How a lemon law buyback is calculated (including the mileage offset)
If a manufacturer repurchases your vehicle under California’s lemon law, it generally must pay restitution: the actual price paid or payable, plus collateral charges and incidental damages, less a reasonable allowance for your use before the first repair attempt.
What is included
- Price paid or payable: down payment, monthly payments made, and the remaining loan or lease balance (which is paid directly to the lender).
- Collateral charges: such as sales tax, registration, and other official fees, and some add-ons.
- Incidental damages: reasonable towing and rental car costs, for example.
The mileage offset
The manufacturer may deduct an amount for use before you first brought the car in for the problem. The formula is:
Offset = (miles driven before the first repair attempt for the defect ÷ 120,000) × price paid or payable
Example: a $48,000 vehicle first taken in for the defect at 6,000 miles: 6,000 ÷ 120,000 = 0.05, so the offset is about $2,400. Estimated restitution would be about $45,600, before adding incidentals. The miles you drove after the first repair don’t count toward the offset.
Civil penalty
If the manufacturer willfully failed to comply, for example by unreasonably refusing a buyback, the law allows a civil penalty of up to two times the actual damages, on top of the damages themselves.
Attorney fees
When the consumer prevails, the manufacturer must pay reasonable attorney fees and costs. That is why you pay nothing out of pocket.
These are general rules. Actual figures depend on your contract and the facts, and no result is guaranteed.
Think your car may be a lemon? An attorney can review your repair history for free, with no obligation. The manufacturer pays attorney fees if you win, so there is nothing out of pocket for you.
General information only, not legal advice. Every situation is different, and no particular outcome is guaranteed.