When a vehicle qualifies as a lemon in California, one of the most common remedies is a manufacturer repurchase, also known as a buyback. While many consumers understand that this means the manufacturer must take the vehicle back and issue a refund, far fewer understand how that refund is calculated or what must legally be included.
California Civil Code 1793.2 sets particular requirements for what manufacturers owe when a buyback occurs. These calculations matter because even minor errors can result in thousands of dollars in lost compensation.
Understanding how the repurchase formula works helps vehicle owners evaluate settlement offers and recognize when a manufacturer is undervaluing a claim.
What California Law Requires in a Lemon Law Buyback
A manufacturer’s repurchase is not a goodwill gesture. It is a statutory obligation once the vehicle meets the criteria for the lemon law. The law requires the manufacturer to reimburse the consumer for the full financial impact of the defective vehicle, subject only to a limited mileage offset.
A proper buyback must include reimbursement for the following categories:
- The vehicle’s purchase price or lease payments.
- Sales tax, registration fees, and official government charges.
- Down payments and finance charges paid.
- Incidental expenses related to the defect, such as towing or rental costs.
Manufacturers are not permitted to exclude these items simply because they were paid at different times or through other channels.
The Mileage Offset Explained
The primary deduction allowed in a lemon law buyback is the mileage offset, also known as the usage deduction. This amount represents the consumer’s use of the vehicle before the defect was first reported.
The calculation is based on:
- The vehicle’s purchase price.
- The mileage at the first repair attempt for the defect.
- A statutory divisor set by California law.
The formula is:
Purchase Price × (Mileage at First Repair ÷ 120,000)
This deduction is often far smaller than consumers expect, especially when the defect appears early in the vehicle’s life.
Common Errors in Manufacturer Repurchase Offers
Manufacturers frequently present buyback calculations that appear complete but fail to comply with the statute. These errors can significantly reduce the refund amount.
Common problems include:
- Excluding sales tax or registration fees.
- Failing to reimburse incidental costs.
- Applying an inflated mileage offset.
- Using the wrong purchase price figure.
- Omitting finance charges or lease payments.
- Attempting to deduct items not permitted by law.
These miscalculations are not minor technicalities. They directly affect the consumer’s recovery.
Lease vs. Purchase Buyback Calculations
Repurchase calculations differ slightly depending on whether the vehicle was purchased or leased. However, both transactions are protected under California’s Lemon Law.
In lease situations, the manufacturer must still reimburse:
- All amounts paid by the lessee.
- Any down payment or capitalized cost reduction.
- Monthly payments made before the repurchase.
- Applicable taxes and official fees.
The consumer’s financial position should be restored as if the defective vehicle had never been placed into service.
Incidental and Consequential Damages
California Civil Code 1793.2 also requires reimbursement for certain additional losses caused by the defect. These are often overlooked but can be substantial.
Recoverable expenses may include:
- Towing charges.
- Rental vehicle costs.
- Transportation expenses related to repairs.
- Diagnostic fees.
- Other reasonable out-of-pocket costs tied to the defect.
Proper documentation of these expenses strengthens the overall claim value.
Why Accurate Calculations Matter
A lemon law repurchase is intended to make the consumer whole. An incorrect calculation undermines that purpose and allows the manufacturer to shift financial loss onto the vehicle owner.
Because lemon law cases often resolve through settlement rather than trial, the repurchase figures become the core of the negotiation. Understanding what the law requires ensures that consumers do not accept undervalued offers based on incomplete or improper math.
Speak With Our Skilled California Lemon Law Attorney
If your vehicle qualifies for a Lemon Law buyback, the calculation of your refund is just as crucial as establishing liability.
Shainfeld Law represents California consumers in Lemon Law matters involving complex repurchase and settlement issues. Our attorney reviews manufacturer calculations, identifies statutory violations, and pursues full financial recovery.
Call 888-609-2593 today or contact us online for a free consultation with our Los Angeles lemon law attorney. An accurate repurchase calculation ensures you receive the compensation the law requires.