If your vehicle has problems with its engine, transmission, electrical systems or other components, and those problems seem to be unfixable, your vehicle may be a lemon. A “lemon” is a vehicle that meets the California Lemon Law’s criteria for a defective product. If your defective vehicle falls under the protection of the California Lemon Law, you may be able to sue the auto manufacturer and get a refund for your vehicle, plus some additional compensation.
The California lemon law refund, or lemon law buyback, is determined by the total amounts paid or payable to your vehicle, the mileage at which the defect first arose and California’s determined average vehicle lifespan.
TABLE OF CONTENTS:
- The Lemon Law Buyback Formula
- How The Lemon Law Buyback Formula Works
- How Loans and Leases Affect Lemon Law Buybacks
- California Lemon Law Buyback Formula Examples
- What Else Can I Get For My Defective Vehicle?
- How to Maximize Your California Lemon Law Buyback Amount
The Lemon Law Buyback Formula
The California Lemon Law provides a specific formula for determining your lemon law buyback amount. The formula is the total amount paid or payable to the vehicle, minus the mileage deduction.
(Total amount paid or payable) – (mileage offset) = lemon law buyback
The mileage-based deduction is based on how far your vehicle made it through a vehicle’s expected lifespan. This mileage deduction is sometimes called a “usage fee” because it allows the manufacturer to compensate you only for the remaining lifespan of the car, and not the time or mileage period during which the car worked properly. Here’s how to calculate it:
Take the actual price paid or payable to the vehicle (including charges for transportation and manufacturer-installed options), multiply it by the mileage of your vehicle at which you had your first repair attempt, and divide it by 120,000 miles.
The formula below is how you calculate the mileage offset:
(Vehicle purchase price) x (Mileage at first repair) / 120,000 miles = mileage offset
You can also access our handy lemon buyback calculator.
How The Lemon Law Buyback Formula Works
It abides by a basic logic. You begin with the total amount paid or payable for your vehicle. According to the California Lemon Law, this includes the cash price of the vehicle, any charges for transportation and manufacturer-installed options, sales tax or use tax, license fees, registration fees and other official fees associated with the purchase. The vehicle owner or lessee may also be compensated for incidental damages such as reasonable repair costs, rental car costs, and/or towing costs.
The amount deducted is based on how far you got through a vehicle’s expected lifespan before you experienced the defect. According to the California Lemon Law, a vehicle’s expected lifespan is 120,000 miles. That’s why the mileage at your first repair is divided by 120,000. If you got through a certain percentage of the expected lifespan, then that percentage is taken off your final buyback amount.
For example, if the defect showed up at 12,000 miles, then you only got one tenth, or 10% of the expected lifespan, and therefore 10% of the purchase price is deducted from your lemon law refund. However, if the defect showed up at 60,000 miles, then you got 50% (halfway) through the expected lifespan, and 50% of the purchase price is deducted from your final lemon law buyback.
How Loans and Leases Affect Lemon Law Buybacks
If your defective vehicle has outstanding monthly car payments for a vehicle loan or a lease at the end of your lemon law lawsuit, you should not stop making your payments just because you are currently pursuing a lemon law claim.
If you have outstanding monthly payments on your vehicle for either a loan or a vehicle lease, then those will be paid for by the auto manufacturer. In addition, you get a lemon law refund for what you paid for the vehicle, minus that mileage offset. To calculate your lemon law refund in this situation, follow this formula:
(Total amount already paid) – (mileage offset) = lemon law buyback
Here, the total amount paid is your initial down payment, other fees associated with the vehicle purchase, and the monthly payments you have made up to that point. However, the mileage offset formula stays the same:
(Total amount payable) x (Mileage at first repair) / 120,000 miles = mileage offset
How Vehicle Loan Payments Affect Your Lemon Law Case
California Lemon Law Buyback Formula Examples
Keep in mind that these simple buyback formula examples do not account for out-of-pocket expenses for towing, rental cars, repairs and other items the driver had to incur due to the vehicle defect.
