We receive telephone calls every day from people who are sick and tired of taking their new car to the dealership for repairs and sadly, by the time some folks call us, they have already traded their lemon in for something new. It is completely understandable to want to get rid of a vehicle that is nothing but trouble. However, by trading the vehicle in, you may be leaving quite a bit of money on the table.
Generally speaking, a new car depreciates the minute that you drive it out of the selling dealership’s parking lot. According to CarsDirect.com, when you drive a car off the lot, you have agreed to pay the dealer a certain amount of money for the car. Even if you only drive it down the road and change your mind, you are now looking at a car that is only worth the wholesale value. The wholesale value is always less than the original retail value of the car. For a brand new car this initial depreciation can be in the thousands.
When you take a vehicle to a dealership to trade it in, you are given the trade-in value, which is always less than the amount you could have gotten by selling your vehicle to a private party. However, when your vehicle has had a lot of repairs, you are not likely to want to sell it to a private party because you would have to tell the potential buyer about all of the problems that the vehicle has had. Once a potential buyer hears about a laundry list of repairs, they will not be likely to purchase that vehicle. Or, if you do not disclose the vehicle’s problems to a potential buyer and they buy your vehicle thinking it is in great working order, they may come back and try to recover their money from you later in court.
If you take the trade in value of your vehicle, you are taking a big financial hit. According to CarsDirect.com, a new car depreciates, or loses value, almost immediately after you drive it off a dealer’s lot. As a quick rule of thumb, a car will lose between 15% and 20% of its value each year according to Bankrate.com, a car in its second year will be worth 80% to 85% of its first year value and a car in its third year will be worth 80% to 85% of its second-year value.
However, in a lemon law claim, if the manufacturer buys your vehicle back, you are refunded for the down payment, all of your monthly payments, your current registration fee, any towing or rental car fees, and your entire loan balance will be paid off in full by the manufacturer. The only amounts that may be deducted from your refund are aftermarket items that were added to the vehicle’s purchase at the time of the sale such as gap insurance or service contracts, and the mileage offset which is a credit to the manufacturer for the good miles on the vehicle before the problems began.
Even if the manufacturer does not repurchase your vehicle, we may still be able to obtain a “cash and keep” settlement for you. In this type of a settlement, the manufacturer will pay you a few thousand dollars and you can keep the vehicle or dispose of it as you see fit. You can still trade your car in for something else, but at least you will have a few thousand dollars from the manufacturer to help make up for the fact that you are only getting the trade-in value for the vehicle.
If you think that you are driving a lemon, please call us today for a free case evaluation at (855) 595-3666. Our services are free to you and we are here to help!