Replacement Vehicle Under Massachusetts Lemon Law

Under § 7N½(3), the consumer may elect a replacement vehicle instead of a refund when the Lemon Law standard is met.

What “comparable” means

Massachusetts requires a substantially identical new vehicle:

• Same make, model, model year (or current year if older is unavailable).
• Same trim and major options.
• Comparable color (if available).

What the manufacturer must provide

• A comparable new vehicle.
• New manufacturer warranty (starting from delivery of the replacement).
• Adjustment for any difference in MSRP (typically refunded to consumer).
• Sales tax adjustments.

What the consumer keeps

• The full new-vehicle warranty period restarts.
• Plate transfer where eligible.
• Any extended-warranty rights transferred (manufacturer’s choice).

What the consumer surrenders

• The original defective vehicle.
• Original title.
• Original registration.

When replacement makes sense

• The original vehicle was a relatively recent purchase (small mileage offset against refund).
• Strong loyalty to the brand / model.
• The defect is a manufacturing issue not tied to that specific build slot.
• The consumer wants to avoid loan payoff complications.

When refund makes sense over replacement

• The defect is endemic to the model line (replacement may produce a second lemon).
• The vehicle’s market value has declined materially.
• The consumer wants to switch brands.
• Substantial mileage on the original vehicle (refund minus use deduction is preferable).

Tax and excise treatment

Massachusetts sales tax was paid on the original purchase. For the replacement:

• The manufacturer pays the sales tax differential (if any).
• License transfers are handled administratively.
• Title transfer is between the consumer and the manufacturer.
• Excise tax for the new vehicle is administered by the consumer’s city/town.

A concrete example

Original vehicle: $42,000 with $2,625 sales tax. Replacement: $43,500 with $2,719 sales tax.

Element	Amount
Replacement vehicle MSRP differential	Manufacturer pays $1,500
Sales tax differential	Manufacturer pays $94
Title transfer	Administrative
Use deduction	Typically waived in replacement context

Mechanics

1. OCABR arbitration decision, settlement, or court order documented.
2. Manufacturer locates suitable replacement vehicle (or builds to spec).
3. Delivery scheduled at original dealer or designated alternative.
4. Title and registration transfer.
5. Original vehicle surrendered.
6. New warranty period begins.

Total time: 6-12 weeks for OCABR arbitration outcomes; 4-8 weeks for court settlement.

Bottom line

Replacement is often a good outcome for low-mileage Massachusetts vehicles with isolated defects — but when the defect pattern is endemic to a model line, refund is typically the better choice.

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