Thomas Pays For a New Vehicle in Full
Total Amount Paid: $54,000
Mileage at First Repair: 24,000 miles
How far did his vehicle make it through its expected lifespan? The amount driven (24,000 miles) divided by the expected lifespan (120,000 miles) reveals that it made it through 20% of that lifespan. This means 20% of the total amount paid ($54,000) is taken off his lemon law refund, making his mileage offset $10,800.
Estimated Lemon Law Buyback: $54,000 – $10,800 = $43,200
Thomas Leases a New Vehicle
Total Amount Payable: $54,000
Mileage at First Repair: 24,000 miles
Down Payment: $26,000
Monthly Payment: $650
Number of Payments: 5
To get the total amount already paid, multiply the monthly payment ($650) with the number of monthly payments (five), then add it to his down payment. $3,250 in monthly payments, plus $26,000 gets a total amount paid of $29,250.
How far did his vehicle make it through its expected lifespan? The amount driven (24,000 miles) divided by the lifespan (120,000 miles) reveals that it made it through 20% of that lifespan. Here, 20% of the total amount payable ($54,000) is taken off the refund, so his mileage offset is still $10,800. The calculation of the mileage offset remains the same.
Estimated Lemon Law Buyback: $29,250 – $10,800 = $18,450
What Else Can I Get For My Defective Vehicle?
If you win a lemon law claim, the auto manufacturer has to pay your attorney fees and costs. In addition, the manufacturer may have to cover any out-of-pocket expenses you incurred, such as towing, rental and transportation costs. If you paid for defect-related repairs out of pocket, the manufacturer may also have to cover those repair expenses. These costs are considered incidental and consequential damages.
If you anticipate opting for a lemon law buyback, keep in mind that the estimated result you get by using the lemon law formula is not a guaranteed result. The actual result of a successful lemon law claim depends on the facts of a particular case.
If the auto manufacturer is found to have sold or leased a lemon willfully, the manufacturer may also have to pay a civil penalty up to twice the amount of actual damages. Not all lemon law cases result in the application of civil penalties.
Some lemon owners, upon winning a lemon law claim, may waive the refund and instead opt for a replacement vehicle. In this case, the replacement vehicle must be substantially similar to the model of the defective vehicle.
How to Maximize Your California Lemon Law Buyback Amount
The first step to maximizing your lemon law buyback is to gather all of the documents you will need for your case. These documents include your sales or lease contract, receipts for monthly payments (if any) on leases or vehicle loans, warranty information, repair orders, and any communication between you and the manufacturer or dealership. If you’re not sure what documents you need, consult with a lemon law attorney regarding your claim.
When you experience a vehicle issue that could point to a defect, record the mileage of your vehicle. If you have experienced ongoing issues and cannot recall the mileage when your problems first started, look at your repair orders. These repairs can build a vehicle history and help you pinpoint when these issues first began.
If you had to pay for any expenses such as rental car costs, repair costs, towing costs or any transportation costs, keep those receipts. You may increase your payout at the end of a lemon lawsuit by getting compensated with incidental damages.
Finally, seek the legal expertise of a lemon law attorney. Initial consultations are free to the consumer. The legal assistance of a lemon law attorney, from consultation to settlement, will cost you nothing out of pocket. Lemon law attorneys only get paid if you win, and our attorneys’ fees and costs are paid by the manufacturer as part of the final settlement.
Contact A California Lemon Law Attorney Today
You can get a free consultation from a lemon law lawyer by calling our number 833-208-8181 or filling out our consultation form on our contact page.
Lemon Law Help by Knight Law Group is an automotive lemon law firm that exclusively practices in California. If you are a California resident who purchased or leased a defective vehicle from a licensed dealership in California, we may be able to help you get rid of your potential lemon and recover significant cash compensation. Model year restrictions apply: 2020–Present vehicle models only.
However, we cannot help those who reside outside of California or purchased their vehicle outside of California unless they are active duty members of the Armed Forces, nor will we be able to refer those to a lemon law firm in their states.
To learn more about the California Lemon Law and your legal rights, visit our guide on the California Lemon Law for more information.
