Vehicle Use Offset

Vehicle Use Offset
When a consumer receives a refund for or replacement of a lemon vehicle, state lemon laws vary significantly on whether the manufacturer can deduct an offset for use of the vehicle.  Almost all states recognize that a consumer should not be charged for troubled use, – i.e., the consumer should only be charged for use that is trouble free.  Some state lemon laws only provide for a “reasonable” offset leaving it up to the courts to decide what, if any, offset is reasonable.  State lemon laws that provide a formula generally provide that the manufacturer is entitled to an offset for use only up to the first repair attempt for the non-conformity that resulted in the vehicle being a lemon. 

The two most common formulas used were to divide the number of miles driven up to the first repair attempt by either 100,000 or 120,000 and multiply that number by the purchase price. This would be how much is deducted as an offset for use.  States with older lemon laws use 100,000 miles but recent laws used 120,000 miles as vehicles have a longer useful life today.  Some states have bad offset provisions that reward a manufacturer for dragging out buying back a lemon and penalize a consumer for even the most troubled use.  Connecticut is bad by requiring a mandatory offset for all miles of use up to the date the manufacturer accepts return of the vehicle, which could be even later than a settlement agreement or arbitration hearing, and thus rewards a manufacturer for stonewalling the consumer until the last possible moment. Ohio and West Virginia have the best provisions on offsets because their lemon laws contain no offset for use.    The following is Ohio’s provision:

Ohio Revised Code

1345.72 Duty to repair nonconforming new motor vehicles.

Consumer’s options when repairs unsuccessful. . . .

       (B) If the manufacturer, its agent, or its authorized dealer is unable to conform the motor vehicle to any applicable express warranty by repairing or correcting any defect or condition that substantially impairs the use, safety, or value of the motor vehicle to the consumer after a reasonable number of repair attempts, the manufacturer shall, at the consumer’s option, and subject to division (D) of this section replace the motor vehicle with a new motor vehicle acceptable to the consumer or accept return of the vehicle from the consumer and refund each of the following:

             (1) The full purchase price including, but not limited to, charges for undercoating, transportation, and installed options;

             (2) All collateral charges, including but not limited to, sales tax, license and registration fees, and similar government charges;

             (3) All finance charges incurred by the consumer;

             (4) All incidental damages, including any reasonable fees charged by the lender for making or canceling the loan.