Leased Vehicles

If your leased car, truck or SUV keeps going back to the dealer for the same problem, California’s lemon law can protect you just as it protects buyers. Leasing changes some of the details, like who gets paid what in a buyback, but not your basic rights. Faler Law Group represents California drivers with defective leased vehicles.

Does California’s Lemon Law Cover Leased Vehicles?

Yes. Under Civil Code section 1795.4, a person who leases a vehicle has the same rights under California’s lemon law against the manufacturer as a person who bought it. If a leased vehicle has a defect covered by the manufacturer’s warranty, and the manufacturer or its dealers can’t fix it after a reasonable number of attempts, the manufacturer may have to buy it back or replace it.

The same standards apply as for purchased vehicles, including the repair-attempt guidelines and the warranty requirements. Learn how California lemon law works.

How a Lease Buyback Works

When a leased vehicle is bought back, the money is split between you and the leasing company, which owns the vehicle. In general:

• You get back what you paid under the lease, such as your down payment or drive-off amount, the monthly payments you’ve made, and certain fees and charges.
• The manufacturer pays off the leasing company for the rest of what’s owed on the lease, so you’re released from it.
• You can recover incidental costs caused by the defect, such as reasonable towing, rental car and repair costs you paid.
• A mileage offset may be deducted for the miles you drove before you first brought the vehicle in for the problem.

The exact amounts depend on your lease and repair history. Learn how a lemon law buyback is calculated.

Replacement Instead of a Refund

You can choose a substantially identical replacement vehicle instead of a refund if you prefer. The decision is yours: the law says the manufacturer can’t require you to accept a replacement.

Keep Making Your Lease Payments

While a lemon law claim is pending, keep paying your lease and keeping the vehicle insured. Stopping payments can put you in default with the leasing company and hurt your credit. Payments you make during the claim are typically included in what’s refunded if the vehicle is bought back.

If Your Lease Is Ending Soon

Many lease defects aren’t resolved before the lease ends. Before you turn the vehicle in or buy out the lease, talk to an attorney. You may still have a claim either way, but what you do at lease end can affect your options, and the repair records and lease paperwork you’ll need are easiest to gather while you still have the vehicle.

Leasing a Used Vehicle

If you leased a used or certified pre-owned vehicle, the rules for used vehicles generally apply. After the 2024 Rodriguez v. FCA US decision, coverage often depends on whether a new manufacturer’s warranty came with the lease. See how California lemon law applies to used vehicles.

What to Do If Your Leased Vehicle Is a Lemon

1. Keep every repair order. Make sure each one lists your complaint, the dates and the mileage in and out.
2. Keep your lease agreement and any paperwork showing your drive-off amount, fees and payments.
3. Keep paying the lease and keep the vehicle insured while the claim is pending.
4. Check your lease-end date and talk to an attorney before turning the vehicle in or buying it out.
5. Don’t sign anything from the manufacturer or leasing company, such as a goodwill offer or lease-transfer deal, without reading it carefully.
6. Act quickly. Deadlines apply, and some manufacturers now require written notice before a lawsuit can be filed.

Bought your vehicle instead? Learn more about California lemon law.

Leased Vehicle Lemon Law FAQ

Does California’s lemon law cover leased cars?

Yes. Under Civil Code section 1795.4, a person who leases a vehicle has the same lemon law rights against the manufacturer as a person who bought it. A leased vehicle with a warranty defect the manufacturer can’t fix after a reasonable number of attempts can qualify for a buyback or replacement.

What do I get back in a lease buyback?

Generally, the amounts you paid under the lease, such as your down payment or drive-off amount, the monthly payments you’ve made and certain fees, plus reasonable out-of-pocket costs caused by the defect. The manufacturer pays off the leasing company, and a mileage offset may be deducted.

Should I keep making my lease payments during a lemon law claim?

Generally, yes. Stopping payments can put you in default with the leasing company and hurt your credit. Payments you make while the claim is pending are typically part of what’s refunded in a buyback.

What if my lease is about to end?

Talk to an attorney before you turn the vehicle in or buy out the lease. You may still have a claim, but your options and the paperwork you’ll need can depend on what you do at the end of the lease.

Can I get a replacement vehicle instead of a refund?

Yes, if you prefer. The choice is yours: California’s lemon law lets you choose a refund instead of a replacement, and the manufacturer can’t require you to accept a replacement vehicle.