Can I Trade in My Lemon?

Can I Trade in My Lemon?

• October 31, 2024
• Categories: Lemon Law Lemon Law FAQs

Getting stuck with a car or truck that spends more time in the repair shop than out on the road can be a frustrating experience, especially if you recently purchased your vehicle from a dealership in the last couple of months or years.  So, you may be asking, “Can I trade in my lemon?”  The good news is that you may have a remedy – and access to a refund or replacement vehicle – under California’s consumer-friendly lemon law.  It’s not referred to as a “trade in,” but instead is called a “buyback” or a “replacement.”

Understanding California Lemon Law Buybacks

A buyback is one of two (and sometimes three) legal remedies you can choose from if your lemon law claim is successful.  A lemon law attorney at Neale & Fhima can explain your legal choices and help you pick the option that best suits your unique situation. Legal remedies include:

• Buyback
  Sometimes called a “repurchase,” the manufacturer will take possession of your defective car, truck, or SUV and issue you a refund of the purchase price. The price will be reduced by a mileage formula to account for your use prior to the first repair attempt. If you financed the vehicle, the manufacturer refunds the down payment, taxes, registration fees, and monthly payments you’ve made up to this point. The manufacturer will also pay off the auto loan, if there is one, by sending a check directly to the lending institution.
• Replacement
  The manufacturer will take possession of your defective vehicle and give you a replacement car, truck, or SUV of similar make and model. The manufacturer will pay the registration and taxes on the replacement vehicle.
• “Cash and Keep”
  In certain circumstances, Neale & Fhima can negotiate a “cash and keep” option. This allows you to keep your current vehicle and receive a cash payment to compensate for the defect.

You Could Get Full Value for Your Lemon Under California Law

When it comes to pursuing a claim under California lemon law, you could get full value for your lemon, less the cost of your use of the vehicle based on mileage.  California lemon law, known as the Song-Beverly Consumer Warranty Act, is codified at Civ. Code, § 1793.2 et seq.

Under the lemon law buyback formula, a dealership must refund your down payment, license and registration fees, sales tax, and monthly car payments to date. If the license, sales tax, or registration fees were prorated into your monthly vehicle payments, then you’ll be reimbursed only for what you’ve paid so far.  The dealership must also reimburse you for any expenses you incurred while your car was in the shop, like the cost of tow truck fees, rental cars, Uber and taxi fares, and other expenses. The dealership is also required to cover any finance charges, prepayment penalties, or termination charges you incurred or will incur when selling the car back to the manufacturer.  However, the dealership is not required to reimburse you for optional upgrades like aftermarket parts and enhancements.

When calculating the buyback, the dealership is legally allowed to deduct your use of the vehicle to date (based on mileage), using a special lemon law buyback formula. To determine the mileage offset, the dealer will multiply the miles the car had on it when you first presented it for repair by the cash price you paid, then divide this figure by 120,000 (a representation of the mileage life of a car). For example, if you paid $30,000 for the car and drove 10,000 miles before you brought the car in for the first repair, the lemon law buyback formula would be:

$30,000 X 10,000 / 120,000 = $2,500.

In this case, a $30,000 car driven 10,000 miles before the first repair attempt for a defect would result in a $27,500 credit to the owner during a buyback.

If you plan to pursue a lemon law claim, confirm the vehicle mileage figure used by the dealership, because some dealers will try to use a later mileage for their calculations, rather than the mileage from your first repair visit for the defect. A mileage deduction error will skew and reduce the amount of money you receive as part of the buyback.

Lemon Law Statute of Limitations

The statute of limitations for filing a lemon law claim in California is 4 years from the date a consumer knew or should have known that the vehicle was a lemon. This does not mean, though, that if you have owned or leased your vehicle for more than 4 years, you cannot bring a lemon law claim. Our skilled lawyers at Neale & Fhima have successfully “lemoned” vehicles that are more than 10 years old. If you have purchased or leased a lemon, you’ll want to start the buyback process as soon as possible. After the statute of limitations runs out, a judge may dismiss your case, barring you from a legal remedy. Don’t hesitate to contact our legal team if you have questions about how the statute of limitations works. Collect copies of your work orders, repair bills, and payment receipts and call our experienced lemon law attorney today.

A California Lemon Lawyer Can Help You Get Full Value for Your Lemon

At Neale & Fhima, we have decades of experience successfully handling lemon law cases for our clients.  Our attorneys are tough negotiators, and we don’t back down.  Keep in mind, also, that California lemon law not only covers cars and trucks, but it also applies to electric vehicles, some used cars, motorcycles, boats, RVs and other vehicles.  We handle those lemon law cases, too!  We will never be intimidated by aggressive manufacturers and their large teams of lawyers who try to deny lemon law claims.  We’ll go toe-to-toe with opponents, and we know how to win.  For a free consultation, call us at 949-661-1007.

Attorney Aaron Fhima

Attorney Aaron Fhima is a trial attorney who has secured numerous settlements and verdicts against large corporations and some of the largest auto manufacturers in the world. Representing consumers and injury victims throughout the state of California, Aaron’s practice areas include personal injury, and lemon law litigation. Aaron has a long record of success taking on large defense firms; and he doesn’t hesitate to take cases to trial when necessary to enforce his clients’ rights.