Louisiana Lemon Law Buyback: Credit Only Where Credit Is Due | Nordgren Law: Automotive Litigation and Lemon Law

Louisiana lemon law protects consumers who purchase defective vehicles; however, the protection afforded depends on the extent of the defect.  If mechanical problems don’t render the vehicle absolutely useless but there are defects nonetheless, a purchaser is entitled to a reduction in the sale price. On the other hand, when defects are so severe they do render the vehicle useless, a buyer may be entitled to rescind the sale through a “buyback”. This remedy essentially puts the buyer back in the same financial position they were in before the sale.

But what if the buyer managed to get significant use of the vehicle before things went south? In that instance, the seller could be entitled to recover what is called a “credit for use”. This credit is based upon the idea that even though defects rendered the vehicle useless, the buyer still derived some benefit from it. Thus, a seller “may be allowed credit for such use” and value the consumer realized.

Perhaps the most important element of this particular nook of Louisiana Law lies in the word “may”. This means  the seller “may” be entitled to this credit for use but it isn’t automatic. What’s more, when a credit is owed, there’s no rigid formula to help courts determine how much credit a seller is due. It’s the seller’s burden to make the argument and the consumer’s burden to counter it.

Some courts have granted a credit for use based on a formula tied to how many miles the buyer put on a vehicle, while others have come up with an amount that seemingly has no relationship to how much the vehicle was used.

Many courts have declined to grant the seller any credit despite extensive use by the buyer. These courts have determined that the “value of an extensive use may be overridden by great inconveniences incurred because of the defective nature of the thing and constant interruptions in service caused by the seller’s attempts to repair” it. In one of many notable Louisiana cases, the court ruled that a seller was not entitled to any credit for use, despite the fact the buyer had driven the car roughly 45,000 miles. According to the court, this was because “any value derived from the use of the vehicle was greatly outweighed by the inconvenience caused” because of its defects.

In a nutshell, even if you manage to put substantial mileage and get quite a bit of use out of your vehicle, if that use was repeatedly burdened with breakdowns, trips to the service center and warranty repairs, a seller’s argument to reduce the buyer’s recovery can be significantly limited or even eliminated. This is why you need to contact an experienced attorney who is well-versed in the nuances of Louisiana Lemon Law if your new vehicle turns out to be a lemon.