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Buyback, Replacement or Cash and Keep

The three ways a California Lemon Law claim ends, and how they actually differ.

Short answer

A buyback returns your money and you give the vehicle back. A replacement swaps it for a substantially identical new one. Cash and keep leaves the vehicle with you and pays you for the loss in value. The mileage offset applies to the first two and not the third, and under California law the choice between a buyback and a replacement is generally yours.

How the three outcomes compare
Buyback Replacement Cash and keep
What you end up with Your money back and no vehicle. A substantially identical new vehicle. You keep the vehicle and receive a payment.
What the manufacturer pays Down payment, the payments made, and the remaining loan or lease balance. The cost of the replacement vehicle, plus taxes and registration on it. A negotiated sum reflecting the reduced value of the vehicle.
Does the mileage offset apply Yes. Deducted for the miles driven before the first repair attempt. Yes. The same deduction applies, usually paid rather than deducted. No. There is nothing to deduct it from.
What happens to your finance The loan or lease is paid off as part of the repurchase. Finance generally transfers or is rewritten against the new vehicle. Unchanged. You keep paying as before.
Does the car carry a lemon title afterwards Yes, once the manufacturer resells it. That is their problem, not yours. Yes, for the vehicle handed back. Your replacement has a clean title. No. No branding, because the vehicle was never handed back.
How long it usually takes Longest of the three. There is a vehicle and a finance agreement to unwind. Depends on the manufacturer having a comparable vehicle available. Usually the fastest, because nothing physical changes hands.
It tends to suit someone who Wants out of the vehicle and out of the brand. Likes the car and wants the same thing without the fault. Needs the vehicle day to day, or has modified it, and can live with the defect.

The mileage offset is worked out by formula from the mileage at your first repair attempt. Our buyback calculator will estimate it, and the glossary defines the terms used above.

Common questions

It depends on the vehicle and how much you paid, not on the option. A repurchase returns the most money, but you no longer have a car, so you have to buy one. A cash and keep settlement is a smaller sum, but you still have the vehicle. Comparing the headline figures alone is misleading.

Under the Song-Beverly Consumer Warranty Act the choice between a repurchase and a replacement is generally yours rather than the manufacturer’s. Cash and keep is different: it is a negotiated settlement, so both sides have to agree to it.

It is a statutory deduction for the use you had of the vehicle before the defect was first reported. It is worked out by formula from the mileage at the first repair attempt, not negotiated, and it applies to a repurchase and a replacement alike.

No. The lemon branding attaches to the vehicle handed back, not to you. The manufacturer has to disclose it when reselling that vehicle.

Generally no. A settlement usually resolves the claim, which is why it matters to understand what you are giving up before signing. That is worth advice rather than a guess.

General guidance, not legal advice. Which outcome is available, and which is worth taking, depends on your vehicle, your finance and your repair history.

Related Lemon Law Topics

Filing DeadlinesAttorney FeesCalifornia Lemon LawBuyback CalculatorHow to File a ClaimUsed Car Lemon Law