"I recently hired Emma Robison to represent me with a New York State Lemon Law issue I had with my Jeep Cherokee. I feel so fortunate that I chose her. Not only was she impressively knowledgeable but unbelievably prompt about everything she did."
How a Lemon Car Buyback is Calculated
Each state has its own calculation for a repurchase under the lemon law, but the essential premise is that you are refunded all money put into the purchase or lease of your defective vehicle. This includes any down payment and the value of any vehicle traded in, so long as you did not owe more than the vehicle was worth at the time. If there was any negative equity when you traded in the vehicle, the manufacturer is not responsible for this amount.
The manufacturer is also permitted to take a mileage deduction for use of the vehicle. This deduction varies, but in Pennsylvania it is ten cents per mile up until the problem started. In New Jersey, it is the purchase price multiplied by the mileage the time the problem arose divided by 100,000. States may also take deductions for any finance charges or rental costs in the case of a lease. They can also deduct any sales tax, but there are forms you can fill out to have this money refunded by the state.
The cash compensation awarded can come in the form of the diminished value of the vehicle and/or any out-of-pocket costs for repairs or rental vehicles. The diminished value of the vehicle represents any loss in value at the date and time of purchase due to the defects.
When you receive a replacement or repurchase of your vehicle, you are essentially given all the monies put into the vehicle, back. This money is either given back in the form of a check, as in the award of a repurchase, or in the form of equity into your replacement vehicle. Each state has their own deductions that the manufacturer is permitted to take, like for mileage or rental fees in the case of a lease, but you essentially receive all cash back that you put into the vehicle.
What a Buyback Gets You
In the case of a lemon law award, there are two options for relief: either the repurchase or replacement of your vehicle.
A Replacement Vehicle
Under a replacement option, the consumer is to pick out another vehicle, by the same manufacturer, of equal or greater MSRP. It is important to note that the consumer is responsible for any different in MSRP, but the upside is that the payments and money put into the lemon vehicle transfer to the new vehicle.
A mileage deduction can also be taken in the case of a replacement and is the same as that under a repurchase. Once all the financials are sorted, a date is set up for the surrender of the lemon vehicle and the acquisition of the new car.
When a consumer receives a refund, they are given all the monies back they put into the vehicle minus some deductions.
As previously stated, these deductions vary from state to state, but they include any negative equity from a trade in, sales tax and mileage. A date of surrender is also set up in the case of a refund, and, at the time of surrender, you may receive your refund check.
Although, sometimes, the check is sent to the attorney for processing then out to the client.
Get a Free Case Evaluation With a Lemon Law Attorney
The finite details of the repurchase or replacement of your vehicle can be confusing, especially in the case of a complicated mileage deduction. To help guide you through this process and ensure you receive all the compensation you deserve, it is important to have an experienced lemon law attorney by your side.
Call for a free, no-obligation consultation to discuss your options and potential cash compensation with one of our attorneys today.