What to Know About a Car Manufacturer Buyback

A remedy for when things go sour with a new car.

Rear three-quarter view of a 2014 Volkswagen Golf TDIVolkswagen

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When you purchase a new vehicle, you typically expect at least a couple of years of trouble-free motoring. Unfortunately, that's not always the case.

What happens if your new ride turns out to be a lemon? Read on to learn more about manufacturer buybacks.

Car Manufacturer Buybacks Explained

A manufacturer buyback is when an automaker purchases a new car back from the buyer or lessee. Manufacturer buybacks can be issued if your car is under warranty, repair of your vehicle is required by law, and the vehicle cannot be repaired after a reasonable number of attempts.

Certain types of buybacks are governed by so-called lemon laws, which outline the specific conditions a vehicle must meet to warrant a buyback from the automaker. Each state sets the terms and conditions of their lemon laws. The Better Business Bureau has a list of each state's lemon laws. Additionally, there is a federal lemon law known as the Magnuson-Moss Warranty Act.

While lemon laws provide the legal framework for most buybacks, automakers can repurchase vehicles for other reasons, such as an act of goodwill or to more closely examine a manufacturing defect.

When a Car Is a Lemon: Manufacturer Buyback Qualifications

The exact definition of a lemon, or vehicle eligible for buyback, varies between states, but there are a few universal commonalities.

In order to qualify as a lemon, a car must have a specific problem, such as a substantial manufacturing defect that couldn't be fixed — by either the manufacturer or one of its dealers — after a reasonable number of attempts and the problem is covered under the manufacturer's written warranty.

Substantial defects covered by lemon laws include a wide variety of vehicle components and functions. Again, this is just a potential example. Requirements can and do vary on a state by state basis. Reach out to a qualified professional for assistance if you feel your issues rise to the level of a buyback.

For non-safety-related defects, a recurring problem may require three or four unsuccessful repair attempts before the vehicle is labeled a lemon. If the defect is related to safety, such as an issue with the brakes, a vehicle may be tagged as a lemon after just one or two failed repair attempts.

A car could also qualify as a lemon if multiple unrelated issues arise. In Ohio, for example, state law deems that a car is a lemon after at least eight attempts have been made to fix unrelated issues.

Most lemon laws can also be triggered by the amount of time a vehicle spends at a service center. A vehicle may qualify for a lemon law buyback if it's been out of service for a total of 30 days within a certain period of time.

Car Manufacturer Buyback Limitations

Lemon laws don't provide blanket coverage for all new vehicles. Some states have mileage limits for lemon law claims, so even if your car is less than a year or two old, the numbers on the odometer might disqualify it from being eligible for a manufacturer's buyback.

In some cases, used cars could be eligible for buyback under lemon laws, however, the question for used cars is whether the vehicle defect is still covered under the manufacturer's original warranty.

If a consumer brings a claim under a state's lemon law and is successful, the manufacturer may have a choice between a buyback, replacement of the vehicle, or a refund to the customer. A manufacturer can choose to buy back a vehicle, or it can be compelled to do so by the government.

One example of a government-mandated buyback was the multimillion-dollar program by Volkswagen known as Dieselgate. Due to the German automaker's deceptive practices regarding emissions, VW bought back and removed from service hundreds of thousands of its diesel cars.

The Manufacturer Buyback Process

Once a vehicle meets the qualifications of a lemon, it's usually the responsibility of the owner or lessee to file a claim to initiate the buyback process. This is commonly done by sending a certified letter to the vehicle manufacturer that includes a list of problems and what attempts have been made to fix them.

What Happens to Buyback Vehicles

A vehicle that is bought back by the manufacturer due to a safety defect that could cause death or significant injury can't be resold to the general public unless the issue is completely rectified. Unlike state-organized lemon laws, this rule is a federal mandate covered by the National Traffic and Motor Vehicle Safety Act.

Lemons with less serious issues usually are allowed to be resold by the manufacturer. However, buyback vehicles earmarked for resale are required to have some form of disclosure informing the buyer about its sour past.

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Drew Johnson
I have been a professional automotive enthusiast since 2007, featured on several nationally-recognized sites. I attended Miami University, where I earned a business degree. Car nut at heart.