If the manufacturer were to repurchase a vehicle without paying for its accessories, the manufacturer would be getting more than it paid for, which would be unfair. In the law this is called unjust enrichment.
Here is another way to look at it. The consumer is returning the vehicle to the manufacturer only because of its defects. The seller should know, at the time of sale, that if you end up having to return the vehicle, you will also have to return any accessories that came with it. It follows that accessories that come with the vehicle are consequential damages. Continue reading Chapter 10: Replacement or Refund: Choosing a Remedy (Page-09)
Incidental: an award in a lawsuit for breach of contract in compensation for commercially reasonable expenses incurred as a result of the other party’s breach, such as costs of inspecting and returning goods that do not conform to contract specifications.
The consumer also has the right to choose neither refund nor replacement, and keep the vehicle even though it is defective. In such a case, the consumer would still be entitled to recover the difference between what the vehicle is worth with the defects and what it would have been worth without the defects.
The manufacturer may also have to reimburse you for incidental charges that you reasonably incurred in connection with your defective vehicle, such as rental cars, towing, repairs, and storage.
As with a refund, most states permit the manufacturer to deduct some allowance for your use of the vehicle.
Example of a Replacement
Using the same facts in the refund example, the consumer’s three-year-old sedan has leather seats, a CD player, and a sunroof. The consumer would receive a brand-new current year sedan of the same make and model, with leather seats, a CD player, and a sunroof. The manufacturer would cover the sales tax and registration fees on the new vehicle. Continue reading Chapter 10: Replacement or Refund: Choosing a Remedy (Page-05)
California’s lemon law calculates the offset for use by multiplying the purchase price of the vehicle by the mileage that the consumer put on the vehicle before first returning the vehicle for repair, divided by 120,000 miles. In this example, the manufacturer is entitled to an offset of
[(5,765 miles - 112 miles) / 120,000 miles] X $22,500.00 = $1,059.94.
Finally, the manufacturer will reimburse the consumer for registration, rental, and towing, for a total of $1,120.00.
• The vehicle had 112 miles at the time of purchase. • The original selling price of the vehicle was $22,500.00. The consumer got a five-year loan. • The taxes and license for the vehicle were $2,250.00, included in the amount financed. • The consumer made a down payment of $5,000.00.
• The consumer made 36 payments at $340.00 each. There is a loan balance of $9,800.00.
• The consumer spent $650.00 on DMV registration, $320.00 on rental cars, and $150.00 on towing charges.
• The vehicle’s total miles are 48,943. The consumer first returned the vehicle for repair at 5,765 miles. Continue reading Chapter 10: Replacement or Refund: Choosing a Remedy (Page-03)
You are usually not limited to the remedy the dealer or manufacturer recommends. For example, if the manufacturer suggests that you must accept a replacement vehicle instead of a refund, in many states-including California-this is not true. You get to choose. I recommend that you consult a lemon law attorney to help you decide what is best for you.
• Something that corrects an evil, fault, or error.
• A legal order that prevents or corrects a wrong or enforces a right.
All the consumer ever wanted from day one was for the manufacturer and its dealers to correct the defect and let the consumer get on with his or her life.
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