When a manufacturer can’t fix a defect covered by your warranty, California’s lemon law can require it to buy the vehicle back. Knowing what a buyback includes, and what the manufacturer is allowed to deduct, helps you tell whether an offer is fair. Faler Law Group represents California drivers seeking lemon law buybacks from vehicle manufacturers.
What Is a Lemon Law Buyback?
A lemon law buyback, also called a repurchase or restitution, is when the manufacturer takes back a defective vehicle and refunds what you paid for it. Under the Song-Beverly Consumer Warranty Act (Civil Code section 1793.2), it’s one of two remedies when a new vehicle has a warranty defect the manufacturer or its dealers can’t fix after a reasonable number of attempts. The other is a replacement vehicle.
Whether your vehicle qualifies depends on the defect, the warranty and the repair history. Learn how California lemon law works.
What a Buyback Includes
Under Civil Code section 1793.2(d)(2)(B), restitution generally includes:
- The price paid or payable for the vehicle, including transportation charges and manufacturer-installed options. That covers your down payment and the payments you’ve made, and the remaining loan or lease balance is paid off.
- Collateral charges, such as sales or use tax, license fees, registration fees and other official fees.
- Incidental damages, such as reasonable repair, towing and rental car costs you actually paid because of the defect.
Items installed by the dealer or by you that didn’t come from the manufacturer, such as some dealer add-ons and accessories, are generally excluded from the refund.
The Mileage Offset
The manufacturer can deduct an amount for your use of the vehicle before the defect showed up. The law sets the formula (Civil Code section 1793.2(d)(2)(C)):
Price paid or payable × (miles driven before the first repair visit for the defect ÷ 120,000)
For example, if you paid $45,000 and first brought the vehicle in for the problem at 6,000 miles, the offset would be $45,000 × (6,000 ÷ 120,000) = $2,250. Only the miles before that first repair visit count, not the miles you drove afterward while the problem continued. Your repair orders show the mileage, which is one reason to keep them.
Buyback or Replacement: Your Choice
If you prefer, you can take a substantially identical replacement vehicle instead of a refund. In that case, the manufacturer pays the sales tax, license and registration fees and other official fees for the replacement, plus incidental damages. The mileage offset can also apply to a replacement. The choice is yours: the law says the manufacturer can’t require you to accept a replacement.
If You Already Sold or Traded In the Vehicle
Some drivers get rid of a lemon before the manufacturer makes things right. In Niedermeier v. FCA US (2024), the California Supreme Court held that a buyer’s restitution isn’t reduced by what the buyer received for trading in or selling the defective vehicle. You may still have a claim even if you no longer have the vehicle.
What Happens to the Vehicle Afterward
Under Civil Code section 1793.23, a vehicle the manufacturer reacquires because of a defect must be retitled with the notation “Lemon Law Buyback” and carry a decal disclosing that history, and the next buyer must sign a disclosure statement before it’s resold. That protects the next buyer, and it’s also why manufacturers sometimes offer a cash settlement that lets you keep the vehicle instead.
How the Buyback Process Usually Works
- Document the repair history. Keep every repair order showing your complaint, the dates and the mileage.
- Request a repurchase in writing. Some manufacturers have opted into newer California procedures that require written notice at least 30 days before a lawsuit can be filed, and set deadlines for the manufacturer to respond.
- Review the offer carefully. Check the price used, the mileage offset, the fees included and any release you’re asked to sign.
- Hand over the vehicle and get paid. At closing, the manufacturer pays off the loan or lease and refunds the rest to you.
- If there’s no fair offer, a lemon law claim may be filed. A court can award a civil penalty of up to two times your actual damages if the manufacturer willfully failed to meet its obligations.
Is the manufacturer offering a buyback, or refusing one?
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Bought your vehicle used? See how California lemon law applies to used cars.
Lemon Law Buyback FAQ
How is a lemon law buyback calculated in California?
A buyback generally refunds the price you paid or owe for the vehicle, plus sales tax, registration and other official fees and certain out-of-pocket costs. The manufacturer can then subtract a mileage offset for the miles you drove before you first brought the vehicle in for the problem.
How much is deducted for the miles I drove?
The offset is the vehicle’s price multiplied by the miles driven before the first repair visit for the defect, divided by 120,000. For example, on a $45,000 vehicle first taken in for the problem at 6,000 miles, the offset would be $2,250. Miles driven after that first repair visit don’t count.
Do I get my down payment back in a lemon law buyback?
Generally, yes. Restitution is based on what you paid or owe for the vehicle, so your down payment and the payments you’ve made are included, and the remaining loan or lease balance is paid off as part of the buyback.
Can the manufacturer make me take a replacement vehicle instead of a refund?
No. Under California’s lemon law, the buyer can choose a refund instead of a replacement, and the manufacturer can’t require you to accept a replacement vehicle.
What if I already traded in or sold my lemon?
You may still have a claim. In 2024, the California Supreme Court held in Niedermeier v. FCA US that restitution isn’t reduced by the amount a buyer received for trading in or selling the defective vehicle.