Lemon Law Buyback Calculator
Estimated Buyback Amount:
Understanding Lemon Law Buyback Calculations
Lemon laws are consumer protection statutes designed to provide remedies for purchasers of motor vehicles that repeatedly fail to meet quality and performance standards. If your new vehicle has a significant defect that the manufacturer cannot repair after a reasonable number of attempts, or if it's out of service for an extended period, you might be entitled to a "buyback" or a replacement vehicle.
What is a Lemon Law Buyback?
A lemon law buyback means the manufacturer repurchases the defective vehicle from you. The buyback amount is typically calculated to put you back in the financial position you would have been in had you not purchased the defective vehicle. This usually includes the original purchase price (or lease payments made) minus a "reasonable allowance for use" of the vehicle, plus any collateral charges and incidental damages.
Components of the Buyback Calculation:
- Original Purchase Price: This is the full price you paid for the vehicle, including any down payment, trade-in allowance, and financed amount. For leased vehicles, it would be the total of lease payments made and any capitalized cost reduction.
-
Mileage at First Repair Attempt (Mileage Offset): This is a crucial factor. Most lemon laws allow the manufacturer to deduct a "reasonable allowance for use" of the vehicle. This allowance is typically calculated based on the mileage on the vehicle at the time of the *first* repair attempt for the defect that ultimately led to the lemon law claim. The formula often looks like this:
Mileage Offset = (Original Purchase Price × Mileage at First Repair Attempt) / Statutory Mileage DivisorThe "Statutory Mileage Divisor" varies by state but is commonly 120,000 miles or 100,000 miles. This calculator allows you to input the divisor relevant to your state.
-
Collateral Charges: These are additional costs directly related to the purchase or lease of the vehicle. They can include:
- Sales tax
- Registration fees
- License fees
- Non-refundable extended warranty costs
- Undercoating or other dealer-installed options
-
Incidental Damages: These are out-of-pocket expenses you incurred as a direct result of the vehicle's defect and repair attempts. Examples include:
- Towing charges
- Rental car expenses
- Repair costs you paid directly
- Lost wages due to repair visits
How the Calculator Works:
Our Lemon Law Buyback Calculator estimates the potential buyback amount by taking your original purchase price, subtracting the mileage offset (calculated using the mileage at the first repair attempt and a statutory divisor), and then adding back any eligible collateral charges and incidental damages.
Formula Used:
Estimated Buyback = Original Purchase Price - ((Original Purchase Price × Mileage at First Repair Attempt) / Statutory Mileage Divisor) + Collateral Charges + Incidental Damages
Example Calculation:
Let's say you purchased a car for $35,000. The first repair attempt for a significant defect occurred at 1,500 miles. You incurred $2,500 in collateral charges (tax, registration) and $300 in incidental damages (rental car). Your state's statutory mileage divisor is 120,000.
- Original Purchase Price: $35,000
- Mileage at First Repair Attempt: 1,500 miles
- Collateral Charges: $2,500
- Incidental Damages: $300
- Statutory Mileage Divisor: 120,000
Mileage Offset: ($35,000 * 1,500) / 120,000 = $437.50
Estimated Buyback: $35,000 – $437.50 + $2,500 + $300 = $37,362.50
Important Considerations:
- State Laws Vary: Lemon laws are state-specific. The exact calculation methods, eligibility criteria, and statutory mileage divisors can differ significantly. This calculator provides a general estimate; always consult with a qualified lemon law attorney in your state for precise advice.
- Documentation is Key: Keep meticulous records of all purchase documents, repair orders, communication with the dealer and manufacturer, and receipts for any incidental expenses.
- Negotiation: The final buyback amount can sometimes be subject to negotiation, especially regarding what constitutes "reasonable" incidental damages or collateral charges.
This calculator is a tool to help you understand the potential financial implications of a lemon law buyback. It is not legal advice.