Buying a new vehicle should provide confidence that your car will be safe, reliable, and dependable. Unfortunately, some vehicles develop serious defects that cannot be repaired despite repeated attempts by the manufacturer or dealership. When that happens, California’s Lemon Law may provide an important remedy: a vehicle buyback, also called a repurchase.
But what exactly does a California Lemon Law buyback include? Many consumers assume they will simply receive the purchase price of their vehicle back. In reality, a qualifying buyback can include much more than the vehicle’s sticker price.
Under California’s Song-Beverly Consumer Warranty Act, a manufacturer may be required to repurchase a qualifying defective vehicle and reimburse the consumer for certain amounts paid in connection with the vehicle. The exact amount depends on the circumstances of the claim, the vehicle’s purchase or lease terms, and applicable deductions.
At Khachikyan Law Firm – Lemon Busters, we help California consumers understand their rights when a defective vehicle continues to require repairs. If you believe you purchased or leased a lemon, understanding what may be included in a buyback can help you make informed decisions about your claim.
What Is a California Lemon Law Buyback?
A California Lemon Law buyback is a form of restitution in which the vehicle manufacturer takes back a qualifying defective vehicle and reimburses the consumer for amounts covered by California law.
California law provides that, when a manufacturer is unable to repair a qualifying new motor vehicle to conform to its express warranty after a reasonable number of repair attempts, the manufacturer must generally either replace the vehicle or promptly make restitution. The consumer has the right to elect restitution instead of replacement.
A buyback is therefore more than a traditional vehicle trade-in. You are not simply selling your defective vehicle back to the dealership at its current market value. Instead, the manufacturer may be required to provide restitution based on amounts covered under the Lemon Law.
What Is Typically Included in a California Lemon Law Buyback?
The specific amount of a buyback varies from case to case. However, California law identifies several categories of amounts that may be included in restitution.
1. Down Payment
Your down payment may be included in the buyback calculation.
If you paid a substantial amount upfront when purchasing your vehicle, that amount may be part of the restitution you receive when the manufacturer repurchases the vehicle.
2. Monthly Payments
Payments made toward the vehicle may also be included.
For a financed vehicle, this can include qualifying amounts paid toward the purchase. The calculation can become more complicated when there is an outstanding loan balance, which is why consumers should carefully review any proposed buyback calculation before agreeing to it.
3. Sales or Use Taxes
California Lemon Law restitution can include applicable sales or use taxes associated with the vehicle.
California Civil Code Section 1793.2 provides that restitution includes collateral charges such as sales or use tax, license fees, registration fees, and other official fees.
4. Registration and License Fees
Certain registration, licensing, and other official vehicle fees may also be included in a qualifying buyback.
These charges can add up, particularly when you have recently purchased a vehicle. A proper buyback calculation should account for applicable qualifying fees rather than focusing solely on your monthly payments.
5. Manufacturer-Installed Options
The purchase price used to calculate restitution can include charges for transportation and manufacturer-installed options.
For example, if your vehicle was purchased with factory-installed options that were part of the transaction, those charges may be included in the restitution calculation under California law.
There can be important distinctions between manufacturer-installed options and aftermarket items installed by a dealer or the consumer. California law specifically excludes nonmanufacturer items installed by a dealer or the buyer from the statutory restitution amount.
6. Certain Incidental Expenses
A Lemon Law buyback can also include qualifying incidental damages.
Depending on the circumstances, these may include reasonable expenses such as:
- Towing charges
- Rental car expenses
- Certain repair-related costs
- Other reasonable out-of-pocket expenses connected to the vehicle's defect
California law expressly identifies reasonable repair, towing, and rental car costs actually incurred by the consumer as examples of incidental damages.
Keeping receipts, invoices, rental agreements, and other documentation can therefore be important when pursuing a Lemon Law claim.
Is There a Mileage Deduction on a California Lemon Law Buyback?
Potentially, yes.
One of the most important parts of a Lemon Law buyback calculation is the mileage offset.
California law allows the manufacturer to reduce restitution by an amount directly attributable to the consumer's use of the vehicle before the consumer first delivered the vehicle to the manufacturer or its authorized repair facility for correction of the problem that gave rise to the nonconformity.
This means the calculation is not necessarily based simply on your vehicle's current mileage.
The timing of the first repair visit for the problem that forms the basis of the Lemon Law claim can be particularly important. Because mileage offsets can affect the amount of restitution, consumers should have an attorney review the manufacturer's calculation before accepting a buyback offer.
Does a Lemon Law Buyback Pay Off My Auto Loan?
If you financed your vehicle, the buyback process may involve your lender or lienholder.
The manufacturer generally needs to address the outstanding financing as part of the repurchase process, while the consumer receives the appropriate portion of the restitution. The exact process depends on the loan balance, payments already made, and the overall buyback calculation.
If you still owe money on your vehicle, do not assume that a manufacturer's proposed settlement automatically accounts for everything correctly. Review the numbers carefully and make sure you understand how the loan will be handled before signing an agreement.
What Happens to the Vehicle After a Lemon Law Buyback?
When a manufacturer repurchases a vehicle under California's Lemon Law, the vehicle is not simply returned to the dealership and sold without disclosure.
