What Is A Cash-And-Keep Settlement And Should I Accept It?

If you’ve had the unfortunate luck of buying/leasing a lemon, you’re probably in talks with the manufacturer about what your lemon law settlement options are.

The automaker’s representative will more than likely discuss cash and keep settlement lemon law resolution – or just a cash settlement. They will probably tell you it is the best option given the circumstances and will be the quickest way to put the situation behind you.

Don’t take the bait on this.

Manufacturers generally push for the cheapest and fastest option for them – which is usually a cash settlement lemon law alternative.

This option almost always leaves the consumer short-changed.

In this post, we want to discuss the nature of the cash and keep settlement concerning California lemon law – and what your best option might look like.

Let’s dive in.

What Does “Cash and Keep” Mean in California Lemon Law?

A cash-and-keep settlement is when the automaker offers you (the consumer) a sum of money to compensate you for your troubles after selling/leasing you a lemon. Additionally, you get to keep the defective vehicle.

In a perfect world, the cash-and-keep settlement would cover the cost of the vehicle as well as the incidental expenses related to the lemon, such as towing fees, cab fares, etc.

Unfortunately, this is not usually the case. Most cash and keep settlements are less than the original purchase price of the vehicle.

Why Do Automakers Push for a Cash and Keep Settlement?

To reiterate, auto manufacturers prefer the quickest and easiest solution to compensate consumers for lemon vehicles. This usually involves a cash settlement lemon law resolution.

If your vehicle meets the California lemon law requirements (more on that later) – and you are planning to pursue a lemon law buyback – the manufacturer will be faced with court costs, attorney fees, reimbursements, and more.

In addition to these payouts, losing a lemon law case is a mark against their global brand reputation.

By encouraging you to take cash and keep the settlement, they are trying to avoid the costly legal system and minimize the payout.

Should You Accept a Cash Settlement Lemon Law Resolution?

As a lemon law lawyer in California, I would generally say no.

The cash settlement lemon law alternatives almost always favor the manufacturer. But the decision is not always black and white. It depends on the depth of the issue.

For example, let’s say your vehicle was ruled a lemon because the back window won’t roll down. You may decide you can live with this defect – or you plan to have a 3rd party mechanic attempt to fix it.

A cash-and-keep settlement may be a viable option in scenarios like this.

However, we typically recommend against the cash settlement lemon law alternative route.

Manufacturers will commonly try to downplay defects to encourage cash and keep settlement. If you have a lemon, your goal is to get compensated for every last penny you lost from the situation – and then some.

The cash and keep-settlement lemon law alternative typically doesn’t give you what you deserve.

The best thing to do is talk with a lemon law lawyer in California before agreeing to anything. Unlike the manufacturer, the lemon law attorney is 100% on your side – and they will guide you in the right direction.

What Are the Better Lemon Law Settlement Options?

For starters, the vehicle must meet these California lemon law requirements:

  • The vehicle was covered under the manufacturer or dealer warranty when the defect(s) was first reported; and
  • The defect is substantial in that it impairs the vehicle’s safety, functionality, or value; and
  • The manufacturer-certified technicians have made a reasonable number of unsuccessful attempts to fix the defect (generally at least two); or
  • The vehicle has been out of service for repairs for 30 or more days (cumulative); and
  • The defect was not caused by neglect or driver abuse.

If your vehicle meets the qualifications, you have several lemon law settlement options.

In addition to the cash and keep settlement lemon law alternative, you can file a claim for a lemon law buyback.

We recommend this option 9 times out of 10 compared to other lemon law settlement options.

In a cash-and-keep settlement, you will likely end up with less money than you deserve.

If you choose to pursue a buyback, a lemon law lawyer in California will help you fight for all the expenses you incurred from the defective vehicle. This includes (but is not limited to):

  • The full price you paid for the defective vehicle (minus a mileage offset), including:
    • The down payment
    • All monthly payments made
    • The remaining balance of the loan
  • Official costs paid for the defective vehicle
    • Sales tax
    • Registration
  • All incidental costs stemming from the lemon
    • Towing fees
    • Cab fares
    • Hotel stays
    • Meals
    • Etc.
  • All attorney fees and court costs

When you go this route, the resolution may not be as quick as the cash and keep settlement lemon law alternative, but you will more than likely receive higher compensation – while holding the manufacturer accountable.

Turn to an Expert California Lemon Law Attorney

Regardless of whether your choose to pursue a buyback or the cash and keep the lemon law alternative, you need to consult with a lemon law lawyer in California first.

The auto manufacturer’s representatives may be friendly and accommodating, but they are not on your side. Their primary concern is to protect the company’s bottom line and reputation; your needs are not even on their radar.

When you speak with a California lemon law attorney, their primary concern is holding the manufacturer accountable for selling/leasing you a defective vehicle – and making sure you get the highest possible settlement.

If you’re not sure which option to take, get in touch with our team at Cline APC.

We offer FREE consultations to understand your situation, recommend the best lemon law settlement options, and make sure you’re not getting shortchanged.

Call us at 888-982-6915, send an email to info@clineapc.com, or fill out a free case evaluation. We’ll determine if a buyback or the cash and keep settlement lemon law alternative is best for you.

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