Arkansas Lemon Law Refund Calculator

How the Arkansas buyback is calculated

Under the New Motor Vehicle Quality Assurance Act.

• Under the Act, once the manufacturer, its agent or an authorized dealer has not fixed a substantially impairing problem after a reasonable number of attempts, the manufacturer must within 40 days either replace the vehicle or repurchase it and refund the full purchase price (or lease price), less offsets.
• You have an unconditional right to choose a refund rather than a replacement. The purchase price is the cash price paid for the vehicle appearing in your sales contract, including any net allowance for a trade-in vehicle.
• Arkansas writes the use offset into the statute: the actual price of the new vehicle paid or payable, including transportation and manufacturer-installed or agent-installed options, multiplied by a fraction. The fraction has 120,000 as its denominator and, as its numerator, the miles the vehicle traveled before you first delivered it for the problem. On a $35,000 vehicle first delivered for repair at 6,000 miles, that is $35,000 x 6,000 / 120,000 = $1,750.
• The refund is also reduced by "a reasonable offset for physical damage sustained to the vehicle while under the ownership of the consumer". The Act does not set an amount for it, so the calculator takes the figure you enter, if any.
• On top of the price, the refund includes all collateral and reasonably incurred incidental charges. Collateral charges include, but are not limited to, installed items, earned finance charges, sales taxes, title charges and charges for extended warranties provided by the manufacturer. Incidental charges include towing and the cost of alternative transportation directly caused by the problem, but not loss of use, loss of income or personal injury claims.
• The Act sets no damages multiplier. A consumer who prevails is entitled to recover costs and expenses, including attorney’s fees based on actual time expended, that the court finds reasonably incurred.
• The Act also has the manufacturer reimburse necessary towing and rental costs actually incurred as a direct result of the nonconformity, and gives you the option of keeping the use of the vehicle until you are tendered a full refund or a replacement of comparable value.

Arkansas lemon law: frequently asked questions

How much can I recover under the Arkansas lemon law?

A repurchase refunds the full purchase price or lease price, less a reasonable offset for use and for physical damage, plus all collateral and reasonably incurred incidental charges. The use offset is set by a formula in the statute; the physical-damage offset has no amount in the Act. Run your numbers through our calculator to see a personalized estimate.

How is the mileage deduction calculated in Arkansas?

It is the actual price of the new vehicle paid or payable, including transportation charges and manufacturer-installed or agent-installed options, multiplied by a fraction. The numerator is the miles the vehicle traveled before you first delivered it to the manufacturer, its agent or an authorized dealer for the problem, and the denominator is 120,000. Miles driven after that first delivery for repair are not part of the formula.

Do I get my sales tax and finance charges back?

The Act defines collateral charges to include sales taxes, title charges, earned finance charges, installed items and extended-warranty charges, and the replacement or refund includes payment of all collateral charges. A Department of Finance and Administration page, which is guidance rather than law, says that when the manufacturer refunds sales tax to the consumer, the manufacturer is entitled to a refund from that office.

Do I have to pay my attorney out of my recovery?

A consumer who prevails in a legal proceeding under the Act recovers, as part of the judgment, the costs and expenses reasonably incurred in bringing the action, including attorney’s fees based on actual time expended. Whether a particular attorney works on contingency is a matter between you and that attorney.

Can I choose a replacement vehicle instead of a refund?

A replacement must be acceptable to you and identical or reasonably equivalent to the vehicle replaced, and you pay a reasonable offset for use when you receive it. You have an unconditional right to choose a refund rather than a replacement. The manufacturer must act within 40 days.

Does Arkansas add extra damages on top of the refund?

The Act itself provides no multiplied damages. A violation of the Act is deemed a deceptive trade practice (Ark. Code § 4-90-417), and the Act does not limit the rights and remedies you have under other law (§ 4-90-415(b)). A lawyer can tell you whether any of them fit your facts.

How does the refund work if I lease?

The lessee receives the lessee cost, the deposit and rental payments paid to the lessor, less a reasonable offset for use; the lessor receives the lease price less those payments. The lease ends on payment of the refund and no early-termination penalty may be assessed. The Act does not say what the lessee’s offset multiplies, so the calculator takes it on the vehicle price you enter (the Act’s use-offset formula multiplies "the actual price of the new motor vehicle paid or payable"), or on the amounts you paid if you enter none; the lease figure is an approximation and the lessor’s share is not computed.

What happens to my trade-in and the sales tax?

The purchase price includes any net allowance for a trade-in vehicle. The Department of Finance and Administration page, which is guidance rather than law, says a consumer with a trade-in is entitled to a voucher, valid for 6 months, that lets the same trade allowance reduce the sale price of a replacement vehicle for sales-tax purposes.