Michigan Lemon Law Refund Calculator

How the Michigan buyback is calculated

Under the Michigan Lemon Law.

• Once a reasonable number of repairs has been reached and the defect continues to exist, the manufacturer must within 30 days replace the vehicle with a comparable one you accept or take it back and refund the purchase price; "A consumer shall have the right to demand a refund" (MCL 257.1403(1)). A lessee has the right to "a refund of the lease price paid by the consumer". The Act gives no formula for that, so the lease estimate adds what you paid in (cap-cost reduction, payments, deposit) as an approximation.
• The refund starts from "the actual vehicle sales price listed on the buyer's order", including any cash payment and any trade-in allowance, plus the sales tax, license and registration fees and similar government charges you paid (MCL 257.1401(l)). It adds options and modifications installed by or for the manufacturer and "all other charges made by or for the manufacturer" (MCL 257.1403(2)). A manufacturer-to-consumer rebate or incentive and "debt from any other transaction" are excluded. The Act does not say whether loan finance charges are included, so the estimate leaves them out.
• The refund is reduced by a reasonable allowance for your use: the price multiplied by a fraction whose denominator is 100,000 miles and whose numerator is the miles driven before your first report of the defect, plus all mileage beyond 25,000 (MCL 257.1403(2)). On a $35,000 vehicle first reported at 8,000 miles and refunded at 30,000 miles, that is (8,000 + 5,000) / 100,000 x $35,000 = $4,550. The calculator applies it to the price plus options and reads the odometer at your first repair as your first report. A court or a qualifying dispute procedure may reduce the deduction for miles beyond 25,000 if the vehicle did not provide reliable transportation (MCL 257.1403(3)).
• The refund is also reduced by "any appraised damage that is not attributable to normal use or to the defect or condition" (MCL 257.1403(2)); enter it if you know it. The Act does not say whether the use allowance applies to a replacement vehicle, so this estimate is for a refund.
• If towing services and rental vehicles were not made available without cost to you, the manufacturer must also reimburse your towing costs and the reasonable costs of a comparable rental vehicle that came directly from the defect (MCL 257.1403(2)). Enter those in the towing and rental field; other out-of-pocket costs are not in the Act's refund.
• The refund is paid to you and your lender as your interests exist when it is made, and a lessor may not charge an early-termination fee (MCL 257.1403(4)). The Act has no civil-penalty or multiplied-damages provision. A consumer who prevails in an action "may be allowed by the court" costs and attorney fees, "unless the court in its discretion shall determine that such an award of attorneys' fees would be inappropriate" (MCL 257.1407(2)); this estimate does not add or subtract them.

Michigan lemon law: frequently asked questions

How much can I recover under the Michigan lemon law?

A refund of the purchase price (or the lease price you paid), plus options and the manufacturer's charges and the sales tax, license and registration fees and similar government charges you paid, less the allowance for use and any appraised damage not due to normal use or the defect. Towing and rental costs the manufacturer did not provide free are reimbursed on top (MCL 257.1403(1)-(2)). Run your numbers through the calculator to see an estimate.

How does the mileage deduction work?

The deduction is the price multiplied by a fraction. The denominator is 100,000 miles. The numerator is the miles driven before you first reported the defect, plus all miles beyond 25,000 (MCL 257.1403(2)). On a $35,000 vehicle first reported at 8,000 miles and refunded at 30,000 miles, the deduction is (8,000 + 5,000) / 100,000 x $35,000 = $4,550.

Should I take a refund or a replacement vehicle?

The Act says "A consumer shall have the right to demand a refund", and a replacement must be a "comparable replacement motor vehicle currently in production and acceptable to the consumer" (MCL 257.1403(1)(a)). It does not say whether the use allowance applies to a replacement, so the calculator estimates a refund only.

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

The Act lets a court allow a consumer who prevails to recover costs and expenses, including attorney fees "based on actual time expended", as part of the judgment, unless the court decides such an award would be inappropriate (MCL 257.1407(2)). The estimate shows the refund only and does not subtract fees. What you owe your own attorney depends on your agreement with the attorney.

What must I do before I can claim the refund?

Before you claim a remedy, you or your representative must give the manufacturer written notice "by return receipt service": any time after the third repair attempt of the same defect, or after the vehicle has been out of service at least 25 days. The manufacturer then names a reasonably accessible repair facility and has 5 business days after delivery of the vehicle there to repair it (MCL 257.1403(5)). If the manufacturer has a qualifying informal dispute procedure, the Act does not apply to a consumer who has not first used it (MCL 257.1405).