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The Consumer Law Group, P.C.

How much do Lemon Law claims cost auto manufacturers?

A Wooden Gavel on Top of a Stack of MoneyWhen you file a successful Lemon Law claim in Virginia, you are entitled to choose whether you want a replacement vehicle or a refund of the full contract price. When you choose a refund, you are also entitled to any additional expenses, otherwise known as “collateral charges” related to the purchase and operation of your vehicle for the time you had it. If you needed the services of an attorney for a successful resolution of your Lemon Law claim, the carmaker must also pay the legal fees. All told, the carmaker’s costs can add up to much more than just the cost of the vehicle.

What Is Included in Collateral Charges

On top of the purchase price of the vehicle, a carmaker must also refund the following additional expenses:

  • Sales tax

  • License fees

  • Registration fees

  • Title fees

  • Finance charges and interest

  • Transportation charges

  • Dealer preparation charges

  • Charges for service contracts, undercoating, rust proofing, or installed options, not recoverable from a third party

If the vehicle you are returning was leased, you are also entitled to the following:

  • Capitalized cost reductions

  • Credits and allowances for any trade-in vehicles,

  • Fees to another to obtain the lease

  • Insurance or other costs expended by the lessor for the benefit of the lessee

You are also entitled to a reimbursement of mileage, expenses, and reasonable loss of use necessitated by attempts to conform the motor vehicle to the express warranty.

What This Means to the Manufacturer

Using an actual case litigated by The Consumer Law Group several years ago, we will illustrate what this cost breakdown could end up looking like. In this case, a woman made a Lemon Law claim on a high-mileage vehicle that was nonetheless still under warranty. Our firm demanded a payment of $15,000 to pay off the loan and legal fees totaling approximately $15,000. The automaker refused, counteroffering at $5,000. The claim went to court, and the jury found for the plaintiff and ordered the carmaker to pay the following:

  • $33,829.59 for payments made to date, to pay off the loan, and for court costs, minus $2,051.17 for mileage

  • $23,260 in legal fees

  • $55,028.59 total cost to manufacturer

Considering that the original purchase price of the vehicle was around $20,000, the Lemon Law claim clearly cost the manufacturer much more than a straightforward refund would have cost them.

There Are No Guarantees in Lemon Law Cases

When carmakers fight back against Lemon Law claims, they can end up making big payouts. As Lemon Law attorneys, our primary goal is to get you a new car or the money you are entitled to, but when we have a legitimate claim and the manufacturer disagrees, they risk losing large sums of money and our clients can benefit.