Refund (Buyback) Under Maryland Lemon Law

A Maryland Lemon Law refund (also called “buyback”) under § 14-1502(e) restores the consumer to their pre-purchase financial position, minus a reasonable-use offset.

What’s included in a § 14-1502(e) refund

Purchase price — the full price paid for the vehicle.
Sales tax — Maryland sales tax paid at purchase.
Registration and title fees.
Finance charges — interest paid on auto loan.
Incidental damages — rental car costs, towing, diagnostic fees, lost wages for repair-shop visits.
Trade-in credit — if a trade-in was part of the purchase.

The reasonable-use offset

§ 14-1502(e) provides for a reasonable use deduction. Maryland courts typically use:

Reasonable Use Offset = (Purchase Price × Miles Before First Report) ÷ 120,000

Example: $50,000 vehicle, first defect reported at 8,000 miles.

Offset = ($50,000 × 8,000) / 120,000 = $3,333
Refund = $50,000 - $3,333 = $46,667 + tax + fees + incidental

Lease vehicles

For leased vehicles, the refund covers:

All lease payments made.
Sales tax paid.
Down payment / capitalized cost reduction.
Acquisition fee.
Disposition fee (waived).
Incidental damages.

Plus the manufacturer must terminate the lease without further obligation.

What’s NOT typically included

GAP insurance (separate refund through GAP insurer).
Extended warranty (separate refund through warranty seller).
Personal modifications / aftermarket parts not factory-installed.
Consequential damages beyond statutory limits (without CPA claim).

Process for receiving refund

After BBB award, court judgment, or settlement:

Consumer signs surrender documents transferring vehicle title.
Manufacturer issues check typically within 30 days.
Lienholder paid first (auto loan balance).
Consumer receives the balance.

CPA stacking

A Lemon Law refund can be combined with CPA actual damages where deceptive practices are pleaded. CPA damages do not offset the Lemon Law refund.

Bottom line

A Maryland Lemon Law refund returns the consumer to their financial baseline, minus a reasonable-use offset capped at 120,000 miles. CPA stacking can increase total recovery.

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