Kentucky Lemon Law Refund Calculator

How the Kentucky buyback is calculated

Under the Kentucky New Motor Vehicle Lemon Law.

• Under KRS 367.842, if within the first 12,000 miles or 12 months after delivery, whichever is earlier, the manufacturer cannot fix a defect that substantially impairs the use, value, or safety of a new vehicle after a reasonable number of attempts, the manufacturer, at your option, replaces the vehicle with a comparable one or takes it back and refunds the full purchase price.
• The full purchase price includes the amount paid for the vehicle, the finance charge, all sales tax, the license fee, the registration fee and any similar governmental charges, plus all collateral charges. The statute does not define "collateral charges", so the calculator has one input for them and leaves it to you to say what goes in it.
• Kentucky buyers pay a motor vehicle usage tax at titling. When a manufacturer refunds the price within 90 days, or after arbitration, litigation or an order of a dispute resolution system, the purchaser is entitled to a refund of that tax from the department that received it, on a report from the manufacturer identifying the vehicle (KRS 138.460(10), (11)). The calculator shows it as its own line, so it is not counted twice.
• The refund is reduced by a reasonable allowance for your use of the vehicle. The law defines that allowance as the amount directly attributable to your use, other than the time the vehicle was out of service because of the defect. It gives no per-mile or percentage formula.
• Because the statute sets no formula, this calculator takes no deduction for use. Treat the result as the figure before any use allowance: the real figure will be lower by whatever allowance the manufacturer, the dispute program or a court accepts.
• A refund is paid to you and the lienholder as their interests appear on the records of ownership kept by the Department of Vehicle Regulation. Unless the lienholder consents to a replacement lien, it is paid in full the amount due on the lien before a refund is made to you.
• A lease of a new vehicle is covered ("buyer" means the lessor, lessee, or both), but the statute gives no formula for dividing a lease refund. The lease figures here use the shared lease amounts and are an approximation.

Kentucky lemon law: frequently asked questions

What does a Kentucky lemon law refund include?

The full purchase price: the amount paid for the vehicle, the finance charge, all sales tax, the license fee, the registration fee and any similar governmental charges, plus all collateral charges, less a reasonable allowance for your use (KRS 367.842(2)). The statute does not define collateral charges. The usage tax paid at titling is refunded by the department that received it (KRS 138.460(10), (11)).

How is the deduction for my use of the vehicle calculated?

The statute defines the "reasonable allowance for use" as the amount directly attributable to your use of the vehicle, other than the time it was out of service due to the defect (KRS 367.841(7)). It gives no per-mile or percentage formula, so the amount is open to dispute and our estimate does not subtract one.

Do I choose between a replacement and a refund?

Yes. The manufacturer must replace the vehicle with a comparable motor vehicle or accept its return and refund the full purchase price, at the option of the buyer (KRS 367.842(2)).

Can I get extra damages or a penalty multiplier?

The lemon law itself, KRS 367.840 to 367.846, states no multiplied damages or penalties. The court action is brought under KRS 367.220 (KRS 367.843), which does not limit the right to seek punitive damages where appropriate. A court may award reasonable attorney’s fees to a prevailing plaintiff (KRS 367.842(9)); KRS 367.220(3) also lets the court award fees and costs to "the prevailing party".

Do I have to use the manufacturer’s dispute program first?

Yes. A dispute about refund or replacement must be resolved through the dispute resolution system under KRS 367.860 to 367.870, or a federal Part 703 system, and that remedy is to be pursued before seeking any judicial relief (KRS 367.842(4)). Any court action must be commenced within two years after original delivery (KRS 367.842(8)).