The Lemon Law Process
Refund / Lemon Buyback
If your purchase or leased your vehicle and it is a ālemon,ā your refund will consist of the following:
- Monthly payments and down payment;
- Collateral charges, which include sales tax, finance charges, and dealer-supplied contracts and equipment.
- Incidental and consequential expenses that are related to the lemon, which include rental car or tow expenses; and
- Payment of any remaining loan balance or lease payments.
* If you are not the original owner of the vehicle, your refund will be based on your purchase price, not the original ownerās purchase price.
Replacement Vehicle
If your vehicle is a ālemonā and you get a replacement vehicle, whether it was purchased or leased, the replacement vehicle must:
- BeĀ substantially similarĀ to your vehicle as it existed at the time you purchased or leased it;
- Include the same service contract, if applicable;
- Include any undercoating, rustproofing or other factory/dealer options that came with the original vehicle; and
- Reimburse you any incidental and consequential expenses that are related to the lemon, which include rental car or tow expenses.
* You will be responsible for any difference in price between the original and replacement vehicle.
Mileage Offset Formula
If your vehicle is a ālemonā and you get a refund or replacement, the manufacturer is entitled to deduct an offset for the time that you drove your vehicle ātrouble-free.ā The mileage offset is calculated by multiplying the purchase price by the mileage at the first warranty repair attempt for the problem that rendered it a lemon, and dividing this amount by 120,000 (which in California, is the average life expectancy of a vehicle).
Following is an example to illustrate the mileage offset formula:
(Purchase Price x Miles at 1st Repair Attempt) Ć· 120,000
- Price paid by consumer for the vehicleā¦ā¦ā¦ā¦ā¦ā¦ā¦ā¦ā¦..$20,000
- Miles driven by consumer at first repair attemptā¦ā¦ā¦ā¦ā¦ā¦ā¦ā¦ā¦9,000
- ($20,000 x 9,000) / 120,000 = $1,500
In this case, the mileage offset would be $1,500, which gets deducted from the total refund.
Use Our Calculator to See What Your Mileage Offset Could Be
Cash Compensation
If the problems with your vehicle do not rise to the level of it being considered a ālemon,ā you may be entitled to receive cash compensation for its diminished value as a result of its problems. Many times the problems with a vehicle may not rise to the level of a āsubstantial impairment.ā In these situations, the manufacturer will often pay the consumer a ācash and keepā settlement. This is where you will keep your vehicle and receive a sum of money for the problems you experienced with it. Also, the remaining portion of the warranty will remain in effect.
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