer for selling a defective vehicle. Having a good lemon lawyer in California on your side is worth every penny – especially considering that you don’t have to pay a dime for them if you win your case.
If you are ready to hire a lemon law attorney or you have any questions regarding your lemon or the car buy back program, please reach out to our team at Cline APC. Our lemon law legal group offers a free case evaluation and consultation to help you get started and calculate just how much money you could receive if you win your claim.