If your vehicle qualifies under your state’s Lemon Law, the manufacturer typically has two options:

• Buyback (Repurchase)
• Replacement Vehicle

But which one is better?

The answer depends on your financial situation, your goals, and how the numbers work out.

Here’s how to think about it.

What Is a Lemon Law Buyback?

A buyback (also called a repurchase) means the manufacturer takes the defective vehicle back and refunds you.

In most states, the refund includes:

• Down payment
• Monthly payments made
• Sales tax
• Registration/title fees
• Remaining loan balance (paid to lender)

However, manufacturers usually deduct a mileage offset (also called a usage fee) based on how many miles were driven before the first repair attempt.

Pros of a Buyback

✔ You get out of the defective vehicle completely
✔ You are not stuck with the same model again
✔ You regain control of your financing
✔ Clean break from the manufacturer

Cons of a Buyback

✘ Mileage deduction reduces refund
✘ You must shop for a new vehicle
✘ Current interest rates may be higher
✘ Possible gap between payoff and refund timing

What Is a Lemon Law Replacement?

A replacement means the manufacturer provides a new, comparable vehicle.

Typically:

• You turn in the defective vehicle
• You receive a new one of similar model and trim
• Loan balance transfers to the new vehicle
• Mileage offset may still apply (in many states)

Pros of a Replacement

✔ No need to shop for another brand
✔ You keep similar features
✔ Financing often continues seamlessly
✔ May avoid some market price increases

Cons of a Replacement

✘ You’re still tied to the same manufacturer
✘ If systemic defect exists, risk of repeat issues
✘ Trim availability may vary
✘ Less flexibility than cash refund

Financial Considerations

The better option often comes down to math.

Ask:

• What is my mileage offset?
• What is my current loan balance?
• Are vehicle prices higher now?
• Are interest rates higher than when I bought?
• Do I want to stay with this manufacturer?

In a high-interest-rate environment, replacement may look more attractive.

If the model has known recurring issues, buyback may be safer.

Emotional Considerations Matter Too

Many consumers choose buyback because:

• Trust is broken
• They’ve had repeated service visits
• They no longer feel confident in the vehicle

Peace of mind has value.

Does the Manufacturer Get to Choose?

In some states, the manufacturer may initially offer one option.

However, depending on state law and negotiation, you may have leverage to push for the option that better serves your interests.

Which Is “Better”?

There’s no universal answer.

Buyback may be better if:

• You want a clean break
• The model has systemic defects
• You want a different brand
• You are concerned about repeat issues

Replacement may be better if:

• You like the vehicle model
• Financing terms are favorable
• The defect appears isolated
• Market prices have increased significantly

The Bottom Line

Buyback and replacement both resolve the Lemon Law claim — but they lead to very different outcomes.

The right choice depends on:

• Financial math
• Loan terms
• Vehicle pricing trends
• Your confidence in the manufacturer

Understanding the numbers before choosing is critical.