When you win a lemon law buyback in California, the manufacturer must return nearly everything you paid — but it gets to keep one slice, called the mileage offset. It’s the only deduction the law allows, and it’s also the number manufacturers most often get wrong. Understanding how it works can be the difference of thousands of dollars in your refund.
Quick answer: The mileage offset (or “usage fee”) is the single deduction a manufacturer may subtract from your lemon law buyback. It’s based on how far you drove before your first repair visit for the defect, using the formula (miles at first repair ÷ 120,000) × purchase price. Nothing else gets deducted — and miles you drive after that first visit don’t count.
What is the mileage offset?
The mileage offset represents the use you got out of the vehicle before the defect first showed up. California Civil Code §1793.2(d)(2)(C) allows the manufacturer to deduct this amount — and only this amount — from your buyback. Everything else you’re owed (price, taxes, fees, finance payments, and out-of-pocket costs) is reimbursed in full. Before worrying about the offset, the first step is confirming your vehicle qualifies as a lemon.
The formula, step by step
Mileage offset = (miles at first repair attempt ÷ 120,000) × purchase price
Three numbers drive it:
- Miles at first repair attempt — the odometer reading when you first brought the car in for the defect that made it a lemon.
- 120,000 — the useful life California law presumes for every vehicle. It’s fixed and does not change by make, model, or vehicle type.
- Purchase price — the full amount you actually paid (more on this below).
Worked examples
Because the offset is tied to mileage at the first repair, the earlier a defect appears, the smaller the deduction. On a $45,000 vehicle:
- First repair at 3,000 miles → (3,000 ÷ 120,000) × $45,000 = $1,125
- First repair at 8,000 miles → (8,000 ÷ 120,000) × $45,000 = $3,000
- First repair at 20,000 miles → (20,000 ÷ 120,000) × $45,000 = $7,500
These are illustrations, not predictions — but they show why the mileage at your first visit matters so much.
The mistake that costs the most
The most common (and most expensive) error is using your current mileage instead of the mileage at the first repair attempt. Defective vehicles often rack up miles during months of failed repairs, so this single substitution can inflate the deduction dramatically. If your car first went in for the defect at 8,000 miles but the buyback happens at 22,000 miles, the offset should still be calculated on 8,000 — not 22,000. Always check which figure the manufacturer used.
What counts as “purchase price”
Manufacturers sometimes lowball the price side of the formula too. The purchase price means the full amount you paid — the vehicle price plus sales tax, license and registration fees, and manufacturer-installed options. It does not mean the bare vehicle price they may quote. Extended warranties, GAP coverage, and non-manufacturer add-ons (like aftermarket accessories) are generally excluded from this figure. Pull your purchase paperwork and add up everything you actually paid.
What the offset does NOT touch
The mileage offset is the only deduction — and several important items sit completely outside it:
- Incidental costs like towing and rental cars are reimbursed on top of your refund; the offset doesn’t reduce them.
- Civil penalties. Where a manufacturer’s violation was willful, you may recover up to two times your actual damages under Civil Code §1794(c). That penalty is measured against your damages and is not reduced by the offset.
- Trade-in or resale proceeds. Under the California Supreme Court’s decision in Niedermeier v. FCA US LLC, your restitution is not reduced by what you received for trading in or selling the defective vehicle.
How it works for leased vehicles
If you leased rather than purchased, the idea is the same but the math differs: you recover your lease payments and down payment, reduced by a use-based fraction tied to the same 120,000-mile standard. The principle is identical — you’re charged only for the use you got before the defect appeared.
How to protect your refund
Note the exact mileage and date of your first defect-related visit — that number controls the offset. Keep every repair order, invoice, and rental or towing receipt. When an offer arrives, request a line-by-line calculation and confirm it used mileage at first repair and your full purchase price. Before accepting anything, have an attorney check the math; see how the process works and our buyback guide for the full picture. Because California shifts attorney’s fees onto the manufacturer when you win, this review costs you nothing.
Want your numbers checked?
American Lemon Law Group will review your repair history and the manufacturer’s offset math at no cost — and tell you whether you’re being shortchanged. See our case results, then call (877) 311-1133 or request a free case evaluation.
This article is for general informational purposes only and is not legal advice. The dollar figures are illustrative examples, not predictions of any specific result; every case is different and outcomes depend on its facts. Consult a qualified California lemon law attorney about your situation.