What Is the Difference Between a Lemon Law Buyback and a Trade-in?

A Lemon Law buyback and a trade-in are two different methods for getting rid of a vehicle, but they both involve different circumstances and outcomes.

Lemon Law Buyback

A Lemon Law buyback refers to a vehicle that has been declared a “lemon” under the Lemon Law and is repurchased or bought back by the manufacturer or dealer due to repeated or unresolved defects. Lemon Laws are state-specific consumer protection laws that provide remedies for buyers or lessees of new or CPO Vehicles that have significant defects that impair their use, value or safety. If a vehicle is deemed a “lemon” and qualifies for a Buyback under the applicable Lemon Law, the manufacturer or dealer is typically required to repurchase the vehicle from the owner or lessee, usually at the original purchase price or a prorated amount, minus certain deductions for use and mileage.

Trade-in

A trade-in, on the other hand, is a common method when the owner wants to purchase a new one. In a trade-in, the owner brings their current vehicle to a dealership and exchanges it for a credit towards the purchase of a new vehicle. The dealership will typically appraise the value of the vehicle and offer a trade-in value based on factors such as the vehicle’s condition, age, mileage, and market demand.

How does California determine a Lemon Law Buyback?

According to California’s governmental site, the formula for determining the Lemon Law Buyback amount is:

1. The actual price you paid or the Manufacturer’s Suggested Retail Price (MSRP), whichever is less.
2. A mileage deduction is calculated by multiplying the total miles the vehicle traveled before the first repair attempt for the substantial problem, by the actual purchase or lease price, then dividing that number for 120,000 (California’s determined average for a lifespan of a vehicle).
3. The incidental damages, which include expenses related to the lemon vehicle such as towing fees, rental car expenses, and repair costs.
4. The manufacturer can also deduct a reasonable allowance for the use from the Buyback amount. The reasonable allowance for use is calculated by multiplying the actual purchase price by the total miles on the vehicle at the time it was first brought in for repair of the substantial defect, and then dividing by 120,000.

The Lemon Law Buyback amount is calculated by subtracting the mileage deduction, incidental damages, and reasonable allowance for use from the actual price you paid or the MSRP, whichever is less.

There’s a lot that goes into getting financial restitution in a Lemon Law case, not to mention the steps required to even make a claim. That’s why if you are considering filing one, it is strongly recommended that you speak with a Lemon Law lawyer. As one of California’s premier Lemon Law litigators, the Lemon Law attorneys at Strategic Legal Practices (slpattorney.com) work with you to ensure your legal rights are fully protected — and that you get the most successful Lemon Law Buyback you deserve.

Call the Lemon Law experts at Strategic Legal Practices NOW at 844-423-4464 to discuss your specific case, or contact us at slpattorney.com