Quick answer
In a lemon law buyback, the manufacturer refunds what you paid for the car (including taxes and fees, and paying off the loan), minus a mileage offset for the miles you drove before the first repair for the problem. You return the car. The manufacturer also pays incidental costs, and if you win in court, your attorney's fees.
Key takeaways
- You choose between a refund (buyback) or a replacement vehicle. The manufacturer can't force a replacement on you.
- The refund covers the actual price paid, plus collateral charges like sales tax, license, and registration fees.
- A mileage offset is subtracted based on miles driven before the first repair attempt for the defect.
- Incidental damages such as towing and rental cars can be added.
- If the manufacturer willfully refused, a court can add a civil penalty of up to two times your damages.
Refund or replacement: it's your choice
When a new vehicle qualifies under the Song-Beverly Act, the manufacturer must either replace it or make restitution. The law lets the buyer choose; the buyer is free to elect restitution instead of a replacement (Civil Code § 1793.2(d)(2)).
What the refund includes
- The actual price paid or payable for the vehicle, including charges for manufacturer-installed options.
- Collateral charges such as sales or use tax, license fees, and registration fees.
- Incidental damages, including reasonable repair, towing, and rental car costs you actually paid.
- Payoff of the remaining loan balance, so the lender is paid directly and you're refunded what you paid.
How the mileage offset is calculated
The manufacturer may subtract an amount for your use of the car before the problem first showed up. The formula is: miles driven before you first delivered the car for repair of the problem, divided by 120,000, multiplied by the price you paid (Civil Code § 1793.2(d)(2)(C)).
Example: if you paid $40,000 and first brought the car in for the defect at 6,000 miles, the offset is 6,000 ÷ 120,000 × $40,000 = $2,000.
Penalties and attorney's fees
If a manufacturer willfully fails to meet its obligations, a court can award a civil penalty of up to two times the buyer's actual damages (Civil Code § 1794(c)). A buyer who wins is also entitled to attorney's fees and costs (Civil Code § 1794(d)), which is why lemon law attorneys commonly work without upfront fees.
What happens to the car
You return the vehicle. California requires manufacturers that reacquire a lemon to retitle it with a "Lemon Law Buyback" notation and disclose the problem to the next buyer, so the defect isn't passed on silently.
What to do next
- Gather your purchase contract, financing documents, and every repair order.
- Note the mileage on the first repair order for the problem. That number drives the offset.
- Keep receipts for towing, rentals, and any repairs you paid for.
- Request a free case review before accepting a manufacturer's offer.
Frequently asked questions
Sources
- California Civil Code § 1793.2 (Song-Beverly Consumer Warranty Act)
- California Civil Code § 1794 (damages, civil penalty, attorney's fees)
- California Department of Consumer Affairs: Arbitration Certification Program (lemon law)
This website provides general information, not legal advice. Laws change and every situation is different. Talk to a licensed attorney in your state about your specific facts.
More on this topic: California lemon law overview