If your vehicle qualifies under Lemon Law and the manufacturer agrees to a buyback, you may be entitled to a refund.
But then comes the question that worries almost everyone:
“How much will they deduct for mileage?”
The short answer is:
👉 Most states allow manufacturers to deduct a “reasonable use” amount based on the miles you drove before the defect first appeared.
That deduction is commonly called:
- a mileage offset
- a usage fee
- a reasonable use deduction
Here’s how it works.
Why Is There a Mileage Deduction?
Lemon Law is designed to compensate consumers — not provide a completely free vehicle.
If you drove the vehicle for a period of time before the problem arose, the manufacturer is typically allowed to deduct an amount representing that use.
In most states, the mileage deduction is based on:
- the mileage at the first repair attempt for the defect
- not the total mileage at buyback
That distinction is extremely important.
The Basic Lemon Law Mileage Deduction Formula
Many states use a formula similar to this:
(Mileage at first repair attempt ÷ 120,000) × Purchase price
Some states use 100,000 or another statutory number, but 120,000 miles is common.
This formula calculates the “reasonable use” value.
Example of a Lemon Law Mileage Deduction
Let’s say:
- Purchase price: $40,000
- First repair attempt at: 5,000 miles
Using a 120,000-mile formula:
5,000 ÷ 120,000 = 0.0417
0.0417 × $40,000 = $1,668
In this example, the manufacturer may deduct approximately $1,668 from your refund.
That means you would still recover the rest of your eligible expenses.
What Mileage Counts?
In most states, the key number is:
👉 The mileage when you first brought the vehicle in for repair of the defect.
Not:
- The mileage at buyback
- The total miles driven
- The miles accumulated while the vehicle was repeatedly in the shop
This is critical because manufacturers sometimes attempt to calculate the deduction incorrectly.
What If the Vehicle Was in the Shop for Months?
Many consumers worry:
“I kept driving it while waiting for parts — does all that mileage count?”
In most states, the mileage offset is based on the mileage at the first repair attempt — not subsequent miles.
However, calculations can vary depending on state law and the structure of the settlement.
Does Every State Use the Same Formula?
No.
Mileage deduction formulas vary by state.
Some states:
- Use 120,000 miles as the denominator
- Use 100,000 miles
- Use a different statutory calculation
- Have slightly different methods
Because Lemon Law is state-specific, the formula depends on where you purchased or registered the vehicle.
What If the Problem Started Immediately?
If the defect appeared very early — for example:
- within the first few hundred miles
- shortly after purchase
- during the first weeks of ownership
The mileage deduction may be very small.
In some cases, it may be only a few hundred dollars.
What If You Had Multiple Defects?
Mileage deduction is typically tied to:
- the first repair attempt for the defect that qualifies the vehicle as a lemon
If multiple issues qualify, calculations may become more complex.
What About Leased Vehicles?
Mileage deductions apply to leases as well.
However, instead of refunding a “purchase price,” the calculation is applied to:
- the capitalized cost
- total lease payments made
- lease structure
The result may still include a reasonable use deduction.
Can the Manufacturer Deduct for Damage?
Mileage deduction is separate from:
- excessive wear and tear
- body damage
- interior damage
- aftermarket modifications
If your vehicle has significant damage beyond normal use, the manufacturer may attempt additional deductions.
Do You Have to Accept the Manufacturer’s Calculation?
Not necessarily.
Manufacturers sometimes:
- miscalculate mileage
- use the wrong first repair date
- include extra miles improperly
- apply the wrong formula
Consumers should verify:
- the mileage at the first repair visit
- the purchase price used in the formula
- the denominator (100,000 vs 120,000, etc.)
Even small errors can change the deduction amount.
What If the First Repair Attempt Was Very Late?
If you waited a long time before reporting the defect — for example, 15,000 miles — the mileage deduction may be larger.
This is why documenting early repair visits is important.
How Much Do Most Consumers Lose to Mileage Deduction?
In many cases:
- The deduction is relatively small compared to the full refund.
- It is often a fraction of the total vehicle price.
For example:
Vehicle price: $50,000
First repair at 4,000 miles
Deduction: approximately $1,666 (using 120,000 formula)
That means the vast majority of your purchase price may still be reimbursed.
Can You Avoid the Mileage Deduction?
In statutory Lemon Law buybacks, mileage deductions are usually required by law.
However, in negotiated settlements (such as “cash and keep” resolutions), the structure may differ.
Some cases resolve outside strict statutory formulas.
The Bottom Line
Yes, Lemon Law buybacks usually include a mileage deduction.
But:
- The deduction is typically based on mileage at the first repair attempt
- It is calculated using a statutory formula
- It is often much smaller than consumers expect
- Manufacturers sometimes calculate it incorrectly
Even with a mileage deduction, many consumers recover:
- down payments
- monthly payments
- trade-in value
- taxes and fees
- loan payoff
Concerned About How Much Will Be Deducted?
If your vehicle has repeated defects or extended repair time, you may qualify for a Lemon Law claim.
An attorney can help:
- confirm whether the mileage calculation is correct
- evaluate your potential refund
- negotiate the buyback amount
- determine whether a replacement or settlement makes sense
Understanding the mileage deduction is important — but it shouldn’t stop you from exploring your rights.
