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Lemon Law Buyback Offers: Things to Watch Out For

Issue #1 – the lemon law does not require you to sign a release or settlement agreement.

If Ford, General Motors, FCA, Kia, Hyundai, Toyota, BMW, Mercedes, Tesla or any manufacturer has offered to repurchase or replace your vehicle, there are a few lemon law related issues to keep in mind.

Lemon law requires the manufacturer to repurchase or replace a qualifying vehicle.  It does not require, or authorize the manufacturer to require, a signed settlement agreement or release.  These agreements are often packed with extraneous provisions such as confidentiality clauses and waivers of claims you do not even know you have yet.  

The manufacturer is not complying with the law if it requires you to sign one of these agreements as a condition before receiving your buyback or replacement remedy.  Yet in our experience, manufacturers often state that an agreement must be signed.

Issue #2 – the manufacturer does not get to dictate the mileage offset.

As discussed elsewhere on this site, lemon law provides that for a breach of express warranty claim, the manufacturer may reduce your reimbursement for miles driven before the problems with the vehicle started.  There is a formula in the statute for calculating this “mileage offset.” (See California Civil Code § 1793.2(d)(2)(C).)

One of the most problematic issues we see with manufacturer repurchase or replacement offers is that they make overly aggressive mileage offset calculations. They often try to dictate the offset and fail or even refuse to show how they calculated it.  Sometimes they even cheat by applying the offset to the total odometer miles instead of the miles driven before the first problem, or by applying a lease overmileage calculation instead of using the formula written in the law!

Calculating the mileage offset can be tricky, and it often requires some technical and legal  analysis. For instance, if your car leaked coolant at 10,000 miles, had the water pump replaced at 20,000 miles, overheated at 30,000 miles and required an engine replacement at 40,000 miles, which is the correct mileage offset?  We would probably argue 10,000 miles, because repeat cooling system problems starting there were the root cause of the eventual premature engine failure. We have seen many situations where manufacturer would argue that 40,000 miles should be the offset–and the difference can be thousands of dollars in reimbursement.  

Issue #3 – beware of creative deductions.

We’ve been handling lemon law buybacks for 14 years, yet no two are alike, and we continue to see new and creative methods by manufacturers of deducting from your reimbursement.   There are too many different methods to count them all. The short answer is that the method of determining how to repurchase or replace a vehicle under the lemon law is laid out at California Civil Code Section 1793.2.   The longer answer is that the more creative the deduction, the more you may need an attorney experienced with all of the lemon law case precedent and surrounding regulation to argue against it.    

Issue #4 – the manufacturer is not doing you a favor by buying back your vehicle.

This is a broader issue that actually covers the previous three.  Manufacturers, especially when dealing directly with consumers who do not have attorneys, often act as though a lemon law buyback is some kind of good will gesture. It is not a favor–it’s a legal requirement.   

That means they don’t get to tell you if your vehicle qualifies, they don’t get to dictate your compensation, and quite frankly, they don’t deserve credit or concessions for buying your vehicle back if it’s a lemon.  The law requires them to do so.  You will know excellent customer service when you see it.  If you feel you are being pushed around, just remember that the manufacturer’s customer service department probably has a lot more experience with lemon law than you do.  

The good news is, the California legislature anticipated this issue, and that’s why the lemon law requires the manufacturer to pay your legal fees.  If you want a free second opinion, or are ready to have your own advocate, don’t hesitate to contact us today.

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