What Compensation Can You Get Under Lemon Law?

Compensation under lemon law splits into three buckets, plus a fourth that gets attached to almost every claim.

Bucket one: a buyback. The manufacturer takes the car back and refunds the purchase price, minus a "usage offset" based on the miles driven before the first reported defect. In most states the offset formula is statutory. A common version divides the miles driven before the first repair by 120,000 and multiplies the result by the purchase price, which usually works out to a 5-15% reduction. The remainder is your refund. The manufacturer also pays off the loan or lease balance directly with the lender.

Bucket two: a replacement vehicle. The manufacturer provides a comparable model, same trim, similar mileage, same warranty terms, at no additional cost. Replacements happen when the buyer wants a working version of what they originally bought. Mileage offsets sometimes still apply, but the math is usually simpler than a buyback.

Bucket three: a cash-and-keep settlement. The manufacturer cuts you a check while you keep the car. This is the most common settlement structure when the defect is real but does not totally disable the vehicle. What a claim is worth turns on the statute, the purchase price and the use offset, alongside the repair history and the state involved.

Bucket four: incidentals and fees. Most states require the manufacturer to reimburse incidentals, towing, rental cars, missed work, registration fees, and to pay your attorney's fees on top of the consumer recovery, under the fee-shift provision.

What drives which bucket your case lands in: the severity of the defect, the volume of repair attempts, the state's specific statute, the manufacturer's settlement posture, and whether the case has been filed in court or is still in the demand-letter stage. Past results do not guarantee future outcomes, every case is different and depends on its specific facts.

For state-specific recovery details, see our state lemon law pages.