Which is Best: Refund or Replacement?

When Broken Arrow, Oklahoma consumer Angie Gallant didn’t get complete satisfaction from the manufacturer for her defective 2004 Chevrolet Malibu, she realized it was because of an ambiguity in the lemon law of Oklahoma. She took the fight on personally, and was highly instrumental in the passage of Oklahoma State Bill 812, which considerably strengthens that state’s lemon laws. Now consumers will get their due and Gallant is being hailed as a hero—although she says she just wanted a car that worked.

Because of the then-flawed statutes, Gallant had to settle for a replacement and the charge of a $1,530 fee for miles driven on the defective car. Under many state laws, however, you don’t have to settle for what the manufacturer is offering as a remedy.

“You are usually not limited to the remedy the dealer or manufacturer recommends,” said Norman Taylor, leading California lemon law attorney. “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.”

In his many years as a consumer activist and lemon law attorney, Taylor has had much occasion to research the fine points of these laws and observe them in action. He has been a lemon law California specialist since 1987, and he and his firm, Norman Taylor and Associates, have handled over 8,000 cases for consumers with a 98 percent success rate.

It is important that a consumer makes an informed choice as to the available options when it comes to a defective vehicle. For example, a refund can include the down payment, all monthly payments made including finance charges, and the loan balance fully paid off. It can also include sales tax and registration fees and other expenses incurred in connection with the defective vehicle such as rental cars, towing, repairs and storage.

If replacement is chosen as a remedy, replacement must be with a new vehicle comparable in make, model and options to the vehicle being replaced. The manufacturer must typically pay any sales tax and registration fees on the new vehicle. If the defective vehicle was still under the terms of a loan, the consumer can normally keep the existing loan and full credit for all payments made.

Whatever remedy is offered, seeking qualified help is essential. “Under many laws including California, you do have a choice of remedy,” Taylor said. “I recommend that you consult a lemon law attorney to help you decide what is best for you.”

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