California law contains specific requirements for vehicles reacquired by manufacturers. A qualifying vehicle may receive a “Lemon Law Buyback” notation on its title, and manufacturers must provide certain disclosures concerning the vehicle's history before transferring it to a subsequent purchaser.
The required disclosure can include information about the vehicle's year, make, model, VIN, the nature of reported nonconformities, and repairs performed in an attempt to correct those problems.
Does a Buyback Include Attorney's Fees?
In a successful California Lemon Law case, consumers may also be entitled to recover reasonable attorney's fees and costs.
California law provides for recovery of reasonable attorney's fees and costs in qualifying actions.
This is one reason consumers should not assume they have to handle a Lemon Law dispute with a major vehicle manufacturer on their own.
At Khachikyan Law Firm – Lemon Busters, we represent consumers in Lemon Law claims and pursue the compensation available under California law. The firm states that it handles qualifying Lemon Law cases without upfront attorney fees, with the manufacturer responsible for attorney fees when required by law.
Can You Receive More Than a Buyback?
In some circumstances, yes.
A buyback is one potential remedy under California's Lemon Law, but it is not necessarily the only form of recovery available.
California law permits consumers to pursue damages and other legal or equitable relief when a manufacturer fails to comply with its obligations. Under certain circumstances, a consumer may also be able to pursue a civil penalty of up to two times the amount of damages.
Whether a civil penalty or other additional recovery is available depends on the specific facts of the case, including the manufacturer's conduct and whether the violation was willful.
This is why it can be important to have an experienced Lemon Law attorney evaluate the entire history of your vehicle rather than simply accepting the manufacturer's initial buyback proposal.
What Documents Should You Keep for a Lemon Law Buyback?
If you believe your vehicle may qualify under California's Lemon Law, gather as much documentation as possible.
Important records can include:
- Purchase or lease agreement
- Financing documents
- Repair orders
- Warranty documents
- Service invoices
- Rental car receipts
- Towing receipts
- Registration documents
- Communications with the dealership
- Communications with the manufacturer
- Records showing when you first reported the defect
- Documentation showing how long the vehicle was in the repair facility
Even repair orders stating that a problem could not be duplicated can be valuable. Your repair history can help establish the nature of the defect, the number of repair attempts, and the amount of time the vehicle was out of service.
How Is a California Lemon Law Buyback Calculated?
There is no single buyback amount that applies to every vehicle.
Generally, the calculation can involve the amounts you paid or were obligated to pay for the vehicle, qualifying taxes and official fees, and eligible incidental expenses. A mileage offset may then reduce the restitution amount when applicable.
For example, consider a consumer who purchased a vehicle with a down payment, made numerous monthly payments, paid sales tax and registration fees, and incurred rental car and towing expenses because of repeated defects. The potential buyback calculation could involve several of these categories rather than simply refunding the vehicle's purchase price.
Because every situation is different, consumers should be cautious about relying on a simple online calculator or a manufacturer's initial offer without having the numbers reviewed.
What If the Manufacturer Offers You a Buyback?
If the manufacturer has offered to buy back your vehicle, that can be an important development, but it does not necessarily mean you should immediately sign the paperwork.
Before accepting an offer, consider having an attorney review:
- The total restitution amount
- The mileage offset
- Taxes and registration fees
- Your down payment and monthly payments
- The treatment of your outstanding loan
- Incidental expenses
- Attorney's fees and costs
- Any release of additional claims
- The terms for returning the vehicle
A settlement agreement may contain language releasing the manufacturer from additional claims. Understanding what you are agreeing to before signing can help prevent surprises later.
How Khachikyan Law Firm – Lemon Busters Can Help
Dealing with a defective vehicle can be frustrating enough without having to negotiate with a large automobile manufacturer.
Khachikyan Law Firm - Lemon Busters represents consumers dealing with defective vehicles throughout Glendale, the greater Los Angeles area, and California. The firm reviews repair histories, gathers relevant documentation, communicates with manufacturers, and pursues remedies such as buybacks, replacement vehicles, and financial compensation when appropriate.
The firm's website states that its Lemon Law team has handled thousands of cases and recovered more than $10 million in compensation for clients.
If your vehicle has required repeated repairs or you have received a Lemon Law buyback offer from a manufacturer, having an attorney review your situation may help you understand whether the offer reflects the compensation available under California law.
Contact a California Lemon Law Attorney
A vehicle that repeatedly breaks down can cost you far more than the inconvenience of visiting the dealership. Lost time, rental cars, towing expenses, repeated repairs, and the frustration of driving an unreliable vehicle can quickly add up.
If you believe your vehicle is a lemon, you may have options under California law. A California Lemon Law attorney can review your repair history, purchase or lease documents, mileage, and communications with the manufacturer to determine whether you may qualify for a buyback or another remedy.
Khachikyan Law Firm – Lemon Busters offers free case reviews and represents California consumers in Lemon Law matters with no upfront attorney fees in qualifying cases. Call (747) 966-4508 or contact the firm online to discuss your vehicle and learn more about your legal options.
This article is intended for general informational purposes only and does not constitute legal advice. Every Lemon Law case is different, and the potential recovery depends on the specific facts and circumstances of the claim.
