How is a lemon law buyback calculated?
A buyback refunds the vehicle purchase price plus taxes, registration, and finance charges, minus a mileage offset for the use you got before the first repair attempt. The common formula is: price x (miles at first repair attempt / 120,000). You also recover incidental costs like towing and rental cars. The manufacturer usually pays your attorney fees.
When does a car qualify as a lemon?
Most state lemon laws create a presumption that a vehicle is a lemon if, within the warranty period (often the first 12-24 months or 12,000-24,000 miles), the same substantial defect was subject to 3-4 repair attempts, or the vehicle was out of service for 30 or more cumulative days. A single serious safety defect may qualify with fewer attempts.
What is the Magnuson-Moss Warranty Act?
The Magnuson-Moss Warranty Act is the federal law governing consumer product warranties. It lets you sue for breach of written or implied warranty on vehicles and other goods, and it shifts your attorney fees to the manufacturer if you win. It works alongside state lemon laws and can cover used cars and products that state lemon laws exclude.
Should I take a buyback or a replacement vehicle?
Most lemon laws let you choose a refund (buyback) or a comparable replacement vehicle. A buyback gives you cash and freedom to buy elsewhere; a replacement avoids re-shopping but ties you to the same manufacturer. Both are reduced by the same mileage offset. Compare the net refund figure against current replacement prices before deciding.