Buyback (Restitution) Under California Lemon Law

A buyback — formally called “restitution” under California Civil Code § 1793.2(d)(2)(B) — is the most common lemon-law remedy in California. The manufacturer pays you back what you’ve paid for the vehicle, with statutorily defined add-backs and a single deduction (the mileage offset), and you surrender the vehicle. Here’s exactly how the math works.

What the manufacturer must refund

Under § 1793.2(d)(2)(B), restitution includes:

1. The actual price paid for the vehicle, including the cash down payment and any trade-in allowance.
2. The cost of installed manufacturer or dealer options.
3. Collateral charges — sales tax, use tax, license fees, registration fees, and similar government charges.
4. Incidental damages — towing, rental cars, and similar expenses caused by the defect.
5. Consequential damages — lost wages, etc., when adequately proven.
6. The remaining loan balance is paid directly to the lender to extinguish the loan.

A concrete example

Assume you bought a $48,000 vehicle in March 2024 with:

• $5,000 cash down
• $4,000 tax + $400 registration
• $39,400 financed at 7%, paid for 14 months ($725/month)
• First major repair attempt at 4,000 miles in November 2024
• Current odometer at settlement (June 2026): 31,000 miles
• Rental car costs during repair visits: $1,800

Recovery breakdown:

Element	Amount
Down payment	$5,000
Tax	$4,000
Registration	$400
Monthly payments × 14	$10,150
Remaining loan payoff (paid to lender)	~$33,800
Rental car (incidental damages)	$1,800
Subtotal	$55,150
Less: mileage offset (4,000 ÷ 120,000 × $48,000)	–$1,600
Net buyback to buyer	$53,550
Plus: attorney fees paid by manufacturer	(separate, not deducted)

The buyer walks away with cash that covers a fresh vehicle purchase or whatever else they need. The vehicle goes back to the manufacturer through the dealer.

What the mileage offset is and isn’t

The mileage offset under § 1793.2(d)(2)(C) is calculated based on miles driven before the first repair attempt, not miles at the time of settlement. The formula is:

(miles driven before first repair attempt ÷ 120,000) × purchase price

In the example above, the buyer drove 4,000 miles before the first repair attempt, regardless of whether the odometer now reads 31,000. The offset is $1,600, not the $12,400 that a 31,000-mile offset would yield.

Manufacturers’ lawyers regularly try to apply the higher mileage. Read mileage-offset claims carefully and reference the specific date and mileage at first repair attempt.

What the manufacturer cannot deduct

A common manufacturer tactic is to claim “wear and tear” or “depreciation” deductions beyond the mileage offset. These are not allowed under Song-Beverly except in narrow circumstances (e.g., physical damage caused by an accident the buyer caused).

Specifically off-limits:

• General market depreciation
• Wear on tires, brakes, etc. from normal use
• “Diminished value” for cosmetic flaws unrelated to the defect
• Any deduction for the time the buyer used the vehicle while not in repair

The mechanics of receiving the buyback

When a buyback is finalized:

1. The settlement is documented in writing, signed by both sides.
2. The manufacturer issues a wire transfer to the buyer’s lender to pay off any remaining loan balance.
3. The manufacturer issues a separate wire transfer to the buyer for the cash portion (down payment, payments made, tax, etc.).
4. The buyer signs the vehicle title over to the manufacturer (typically through a participating dealer).
5. The dealer takes possession of the vehicle, often the same day the buyer signs.
6. The buyer’s loan is closed out.
7. Attorney fees are paid directly to the buyer’s counsel separately.

Total time from final settlement signature to wire transfer is usually 4–6 weeks. The buyer keeps and drives the vehicle until the surrender date — there is no requirement to “park” the vehicle while the buyback is pending.

Why buyback usually beats replacement

Replacement (a substantially identical new vehicle) is the alternative remedy, but most California buyers choose cash buyback because:

• A replacement still depreciates the moment you drive off the lot, recreating financial exposure.
• The “substantially identical” standard creates room for disagreement (color, trim, options).
• Cash gives the buyer flexibility — they can buy a different make, a used vehicle, or no vehicle at all.
• Buyback math is easier to verify than the value of a replacement vehicle.

When replacement makes sense is usually limited to: a vehicle the buyer specifically loves and wants again (just a defect-free copy), or a vehicle being purchased on a fleet/business basis where simplicity of substitution matters.

Bottom line

A clean buyback is the cleanest outcome of a California lemon-law case. The math is statutory, the deductions are limited, and the buyer is generally made whole. Combined with attorney-fee shifting that means the buyer doesn’t pay out of pocket for representation, it’s why the Song-Beverly Act is widely considered the strongest state-level lemon-law statute in the United States.

Related

Article

Attorney Fee-Shifting Under California § 1794(d)

Why a California lemon-law attorney costs you nothing out of pocket — the Song-Beverly Act's fee-shifting provision and how it makes contingency representation work.

Read → Article

Cash-and-Keep Settlements in California Lemon Law Cases

How cash-and-keep settlements work — the buyer keeps the vehicle and accepts a cash payment, often when the defect is partially repaired or the vehicle still has utility despite ongoing issues.

Read → Article

Mileage Offset Under California's Lemon Law

The single deduction from a Song-Beverly buyback — how the mileage offset is calculated under § 1793.2(d)(2)(C), why it's tied to miles before the first repair attempt, and how to avoid overpaying.

Read → Article

The Civil Penalty (Up to 2x Damages) Under § 1794(c)

California's distinctive civil-penalty multiplier — when willful violations of the Song-Beverly Act let buyers recover up to twice their actual damages.

Read → Article

Replacement Vehicle Under California Lemon Law

When a substantially identical new vehicle is the right Song-Beverly remedy, what "substantially identical" actually means, and why most California buyers still choose buyback.

Read →