A lemon law buyback is when an automaker or dealership provides a full refund to the consumer after selling a defective vehicle. In addition to “buying back” the faulty product, the seller is required to compensate the consumer for all official costs (sales tax, registration, etc.), lawyer and court fees, as well as all collateral costs incurred.
Lemon law – known as the Magnuson-Moss Consumer Warranty Act – exists across the country. However, each state has its own regulations about what constitutes a lemon. Under California lemon law, a vehicle must be experiencing repeated issues, which the manufacturer is unable to repair.
These issues can include anything from engine failures to faulty window switches. To be eligible for the CA lemon law buyback program, you will need to prove your vehicle meets the state’s qualifications to file a claim.
In this post, we discuss five crucial details to understand about California lemon law before you begin the process of seeking compensation. Let’s get into it.
Table of Contents
1. What Qualifies as a Lemon?
First and foremost, you need to understand what does and doesn’t qualify a vehicle as a lemon under California lemon law. Purchasing or leasing a vehicle with manufacturer defects is extremely frustrating, we get it. But simply noticing a problem doesn’t automatically mean you have a lemon.
To be eligible for the CA lemon law buyback program, the vehicle must:
- Be covered under the manufacturer or dealership warranty when the defect was first reported; and
- Have one or more substantial defects/nonconformities that impair the vehicle’s safety, functionality, or value; and
- Have been subjected to a reasonable number of repair attempts by a manufacturer-certified repair facility (usually at least two); or
- Have been out of service for warranty-covered repairs for 30 cumulative days; and
- Have defects that were not caused by driver abuse or neglect.
You will need to have proper documentation to prove your vehicle meets these guidelines. This includes warranty terms, repair orders, invoices, receipts, and all other records. A California lemon law attorney will instruct you on all paperwork to file a claim.
2. How Does the Buyback Process Work?
Once you have all the proper paperwork to prove your vehicle is a lemon, you will need to file a claim with the manufacturer/dealership. Your goal in a lemon law claim is to get compensated for every single penny you had to spend on the defective vehicle.
This includes (but is not limited to):
- The total cost of the vehicle (minus a usage fee)
- Down payment
- All loan payments made
- The remaining balance of the loan
- All official costs
- Sales tax
- Registration fees
- Documentation fee
- Attorney and court fees
- All incidental costs (towing fees, cab fares, hotel stays, etc.)
Adding up the costs should be done with the help of an experienced California lemon law attorney. These experts will make sure no stone is unturned and you are properly compensated in your lemon law buyback.
3. What is the Usage Fee?
As mentioned above, the manufacturer is required to reimburse you for the total cost of the vehicle “minus a usage fee”. The usage fee – also referred to as the mileage offset, represents the miles the car was driven before the defect was reported.
This number is factored into the total buyback amount using a set formula. This formula accounts for three factors:
- The total cost paid for the vehicle.
- The number of miles driven.
- Typical lifespan of a vehicle.
The state of California deems 120,000 miles to be the typical lifespan of a vehicle.
So, let’s say you purchased a vehicle for $50,000 – then drove 10,000 miles before reporting the defect. The formula would look like this:
($50,000 x 10,000) / 120,000 = $4,166.67
This number would be deducted from the total buyback amount as the usage fee.
4. Coverage for Incidental Costs
Incidental costs can be very subjective. In essence, it’s all miscellaneous costs incurred due to the lemon. For example, say you were on a road trip and the engine failed due to a manufacturer defect. You would likely need to get the vehicle towed to a manufacturer-certified repair facility in California, take a cab to a hotel, rent a vehicle, stop to get food somewhere, etc.
These are all examples of incidental costs that can be factored into your lemon law buyback. You’ll need to hold onto every receipt and record to be presented in your claim. Speak with a California lemon law lawyer to understand what costs you can and cannot recoup in your claim – it’s probably more than you think!
5. Mistakes to Avoid in the Buyback Process
Navigating the California lemon law buyback program is not difficult. However, there are several significant mistakes to avoid early on. Here are some of the big ones include:
Arbitration
If your vehicle meets the qualifications of California lemon law, the automaker’s representatives may try to convince you to do arbitration rather than hire a lemon law attorney and use the legal system.
They will tell you that arbitration is a quick and easy alternative to court – and best of all, the manufacturer pays for it!
Don’t take the bait.
Arbitration involves taking your claim in front of an arbitrator or panel of arbitrators sponsored by the manufacturer. Arbitration almost always ends with the consumer being short-changed. You always want to seek justice through the legal system with a lemon law attorney on your side.
Signing Away Your Rights
In some cases, the manufacturer might try to get you to sign documents that appear to be a warranty extension or reimbursement for a couple of months’ payment on the car. These may also include a release agreement buried in the fine print – meaning you have relinquished your rights to file a claim under the CA lemon law buyback program.
Do not sign anything like this. Once your car meets the qualifications of California lemon law, get in touch with a lemon attorney immediately.
Getting Repairs from a 3Rd Party Mechanic
This is a HUGE mistake in a lemon law claim. If you’re having car troubles, it might seem like a no-brainer to take it to your trusted mechanic. This can potentially void your warranty – and invalidate a lemon law buyback.
As long as your vehicle is under warranty, the dealership or manufacturer-certified facility is your mechanic.
The best thing you can do is contact a California lemon law attorney as soon as the vehicle meets the proper qualifications. They will manage all communications with the manufacturer and make sure you are fairly compensated.
The Wrap Up
Many people assume they cannot afford a lemon law attorney – this is a misconception.
Manufacturers are required to pay for all attorney fees as part of the settlement. That said, most work on a contingency fee agreement. This means they won’t charge you anything out of pocket to take your case – and will not ask for payment until AFTER they win.
In other words, anyone can hire a skilled California lemon law attorney. If you have a hunch your vehicle is experiencing manufacturer defects, get in touch with an attorney as soon as possible. Most offer free consultations and will be happy to point you in the right direction – even if you don’t have a valid claim.