What You Can Recover Under the Lemon Law

You are entitled to have your vehicle replaced or repurchased (bought back) if the manufacturer or its authorized dealers are unable to repair a nonconformity in your vehicle within a reasonable number of attempts, thereby meeting the requirements of the Ohio lemon law. Whether you receive a refund or a replacement vehicle is up to you. If you choose a refund, the Ohio lemon law states that the manufacturer must refund the “full purchase price” of your vehicle. This includes charges for transportation, undercoating, dealer-installed options and accessories, dealer services, dealer preparation, delivery charges, all finance, credit insurance, warranty, and service contract charges and all sales tax, license and registration fees, and other government charges. It also includes any fees charged by the bank for making or canceling your loan or lease, and any expenses incurred as a result of the nonconformity, such as charges for towing, vehicle rental, meals, and lodging.

The Ohio lemon law states that the manufacturer should send a check for the total of all amounts listed above to your lender or leasing company, who will deduct the payoff and forward you a check for the balance. However, in settlement situations, the manufacturers usually just add up your down payment plus your payments made to date and issue a check to you, while sending a separate check to your lender or leasing company for the payoff. Either way, the refund amount should be about the same. Your lemon vehicle is returned to the manufacturer and you sign over the title.

Unlike some state’s lemon laws, Ohio does not require a mileage offset for your use of the vehicle. However, it is common that manufacturers ask for an offset for your reasonable use in the event of a settlement. Any offset would be deducted from your refund, but you should still receive most of your money back which you can use as the down payment on your new vehicle.

In a replacement situation, you pick a comparable new vehicle and exchange it for your lemon vehicle. Normally, the new vehicle you choose must be the same make and model as your lemon with the same features and options. If you choose an upgraded vehicle, you could be asked to pay the difference between the price of your vehicle and the price of the new one you choose. You still have credit for all the payments you have made to date and you simply go on making the same payments as agreed under your loan or lease.

However, not all vehicles will meet the state lemon law requirement. Under the Federal Magnuson-Moss Warranty Act, a consumer is unfortunately not entitled to a replacement vehicle or refund, as with the Ohio lemon laws. Under the Warrant[y] Act, you are normally entitled to a cash payment for what is often referred to as “diminished value.” Essentially, this means the difference in value between what you paid for and what you actually received. To put it another way, how much less is your lemon vehicle (or other consumer product) worth based upon the problems you have had to deal with? Obviously, if you knew you were going to have the problems with the vehicle, you probably would not have bought it. But based upon our experience in settling thousands of “breach of warranty” claims with the manufacturers and their lawyers, the amount paid to the consumer for damages under the Warranty Act usually falls within a range of approximately 20-35% of the price of the vehicle. You receive the cash payment and keep the lemon vehicle, although you certainly don’t have to keep the vehicle once your case is over. Many of our former clients have used that money, along with the trade-in of their lemon vehicle, to purchase a new one, or you can just keep the money as compensation for the problems you have endured with your lemon.