If you’re dealing with a defective vehicle, you may already know that California Lemon Law can entitle you to a refund, replacement, or cash settlement. But what costs can actually be recovered in a lemon law claim?
This article explains exactly which expenses may be reimbursed under California Lemon Law — including rental cars, towing, repairs, taxes, and more — and how to protect your right to full compensation.
Overview: What Does California Lemon Law Compensate You For?
When a vehicle qualifies as a lemon, the manufacturer may be required to provide:
- A vehicle buy-back (refund)
- A replacement vehicle, or
- A cash settlement
In addition to the vehicle itself, you may be entitled to recover out-of-pocket expenses that resulted from the defect.
1. Monthly Payments & Down Payment
If your vehicle is repurchased (bought back), you are typically entitled to reimbursement for:
- Your down payment
- Monthly payments made toward the loan or lease
- Trade-in value applied to the purchase
These amounts are usually refunded, minus a small mileage offset based on how many miles you drove before the first repair attempt. This is not a penalty; it simply reflects the value you received from using the vehicle prior to the problem.
2. Sales Tax, Registration, and Government Fees
California Lemon Law buy-backs commonly include:
- Sales tax
- Registration fees
- Title and license fees
- Other government charges paid at purchase
These costs are part of what you paid to acquire the vehicle and are often reimbursed in a repurchase.
3. Rental Car & Loaner Vehicle Costs
If your vehicle was in the shop and you had to rely on alternate transportation, you may be able to recover:
- Rental car fees
- Insurance or daily rental charges
- Mileage charges related to rentals
Save all rental agreements and receipts. Even if the dealership provided a loaner, any related expenses should be documented.
4. Towing & Roadside Assistance
If your defective vehicle required:
- Towing due to breakdowns
- Roadside assistance (lockouts, dead batteries, stalled vehicle)
…those costs may be reimbursable as part of your lemon law claim. These expenses often arise directly from the defect and can strengthen your case when properly documented.
5. Repair Costs (If You Paid Out of Pocket)
In many cases, repairs are covered under warranty. However, you may still recover:
- Out-of-pocket repair expenses
- Diagnostic fees
- Deductibles or service charges
This is especially relevant if you:
- Paid for repairs before realizing the issue was warranty-covered
- Used an authorized repair facility that charged fees
Always keep invoices and receipts for any work performed.
6. Financing-Related Costs
In many lemon law buy-backs, the manufacturer also handles:
- Paying off the remaining loan balance
- Reimbursing lease payments
This prevents you from being stuck with a loan on a vehicle you no longer own.
7. Incidental & Consequential Damages
Some cases may include additional compensation for:
- Uber or rideshare costs while your car was in the shop
- Parking fees related to service visits
- Lost wages if you had to miss work due to repeated repairs
These damages are evaluated case-by-case and require clear documentation.
What You Must Do to Recover These Costs
To maximize your compensation:
Keep all repair orders and invoices
Save rental agreements and towing receipts
Track days out of service
Document communications with the dealership and manufacturer
Report defects promptly and in writing
Lack of documentation is one of the most common reasons consumers lose reimbursement for expenses they otherwise could have recovered.
Many consumers assume lemon law only covers a vehicle refund — but in reality, you may be entitled to recover thousands of dollars in related expenses such as rentals, towing, taxes, and repair costs. The key is documentation and timing. The sooner you act and the better your records, the stronger your claim.
Get Help Recovering What You’re Owed
If your car has had repeated repairs or has spent weeks in the shop, you may qualify for compensation under California Lemon Law.
The attorneys at California Lemon Law Services can:
- Review your case for free
- Handle all negotiations with the manufacturer
- Seek a buy-back, replacement, or cash settlement
- Cost you nothing out of pocket
Call us today to speak to an experienced Lemon Law Attorney in California.
The manufacturer pays all attorney fees.
