Maryland Lemon Law Buybacks & Compensation Explained

The Reality of Lemon Cars in Maryland

Buying a brand-new car should come with peace of mind, but what if your vehicle keeps breaking down despite multiple repair attempts? You might not be alone. According to industry estimates, nearly 150,000 vehicles in the U.S. are sold each year with serious defects that qualify them as lemons. Thankfully, Maryland has laws in place to protect consumers who end up with defective vehicles.

The Maryland Lemon Law, officially known as the Automotive Warranty Enforcement Act (Md. Code, Com. Law § 14-1501 et seq.), provides legal options for car owners who have purchased a faulty vehicle. But what happens if your car qualifies as a lemon? Can you get a full refund or a replacement? What expenses will the manufacturer cover? This article will walk you through everything you need to know about Maryland Lemon Law buybacks, refunds, and compensation so you can take action confidently.

Understanding Maryland’s Lemon Law Buyback & Compensation Process

Under Maryland’s Lemon Law, a buyback occurs when the manufacturer repurchases your defective vehicle after failing to fix it. In addition to a buyback, consumers may also opt for a replacement vehicle instead of a refund. The law is designed to ensure that you don’t bear the financial burden of a car that is defective beyond repair.

Does Your Car Qualify for a Buyback?

To qualify for a Lemon Law buyback in Maryland, your vehicle must meet the following conditions:

• It must have been purchased or leased in Maryland.
• It must be a passenger car, truck under ¾ ton capacity, or motorcycle registered in Maryland.
• The defect must substantially impair the use, market value, or safety of the vehicle.
• The defect must not be caused by abuse, neglect, or unauthorized modifications.

Additionally, the law requires the manufacturer to repair the defect within a reasonable number of attempts:

• Four unsuccessful repair attempts for the same defect.
• The vehicle must be out of service for at least 30 days due to repairs.

If your car meets these conditions, you can request a buyback or replacement vehicle under Maryland’s Lemon Law.

What Is Included in a Maryland Lemon Law Buyback?

When a manufacturer repurchases a lemon vehicle, they must reimburse the owner for a variety of costs. Here’s what you can expect in a buyback:

Full Vehicle Refund

• The manufacturer must refund the full purchase price of the car, including:
• The vehicle’s original cost.
• Sales tax, registration fees, and title fees.
• Finance charges, if applicable.

Reimbursement for Repair Costs

• If you paid for repairs out of pocket before your car was deemed a lemon, the manufacturer may be required to reimburse you for those expenses.

Compensation for Additional Expenses

• Maryland Lemon Law also allows car owners to be reimbursed for incidental expenses, including:
• Towing fees incurred while dealing with breakdowns.
• Rental car expenses if you needed alternative transportation.

Allowance for Use Deduction

While Maryland’s Lemon Law is consumer-friendly, it does allow manufacturers to deduct an allowance for use before issuing a full refund. This deduction is based on how many miles you drove before the first repair attempt for the defect. The formula used is:

Allowance for Use = (Mileage at first repair attempt ÷ 100,000) × Purchase Price

For example, if your vehicle was $30,000, and your first repair attempt occurred at 8,000 miles, your deduction would be:

(8,000 ÷ 100,000) × 30,000 = $2,400 deduction

This means your final refund would be $27,600 instead of $30,000. However, this deduction is relatively small compared to the cost of being stuck with a lemon.

What If You Prefer a Replacement Instead of a Refund?

If you don’t want a refund, Maryland Lemon Law gives you the option to request a replacement vehicle of comparable value. The replacement must:

• Be identical or substantially similar to the defective vehicle.
• Have the same warranty coverage as the original vehicle.
• Be free from defects that impair its use, market value, or safety.

However, it’s important to note that not all manufacturers offer a replacement vehicle option. If a replacement is not available, you will have to proceed with the buyback process.

How Long Does the Buyback Process Take?

The buyback process varies depending on the manufacturer’s response and whether they cooperate. Ideally, once a claim is approved, the manufacturer should complete the refund or replacement within a few weeks. However, if the manufacturer resists, the process can take several months, especially if legal action is required.

To speed up the process, make sure you have:

• Detailed repair records showing all attempts to fix the defect.
• Receipts for out-of-pocket expenses like towing or rental cars.
• Correspondence with the dealer or manufacturer about your complaints.

The stronger your documentation, the faster and smoother your case will go.

What If the Manufacturer Refuses to Buy Back Your Lemon?

Unfortunately, some manufacturers deny valid claims or delay refunds. If this happens, you have a few options:

File for Arbitration

Maryland requires manufacturers to offer a state-certified arbitration program where an independent third party reviews the case and decides if you qualify for a buyback. This process is faster and cheaper than filing a lawsuit.

Important: If the manufacturer’s arbitration program is state-certified, you must go through arbitration before filing a lawsuit.

File a Lawsuit Under Maryland Lemon Law

If arbitration fails or the manufacturer refuses to comply, you can file a lawsuit against them. Maryland allows consumers to sue in civil court within three years from the date the vehicle was delivered.

Under Maryland Lemon Law, if you win your case, the manufacturer may be required to cover your attorney’s fees, making legal action less financially risky.

Tips to Strengthen Your Lemon Law Claim

• Keep Records of All Repairs: Maintain copies of work orders, repair invoices, and technician notes.
• Document Communication: Save emails and letters between you and the manufacturer or dealership.
• File a Complaint with the Maryland Attorney General: The Consumer Protection Division can assist with disputes. Contact them at (410) 528-8662 or visit www.marylandattorneygeneral.gov.
• Consult a Lemon Law Attorney: Legal guidance ensures you receive the maximum compensation.

Additional information:
Maryland Lemon Law Information