What Is a Lemon Law Buyback?
Lemon Law Buybacks are designed to compensate consumers who have been sold a defective vehicle. In simple terms, a Lemon Law Buyback means that, once a vehicle has qualified as a lemon, the manufacturer or dealer will refund to you the purchase price of the vehicle, the sales tax, tag, title, and registration fees, any incidental costs, and will pay off any outstanding loans on the vehicle. The purpose of a Lemon Law Buyback is to give you your money back, so that you can buy a new vehicle that hopefully will not be defective. Or, in some cases, it will allow you to cancel any open contracts for a used vehicle and get your money back for an older vehicle.
A Lemon Law Buyback is typically issued by the manufacturer or dealer once the vehicle has been determined to be a lemon, through either an arbitration award or a court judgment. In my opinion , it is preferable to take your case to Court, so that the manufacturer or dealer will be ordered to issue a Lemon Law Buyback as part of a court judgment. I have seen too many arbitrators issue awards that sent consumers checks for $15,000 even though they had purchased brand new vehicles for upwards of $40,000. Simply put, I believe that if the vehicle is a lemon, the manufacturer or dealer should have to repay you the entire amount that you paid for the vehicle when you bought it. That is also the remedy that I have seen Courts order most often, although I have seen some orders that only pay back the consumer what the vehicle was worth at the time of trial (which is usually a much lesser amount that was originally paid). Nevertheless, in either event, the goal here is to give the consumer his or her money back for a defective vehicle that could not be fixed.
What Influences How Long a Buyback Takes
A variety of factors can influence the duration of a lemon law buyback. Much of it has to do with the laws in a particular state, as well as with how the manufacturer responds to a complaint. In some states against manufacturers that are non-responsive, it is possible to obtain a buyback without any further negotiations or mediation, and without ever having to step foot into the courtroom.
It is possible for a lemon law attorney to file a lawsuit, and potentially have the case resolved in one day. Not all manufacturers are this easy to work with, however, and others may delay progress in order to try and wear a consumer down.
Most cases involve much negotiation between car owners and the manufacturer, with the help of a lemon law lawyer. This could be expedited if the car owner has a list of all warranty repairs completed on the vehicle, and can provide documentation to support the facts of the case. Some lemons are less conspicuous because the problems are intermittent or sporadic, therefore leading to more back and forth between the car owner and the dealership.
During the lemon law buyback process, manufacturers have a legal obligation to establish a reasonable offer to buy back the vehicle. If they continue to make unreasonable offers, consumers may have to file a lawsuit to get a fair settlement. This can become a longer process, depending on how well the manufacturer handles the case.
If a lawsuit is filed, some manufacturers are able to resolve the matter relatively quickly after initial discovery and possibly a motion hearing, along with other litigation procedures. Others refuse to consider the case, and push it into litigation. This will entirely depend on the response from the manufacturer. In some situations, a manufacturer may agree to pursue arbitration, and not even go to court.
If the case goes to trial, a lemon law attorney should be able to settle it in one day. This of course depends on the circumstances of the case, including whether or not the manufacturer refuses to settle, and the facts of the vehicle problem, meaning how much evidence needs to be brought into the courtroom. Other times, arbitration may be ordered instead, which also carries its own timeline.
Some lemon law cases may be able to be settled outside of arbitration or litigation altogether, based on the specific situation. A number of different factors go into determining how long a lemon law buyback will take, including the options for resolution, the state laws, and how willing each side is to negotiate terms.
Typical Schedule for a Buyback Process
The lemon law buyback process can generally be broken down into the following five steps:
- The complaint is filed with the manufacturer;
- The manufacturer acknowledges the complaint;
- The manufacturer makes an offer to repurchase, or "buyback," the vehicle;
- The offer is accepted by the consumer; and
- The demand for payment is made to the manufacturer on the consumer’s behalf.
Most of the time, once a car has been successfully set up for buyback, the entire process from start to finish, including settlement reach, takes anywhere from six months to one year, sometimes a month more or less depending on the particulars of each case. Overall, the initial filing to manufacturer buyback agreement is usually completed in three months or less, then an additional three months will usually pass while the actual payment is made to the consumer.
