Understanding the Lemon Law Buyback Process

Learn how to request a refund or replacement vehicle when you buy a lemon.

Michelle Black | 

Sep 21, 2022 | 4 min read

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The term "lemon" describes a vehicle that you discover has serious defects or safety issues after you buy it. Depending on the severity of the vehicle's issues, you might even find yourself making payments on a car you're unable to drive.

In most states, lemon laws are in place to protect car buyers from these situations. The guide below breaks down how the lemon law buyback process works and how these laws might protect you if you purchase a malfunctioning vehicle.

Determining Whether Your Car is a Lemon

The process for filing a lemon law complaint can vary from one state to another. Depending on your state's laws, your vehicle might qualify as a lemon if it meets the following possible criteria:

• Several repair attempts haven't fixed the vehicle's defect
• The defect is substantial or presents a serious safety concern
• The car satisfies the state's mileage or time-since-purchase limits
• You didn't cause the defects to the vehicle yourself

Some states may require a car—and its defect—to be covered by a warranty before you're eligible for lemon law protections. Your vehicle also may need to be new, though some states, such as California, may provide consumer protections for the purchase of defective or unsafe used vehicles as well.

Furthermore, some vehicles might not qualify for reimbursement or replacement in your state. For example, Connecticut lemon laws cover motorcycles as well as other motor vehicles, but other states might not include motorcycles in their lemon law protections.

Filing a Lemon Law Complaint

Just as the laws of each state may vary, the lemon law complaint-filing process will likely be somewhat different as well. Below is a look at the general process you might have to go through to request reimbursement or replacement of a defective vehicle.

Review your eligibility. Find out the specific lemon law rules that apply in your state. In Georgia, for example, you must have purchased the defective new vehicle in the state, taken it to an authorized dealer or repair facility for repairs, and met several other eligibility requirements before lemon law protections would apply. You may want to consult with an attorney for guidance. You can also reach out to your state attorney general or consumer protection office to gather information.

Request reimbursement or replacement. If you believe you qualify for help under your state's lemon laws, you may want to reach out to the dealer or manufacturer. Consider speaking with a dealership's general manager (or mailing a certified letter to their attention) to explain the situation and why you believe you qualify for reimbursement or replacement of the faulty vehicle you purchased. Note that lemon law buyback calculations can also vary by state and may include some consideration of factors like the down payment you made, previous lease or loan payments, and service-related charges.

Ask for help. Should the dealer or manufacturer refuse to help you, it might be worth talking to an attorney about other potential remedies like arbitration or a lawsuit. The Better Business Bureau also has a dispute resolution program known as "BBB Auto Line" that might be able to assist you. You can also file a complaint with the Federal Trade Commission or your state attorney general if you feel like a dealer committed fraud.

What the Lemon Law Buyback Process Looks Like

The actual lemon law buyback process can vary from state to state. So you may want to consider speaking to an attorney who specializes in lemon laws for advice about your specific situation.

If your vehicle has a defect that cannot be repaired, your state may allow a manufacturer to replace the vehicle or offer you a refund. In South Carolina, for example, here's what the lemon law buyback process may look like if a manufacturer opts to give a consumer a refund.

Calculate the original purchase price of the vehicle (sales price, taxes, finance charges, registration fees, etc.).

Deduct a "reasonable allowance" from the purchase price for the mileage the consumer used the vehicle before it needed the first repair.

Of course, any outstanding auto loan balance would need to be paid off with the funds you receive during the lemon law buyback process. But any leftover funds should be yours to keep (potentially minus attorney's fees, if applicable).

Avoiding Lemons in the Future

Buying a vehicle that turns out to be a lemon can be a frustrating and expensive experience, and the lemon law buyback process can be difficult and stressful to navigate. It doesn't matter how much money you save in price negotiations if you drive off the lot in an unreliable vehicle. Therefore, it's critical to do everything in your power to try to avoid buying a lemon in the first place.

If you're buying a used car, it may be even more important to complete a thorough examination before closing the deal. Reviewing a vehicle history report might also help you spot red flags and perhaps avoid serious vehicle problems after the purchase.

Michelle Black

Michelle Lambright Black is a leading credit expert with nearly two decades of experience in the credit industry. She's an expert on credit reporting, credit scoring, identity theft, and the intersection of credit and financing. Michelle is also an experienced personal finance and travel writer, with thousands of articles featured in major outlets throughout the U.S.