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We handle cases across the United States. Allen Stewart is licensed to practice law in Texas, California, New York, Pennsylvania, Missouri, North Carolina, Ohio and Arizona.

How Lemon Law Buybacks are Calculated

lemon law buyback calculation

Vehicle owners dealing with a lemon vehicle are swamped with things to consider. You have to keep track of how long you’ve kept the vehicle, how many times you’ve taken it in to attempt the same repair – with no success, when you reached out to let the manufacturer know you were dealing with a vehicle you consider a lemon and their response (or lack of one).

On top of that, you will be concerned about what reimbursement you might receive if the vehicle is found to be a lemon under the Texas lemon law and the option to repurchase the vehicle is found to be best in your situation.

There are a variety of factors that are weighed to determine the amount the manufacturer should pay you to repurchase your vehicle. It also depends on whether you were purchasing or leasing the vehicle in question.

If you were purchasing the vehicle, the following are factors in the reimbursement total: your down payment, the amount of each monthly payments and the number of payments that have been made to date, the fees and any financing and service contracts involved during the purchase of the vehicle, as well as the amount owed on the loan for the vehicle.

The above factors are weighed in the case of a lease agreement as well, with the exception that the remaining lease obligations are the amount paid off – rather than any balance on a loan.

There are online lemon law buyback calculators that can be used to determine the potential amount you can receive if your vehicle has been determined as covered under the lemon law and the outcome will be repurchase of the vehicle.

The miles driven before the vehicle was first taken to a mechanic to fix the problem will be factored in, along with the various amounts mentioned above. The estimated usage fee will be considered in the calculations to determine the amount you will be paid to repurchase the vehicle as well.

For a vehicle owner who has been plagued by a lemon vehicle, this is the home stretch toward resolution. The amount you will be repaid is typically a welcome amount, even if it will not include compensation for any aftermarket parts installed, for the days when the vehicle was not drivable and nothing will exchange hands to cover the stress and strain of attempting to maintain daily life while unable to rely on the vehicle you purchased.

manufacturer buyback or lemon reported

However, before it gets to this point, there are many factors that weigh into the determination that the vehicle is considered a lemon as set by the Texas lemon law.

When a new vehicle shows signs of defect, it can be a minor frustration. However, it is wise to be prepared for the worst. At the first sign of a vehicle defect in a new vehicle, it is smart to start taking careful documentation. As mentioned above, if you are reimbursed for the vehicle at a future point, the number of miles you were able to drive the vehicle before taking it to the mechanic for a primary attempt at repair are factored into the dollar amount you will receive. You should keep detailed notes of all repair attempts made complete with dates and work done.

First, note the mileage when you notice the vehicle is not acting as expected. Note the date and how long you have been in possession of the vehicle. From there, it is wise to keep track of all conversations with the mechanic, the date you take it in for a repair and the mileage when you drop the vehicle off.

Remember that a lemon vehicle is one that is new or used and covered by manufacturer’s warranties. That means it must show the defect in the first 24 months or 24,000 miles it has been driven.

Also, the vehicle defect must be reported to the manufacturer before the 30-month mark or before six months after the vehicle has been driven 24,000 miles, whichever happens first.

The vehicle also has to have undergone four or more attempts to fix the same defect, and those attempts must be reported to the manufacturer so they can also make “a reasonable number” of attempts to resolve the defect as well.

This test for the defect is important. Therefore, when explaining the issue to the mechanic, make sure to use the same description. There are various fixes the mechanic may attempt to resolve the issue, but it is key that you can present the issue the same way when you deliver the vehicle to a mechanic for a repair attempt. That way, the vehicle is clearly covered as a lemon law vehicle.

It is also important to keep all documentation of these repair attempts. Service reports should state that you brought the vehicle in for (specific defect) and the mechanic attempted to repair it – even if there was no work done. If the mechanic cannot replicate the defect in order to try to resolve it, that visit is still considered an attempt to fix said defect. It just needs to be documented via service report that you were there with the vehicle and the defect existed at that time.

It is also important to understand that the defect must put the driver and passengers at risk when traveling. Cosmetic issues or those that impact comfort but not safety are not covered under the lemon law in Texas. Therefore, it is wise to understand the limitations of the law and know that the defect in question is one that puts the driver (and others on the road) at risk when the vehicle is driven.

There is another test for lemons under the Texas Lemon Law. That test is whether the vehicle has had to sit idle for 30 days or more of the owner’s possession of the vehicle. This must occur with no loaner vehicle provided by a dealership or auto shop. Meanwhile, this period does not have to be consecutive days. Instead, this is another area where documentation is important. Make sure to write down any days you were forced to leave the vehicle idle and find other transportation to complete errands or successfully travel to and from work.

When a vehicle fits the above criteria, it is considered a lemon under Texas Lemon Law and the potential resolution to the issue can take shape in three forms: repurchase of the vehicle (as discussed above), repair or replacement. In the case of repair, the defect is addressed again by competent and certified mechanics. In the case of replacement, a vehicle of comparable, age, mileage and value is found by the manufacturer and traded to the vehicle owner for the defective vehicle.

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