State-Bys-State Lengths
Many states have their own particular lemon law statutes and an understanding of how those laws apply in your case is crucial. For example, in most states, a vehicle may be repurchased with a rental vehicle – but in California, only a replacement vehicle is allowed when the manufacturer buys a car back. Similarly, in some states when a business is the purchaser of the car (because the car is primarily used for business) an allowable purchase price cap will be applied. In other states, like California and Florida, there is no such cap.
The amount of damage a manufacturer or dealer pays for the lemon law buyback also varies by state . There are two categories of damages that exist in lemon law buyback claims: economic and non-economic damages. In general, economic damages are repaid in full on the purchase price and out of pocket costs the "consumer" incurred. As non-economic damages exist in every state lemon law but are not commonly paid by all manufacturers – it is important this section be understood in your claim logs and file.
There are many more such examples of state-by-state lemon law buyback variations and there are a few not as favorable as others. When hiring a lemon law attorney, the ability to recognize these important variations is important to maximize your lemon law buyback recovery.
How to Make a Buyback Happen Faster
- Don’t delay in contacting an attorney. The sooner you put the proper individuals on notice of your situation, the better. Buying time is almost never a good idea when it comes to a lemon law buyback. Although California law provides for up to 18 months or 18,000 miles before a car qualifies for a buyback, most manufacturers do not wait that long. Placing the appropriate parties on notice of your claim early on may expedite your buyback.
- Provide a detailed account of all repairs. In addition to providing a general timeline of your repair history and the specific repairs that were performed, it is often helpful to make a brief summary chart. This simple list should include the date of each repair attempt, the reason for the breakdown, mileage at the time of breakdown, and repairs that were actually performed. On its face this sounds like quite a list so try to keep it as short as possible. However, if you believe you’ll be participating in a law suit down the line you’re going to want this information to chart onto one simple page.
- Contact the Service Manager. During the initial stage of your claim, when it is being reviewed by your manufacturer, you most likely will not be able to speak directly to the individual responsible for reviewing your claim. In that case, you can be transferred to your Service Manager or Customer Relations Manager. These individuals are often on a first name basis with the individuals assigned to review these claims. For example, if you call and speak to the Service Manager, he or she will be able to call the person with corporate who actually handles the claim. Even the manufacturer’s Customer Service Representatives, who are most often the first point of contact for a client, can call directly to the persons assigned to the case.
- Call Your Dealer’s Service Manager. Similarly, when an individual seeks a buyback under the law, they usually will not be able to speak to the Service Manager at the dealership. But if you were to speak with the Service Manager and he or she could pick up the phone and call your Service Manager at the manufacturer’s corporate office, chances are it will expedite the process. Again, this doesn’t happen in every situation. But by working together, your parties of interest may get you the approval you seek more quickly.
- Be persistent. And follow-up. If the manufacturer or dealer agrees to review your case quickly and provide you with an answer as soon as possible, be sure to follow-up several days later if you do not hear from them. Falling in the black hole of a telephone system can be frustrating. Most often, the best way to reach an individual who would have information about your case is by following up with an e-mail.
The Steps To Take If It’s Taking Too Long
If you are a lemon law claimant that has waited patiently for the manufacturer to formally offer to buyback your car, and more than 5 weeks has passed since your attorney sent the demand letter that was agreed upon with the manufacturer, then something has probably gone wrong. Even if you have not heard from the manufacturer regarding the paperwork, it likely is time for the lemon law claimant’s lemon law attorney to escalate the proceedings further against the manufacturer.
In particular, most clients do not know that each state has its own Better Business Bureau that is separate from the national Better Business Bureau (BBB) organization. The BBB’s primary functions are to help facilitate communication between consumers and businesses in order to resolve marketplace disputes amicably . The BBB can contact the manufacturer on your behalf and the BBB’s goal is for the manufacturer to respond to the complaint within 14 days. Experienced BBB staff members will communicate with both parties until the dispute is resolved or until further actionable steps cannot be taken. At this point, while BBB reproach can at times be effective, it is wise to have your lemon law attorney initiate a lawsuit against the manufacturer as well.
Expect more delay as the manufacturer and your lemon law attorney litigate the case. Unfortunately, this delay is common in lemon law buyback matters, especially since the Manufacturer’s attorney will likely attempt to pass the buck to the Dealership selling and servicing the vehicle. But make no mistake: the Manufacturer—not the Dealership—is ultimately responsible to all lemon law claimants for providing a qualified working vehicle or buying it back from the buyer.