If your vehicle has ongoing defects and you’ve opened a California lemon law claim, you may expect a refund or replacement. But sometimes, manufacturers push back by offering a trade-in instead of a complete buyback or replacement vehicle. While this might sound like a fair compromise, it often falls short of what you’re legally entitled to under California’s Song-Beverly Consumer Warranty Act, also known as the California Lemon Law.
At Shainfeld Law, our Los Angeles lemon law attorneys help clients understand their rights and evaluate whether a manufacturer’s trade-in offer truly satisfies the law or is simply an attempt to limit liability. Before you agree to anything, it’s essential to understand what you may be giving up.
What Does California’s Lemon Law Require?
Under the Song-Beverly Act, if your vehicle qualifies as a lemon, the manufacturer must either:
- Replace the vehicle with a substantially identical one, or
- repurchase it by refunding the purchase price (including taxes, fees, and certain incidental costs) minus a small deduction for mileage before the defect appeared.
This law ensures that consumers are not stuck with a defective vehicle or forced into an unfair settlement. However, manufacturers sometimes propose a trade-in, allowing you to apply the current value of the defective car toward a new purchase. That may seem appealing, but it is not equivalent to a complete legal buyback.
Why a Trade-In May Not Be Enough
A trade-in often benefits the manufacturer or dealership far more than the consumer.
Here’s why:
- You may receive less than you paid for the vehicle, especially if it’s depreciated significantly.
- No reimbursement for incidental costs like rental cars, towing, or repairs may be included.
- You may again pay taxes, fees, and down payments on the new vehicle.
- You’re not made whole, which is the point of lemon law protections.
Unless the trade-in is structured to provide the same or greater value than a complete buyback, it likely does not meet the legal standard set by California law.
When Is a Trade-In Acceptable?
There are rare instances where a trade-in offer may be reasonable, for example:
- You were planning to purchase a different vehicle anyway, and the terms are comparable to a legal replacement.
- The manufacturer offers generous incentives, rebates, or upgrades exceeding your out-of-pocket losses.
- The trade-in is accompanied by written terms that match or exceed what you’d receive through a buyback or court-ordered remedy.
Even then, it is essential to review the complete terms in writing and consult with a lemon law attorney before accepting.
Let Shainfeld Law Evaluate the Offer Before You Sign
At Shainfeld Law, we’ve seen manufacturers offer trade-ins that fall far short of what clients are legally owed. Don’t let pressure or paperwork push you into a one-sided deal. Our team will review the offer, compare it to your potential lemon law recovery, and fight to ensure you receive the maximum value and complete protection the law provides.
Contact our experienced Los Angeles lemon law attorney today by calling 888-609-2593 or requesting a free consultation online before accepting a trade-in. We’ll explain your rights and help you make a decision that protects your investment and your future.