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
- What If My Lemon Vehicle is Used?
- How Loans and Leases Affect Lemon Law Buybacks
- California Lemon Law Buyback Examples
- What Else Can I Get For My Defective Vehicle?
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 the vehicle, minus the mileage-based 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. Take the actual price of 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 purchase of the vehicle, any charges for transportation and manufacturer-installed options, sales or use tax, license fees, registration fees and other official fees associated with the purchase.
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.
What if My Lemon Vehicle was Purchased Used?
Used vehicles with the applicable warranties have the same protections as new vehicles under the California Lemon Law.
The mileage offset is determined by the number of good miles you were able to drive on the vehicle before you first took it to the dealership or repair shop for the defect. When the vehicle is purchased new, you simply take the mileage on the vehicle at the time of the first repair attempt for the defect.
When the vehicle is used, you take that mileage, subtract it by the mileage at the time you purchased the vehicle, and then multiply by total amount paid/payable and divide by 120,000 miles. The formula becomes:
(Total amount paid) x ([Mileage at first repair]-[Mileage at purchase]) / 120,000 miles = mileage offset
How The Lemon Law Applies to Used Cars
How Loans and Leases Affect Lemon Law Buybacks
If your defective vehicle has outstanding payments for a vehicle loan or a lease, 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 Examples
Keep in mind that these 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
Thomas Buys a Used Vehicle in Full
Total Amount Paid: $54,000
Mileage at Purchase: 9,600 miles
Mileage at First Repair: 24,000 miles
How much should Thomas expect for a mileage offset? He is only accountable for the miles he was able to drive: 24,000 miles – 9,600 miles = 14,000 miles.
Take that amount and divide it by the vehicle lifespan (120,000 miles). Here, we see that Thomas only enjoyed 12% of the vehicle’s lifespan, so 12% is taken off the total amount paid ($54,000). The mileage offset is $6,480.
Estimated Lemon Law Buyback: $54,000 – $6,480 = $47,520
What Else Can I Get For My Defective Vehicle?
If you win a lemon law claim, the auto manufacturer has to pay your attorneys’ 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.
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.
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: 2017–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 guides on the California Lemon Law and Used Car Lemon Law for more information.
