Extended Warranty Vs Buyback: What Should You Choose Under California Lemon Law?

Nothing is more frustrating than ending up with a lemon. When you invest a good deal of money and time in buying a car, you expect it to run smoothly, but instead, you are stuck with constant repairs and headaches. Like many owners dealing with a car that seems more trouble than it’s worth, you might be considering your options under the California Lemon Law.

But when you approach your dealer for a buyback, they come back with the offer of an extended warranty instead. Although it sounds reasonable, you don’t need to rush into a decision. When it comes to a lemon, you must weigh the pros and cons of extended warranty vs buyback carefully.

In this post, we will shed some light on this debate.

Let’s get started.

Understand the California Lemon Law

Since 1970, the California Lemon Law has protected consumers who buy or lease a car that can’t be repaired. If your vehicle has a substantial defect that the manufacturer can’t fix after a reasonable number of attempts, you might be entitled to a buyback or a replacement. You can also seek damages, depending on your situation.

The law applies to cars, pickup trucks, vans, SUVs, and dealer-owned vehicles, but they must be under the original manufacturer’s warranty. Also, these defects must reduce your vehicle’s use, value, or safety and should not be caused by abuse.

The Chevy Malibu vacuum pump problem is an example of how lemon vehicles can put the safety of drivers and passengers at risk. The ongoing lawsuit alleges that General Motors knew about these issues and did not repair, replace, or recall these defective cars.

What Is an Extended Warr anty

An extended warranty provides additional coverage for your car or truck, which kicks in after the original manufacturer’s warranty expires. Most car manufacturers offer an extended warranty with a deductible to help owners avoid out-of-pocket repairs.

Pros of an Extended Warranty

Continued Use of the Vehicle: With an extended warranty, you can continue using your vehicle, which is a huge plus, especially if you really like it.

Extended Cover: An extended warranty may protect you from out-of-pocket expenses, but read the fine print to know what’s covered and what isn’t.

Cons of an Extended Warranty

Doesn’t Necessarily Fix the Problem: While an extended warranty covers repairs, it doesn’t guarantee to repair the ongoing problems with your vehicle. These issues might continue to plague your car and cause more trouble than you bargained for.

Limited Coverage: Extended warranties often have exclusions and limitations. That means you may need to pay for some repairs out of your pocket.

It’s Deductible: Most car dealers and manufacturers offer extended warranties for a deductible, which means you pay for the warranty itself.

Lemon Law Limitations: The extended warranty may look like the original manufacturer’s warranty, but it’s not the same. The California Lemon Law applies only to those repairs covered by an original manufacturer’s warranty. So, with an extended warranty, you might still have to deal with the same issues instead of a complete resolution like a buyback.

What Is Buyback

A buyback is when the manufacturer repurchases your lemon vehicle. The manufacturer may reimburse you for the car’s purchase price, including the down payment, monthly payments, and related costs like taxes and registration fees.

A buyback helps you avoid ongoing repair hassles and get a fresh start. Lemon law attorneys in California often recommend a buyback because it comes with a few unique benefits.

Pros of a Buyback

Refund: The manufacturer will repay your down payment, monthly payments made to date, the remaining balance of your loan, and other related costs.

Peaceful Solution: With a buyback, you won’t have to deal with the same car problems again. It saves you from follow-up appointments, frequent breakdowns, and dealing with the manufacturer.

Potential Drawbacks

Although it’s a convenient solution, buyback does have a few disadvantages of its own. For one, the refund may not cover the original cost, as the manufacturer is required to repay the purchase price minus a mileage offset. Besides the mileage offset, the manufacturer will deduct a reasonable allowance, which will affect your refund.

Extended Warranty Vs Buyback: Which Is Better? 

When it comes to extended warranty vs buyback, the former may seem like a faster and cheaper solution. It offers additional cover after your original warrant expires and lets you keep your car, which is a plus if you don’t have a backup vehicle. However, it may not fix the ongoing car troubles and often comes with a deductible.

On the other hand, a buyback means the manufacturer repurchases your vehicle, providing a full refund. It allows you to start over with a new car, free from the old problems. However, finding a new vehicle can be time-consuming, and the buyback amount might not cover the original purchase cost.

Conclusion

When you purchase a lemon in California, you are faced with two choices – extended warranty vs buyback. Choosing between the two requires careful consideration, including the pros and cons involved in both options. Think about which option best solves your problem in the long run. But if you want to make an informed decision, talk to a competent lemon law attorney in California.

 Author: Brian K. Cline’s Lemon Law Legal Group provides premier legal services. Our California lemon law lawyers aggressively and ethically force vehicle manufacturers to buy back defective and dangerous vehicles. Our team includes experienced trial lawyers with over 40 years of combined trial experience.