Iowa Lemon Law Refund Calculator

How the Iowa buyback is calculated

Under the Iowa Lemon Law.

• Under the Iowa Lemon Law (Iowa Code chapter 322G), if the manufacturer has not conformed your vehicle to the warranty after a reasonable number of attempts, it must replace the vehicle or repurchase it and refund the full purchase or lease price, less a reasonable offset for use. You have an unconditional right to choose a refund rather than a replacement.
• The offset for use has a statutory formula: the miles attributable to you up to the earliest of the third repair attempt for the same defect, the first attempt for a defect likely to cause death or serious bodily injury, or the twentieth cumulative day out of service, multiplied by the purchase price, and divided by 120,000. Enter your odometer at that cut-off (less any miles before delivery); if you leave it out, the calculator uses the odometer at your first repair, so your offset will be higher if the statutory cut-off came later.
• For example, on a $30,000 vehicle with 6,000 miles at that cut-off point, the offset is 6,000 times $30,000, divided by 120,000, or $1,500. If you choose a refund and it exceeds the offset, the manufacturer deducts the offset from the refund rather than making you pay it in advance.
• The refund also includes all collateral charges (manufacturer- or agent-installed items, earned finance charges, use taxes and title charges) and reasonably incurred incidental charges such as towing and alternative transportation. Incidental charges do not include loss of use, loss of income or personal injury claims.
• For a lease, the lessee receives the lessee cost (the deposit and rental payments paid) less the offset, which the statute takes on the lessor’s actual lease price plus 2 percent of the purchase price (enter the lessor’s lease price and the purchase price in the lease section; without the lease price the offset is taken on what you paid and is understated); the lessor receives the lease price less what you paid, and no early-termination penalty may be assessed.
• If you go to court under § 322G.8(1) or (2) and win, the court awards pecuniary loss, reasonable attorney’s fees and costs. Iowa’s multiplied award is narrow: the court shall double, and may triple, the total award only if a court finds the manufacturer’s appeal of a certified dispute-program decision was in bad faith or solely for harassment.

Iowa lemon law: frequently asked questions

How much can I recover under the Iowa lemon law?

The refund is the full purchase or lease price less a reasonable offset for use, plus all collateral charges (installed items, earned finance charges, use taxes, title charges) and reasonably incurred incidental charges. The offset is your miles up to the earliest cut-off point, times the purchase price, divided by 120,000. Run your numbers through our calculator for a personalized estimate.

How is the Iowa offset for use calculated?

Iowa Code § 322G.2(18) counts the miles attributable to a consumer up to the date of the third attempt to repair the same defect, the first attempt to repair a defect likely to cause death or serious bodily injury, or the twentieth cumulative day out of service, whichever occurs first. That number is multiplied by the purchase price and divided by 120,000. For a lease, the lessor’s actual lease price plus 2 percent of the purchase price replaces the purchase price.

Can I choose a refund instead of a replacement?

Yes. Iowa Code § 322G.4(2) says the consumer has an unconditional right to choose a refund rather than a replacement. If you choose a replacement, the manufacturer must provide a substitute vehicle until the replacement is delivered.

Does the manufacturer pay my attorney?

In an action under § 322G.8(1) or (2), the court awards a consumer who prevails the amount of any pecuniary loss, reasonable attorney’s fees and costs (Iowa Code § 322G.8(3)). Fee amounts are set by the court.

Is there a penalty if the manufacturer acts in bad faith?

Only in a narrow case. If a court upholds a certified dispute-program decision in your favor, you recover continuing damages of $25 per day for days beyond twenty-five days after the manufacturer receives your acceptance. If the court finds the manufacturer’s appeal was in bad faith or solely for harassment, it shall double, and may triple, the total award (Iowa Code § 322G.8(7)).