How Is Mileage Offset Calculated in Lemon Law?

California’s Lemon Law requires manufacturers to buy back defective motor vehicles, or lemons. A vehicle typically qualifies as a lemon when it has significant defects covered by the manufacturer’s original warranty that the manufacturer has failed to repair after repeated attempts.

If you own or lease a lemon, The Barry Law Firm can help you pursue a Lemon Law claim to have the manufacturer repay your purchase price plus other costs associated with the defective vehicle. However, while a Lemon Law claim can recoup your losses, your final settlement may be impacted by a mileage offset. This is a credit the manufacturer is allowed for your use of the vehicle before it needed repairs.

As your Lemon Law attorneys, The Barry Law Firm can do the work necessary to help you pursue the money you’ve spent toward buying or leasing a lemon. We can explain how to calculate a Lemon Law buyback, the California Lemon Law buyback formula, and the Lemon Law mileage deduction. All attorneys’ fees and costs of successful Lemon Law claims are paid by the vehicle manufacturer, not the consumer. And you’ll never get a bill from us, no matter the outcome.

Our firm has focused exclusively on Lemon Law cases since 2010, helping thousands of Californians recover their costs and be rid of faulty motor vehicles. Contact us today for a fast and free consultation to learn more.

A Guide to Understanding California’s Lemon Mileage Offset

Under California’s Lemon Law, if a car’s manufacturer cannot resolve a substantial defect that is covered by the manufacturer’s original warranty after a reasonable number of repair attempts, the vehicle is considered a lemon. The owner or lessee has the right to demand that the manufacturer buy the vehicle back.

A buyback settlement may include:

• The price paid by the buyer to purchase the vehicle, including the down payment, monthly payments made, and the remaining payoff balance of a car loan
• Collateral costs, such as sales or use tax, license fees, registration fees, and other official fees
• Incidental costs of the vehicle’s failure, including reasonable towing, alternative transportation, and repair costs
• Attorneys’ fees and court costs

However, the state’s Lemon Law allows vehicle manufacturers to reduce their buyback payments by a certain amount. This reduction accounts for the buyer’s use of the vehicle before they first took it to the manufacturer (usually through an authorized dealership or service center) to fix the covered problem. The statute outlines the California Lemon Law buyback formula for calculating this amount, also known as the “mileage offset” or “usage fee.”

When Does the Offset Apply?

The Lemon Law mileage deduction applies once the manufacturer agrees to a settlement or a court orders payment. At that point, California’s Lemon Law allows manufacturers to adjust the refund value based on the number of miles put on the vehicle before their first failed repair attempt.

What Is the California Lemon Law Mileage Offset Calculation?

The mileage offset applied to a Lemon Law buyback is determined by dividing the vehicle’s mileage before the first repair attempt by 120,000 and multiplying it by the actual purchase price, including charges for transportation and manufacturer-installed options. The law says that 120,000 miles is the expected mileage life of a late-model motor vehicle.

Under California’s Lemon Law, the mileage offset formula looks like:

• 15,000 (miles) / 120,000 X $60,000 (vehicle cost)
• 15,000 / 120,000 = 0.125
• $60,000 X 0.125 = $7,500 mileage offset
• $60,000 cost – $7,500 offset = $52,500

The buyback payment in this example would be $52,500. But the statute specifically states that restitution also includes any collateral charges and incidental damages incurred by the buyer. A defective car owner’s refundable losses do not include the cost of any non-manufacturer parts or modifications, though. Our team at The Barry Law Firm will help you determine the mileage offset during your free consultation.

Are There Mileage Limits?

There is no set mileage limit for a vehicle to qualify as a lemon under California’s Lemon Law. Instead, the problem must have started while the manufacturer’s original vehicle warranty was valid.

The law’s qualifications for a lemon also refer to a reasonable number of unsuccessful repair attempts to qualify for protection. A reasonable number of attempts varies from case to case, but it may involve:

• Two or more repair attempts for an issue posing a serious safety risk
• More than two attempts for less severe problems
• A car out of service for an inordinate amount of time, in certain cases

How Do I Calculate the Rest of My Refund?

Documentation is key to calculating your potential buyback payment for a successful California Lemon Law claim. Along with what you’ve spent to purchase or lease the vehicle, you may also be owed a refund on out-of-pocket expenses associated with the lemon. You should compile records of the money you have spent because your vehicle is defective. This would include receipts, invoices, and bank or credit card records of expenses such as:

• Towing your car
• Repairs you paid for
• Tools or supplies for repairs you’ve attempted on your own
• Rental car fees
• Public or hired transportation
• Sales or use taxes, registration fees, and other official fees

Once you have determined your expenses, you can use our Lemon Law buyback calculator to get an estimate for how much you might be owed. However, each case is unique, and no specific refund amount or results can be guaranteed. A California Lemon Law attorney at The Barry Law Firm will help you identify recoverable costs and assemble the documents required to file a Lemon Law claim for the maximum compensation available to you.

Can a Lemon Law Attorney Help Me Understand Mileage Offset?

Yes! An attorney at The Barry Law Firm can provide experienced help with the California Lemon Law’s buyback formula and mileage deduction. You must demonstrate the costs and losses that you are eligible to recover in a faulty vehicle claim. We can help you organize documents, accurately calculate what you are owed, and aggressively press your claim to seek the maximum settlement for you.

Reach out now at 877-LEMON-03 or contact us online for a FAST & FREE consultation about how The Barry Law Firm can help you.