Tesla’s Buyback Policy: What You Need to Know as a Tesla Owner

Tesla is a famous brand known for its top-of-the-range Electric Vehicles. The company’s history of electric vehicles excites consumers, with cars having higher battery life and exciting features. However, some of its models do not fulfill the expectations of consumers.

For instance, consumers have raised approximately 493 NHTSA complaints about the 2021 Tesla Model Y regarding a defective forward collision avoidance component. The manufacturer has also issued several recall notices regarding the defect.

When a manufacturer issues a recall— sometimes dubbed as a buyback policy, it comes with conditions. As a result, it leaves out numerous consumers who deserve compensation for the inconvenience and expenses involved in owning a defective Tesla.

Fortunately, California lemon law protects consumers who buy defective vehicles with persistent issues that have proved challenging to solve in the hands of automakers.

If you’re stuck with a defective Tesla, consider consulting a California lemon law attorney about Tesla Buyback Policy and other legal options.

Tesla`s Buyback Policy: Understanding Your Rights as an Owner

California lemon laws were enacted courtesy of the Song-Beverly Consumer Warranty Act under California Civil Code commencing section 1790. It requires that a manufacturer or its representative that cannot repair a purchased or leased vehicle conform to its written warranty after a reasonable number of attempts to repurchase or replace it promptly.

These laws are called lemon laws because “lemon” is slang for a defective vehicle.

What Makes a Tesla Eligible for a Buyback?

Lemon laws apply to new and used Teslas with a manufacturer’s new vehicle warranty. 

Examples of such vehicles include:

  • Cars, vans, SUVs, and pick-up trucks
  • Dealer-owned vehicles and demonstrators
  • Vehicles primarily bought or leased for household, family, or personal use
  • Vehicle purchased or hired for commercial reasons

More importantly, if the dealer or manufacturer can’t fix a defect after a ‘’reasonable number of attempts,’’ the manufacturer must replace or refund the vehicle’s buying price. 

So, how can you determine if Tesla has made a reasonable attempt to fix a defect in your vehicle?

How to Establish a ‘’Reasonable Number of Repair Attempts’’

In a dispute during lemon law claims, a question always arises whether a consumer gave a manufacturer a reasonable time frame or opportunity to fix the defect. A consumer should allow a manufacturer at least two attempts to fix the fault. 

For instance, you don’t need to give a manufacturer more than two attempts to fix a defective brake system. Allowing many attempts risks your safety and other road users. A manufacturer is permitted four or more tries in other defects with a twist of annoyance or nuisance.

How a manufacturer addresses a vehicle defect plays a crucial role as well. For instance, if you take a vehicle for repairs and the dealer can’t duplicate the problem, you should take it up to six times to improve your chances of success while processing a claim.

In a nutshell, there is no set number for a reasonable number of repair attempts. Even so, California lemon law presumption offers the following guidelines to establish if a manufacturer has made an appropriate number of repair attempts:

  • The manufacturer or dealer hasn’t solved the defect after four or more repair attempts.
  • The vehicle could cause death or serious bodily injury if driven, and the manufacturer has made two unsuccessful repair attempts.
  • The vehicle has been in the repair shop for more than 30 days, not necessarily consecutive, for vehicle defects covered by a warranty.

Note: California lemon law presumption applies if a defect arises within 18 months of the vehicle’s lease/purchase or 18 months, whichever comes first.

Substantial Defects in Defective Tesla Cars

A vehicle is considered a lemon if it has substantial defects impacting its value, use, and safety. Even so, California lemon laws assess the term ‘substantial’ objectively. In addition, a considerable malfunction makes a vehicle fail to conform to its manufacturer’s warranty.

Insignificant defects that annoy, e.g., a noisy windshield, may not be covered by lemon laws. In addition, lemon laws do not protect the vehicle defects caused by consumer actions. Although a fault must affect the vehicle’s value, use, and safety, it doesn’t have to be immobile to be considered a lemon.

Here is the classification of defects covered by lemon laws according to impact.

A Defect That Impairs Vehicle Use

A Tesla’s malfunction has to affect the reliability and use of the vehicle to qualify for a buyback. However, it doesn’t mean the care needs to be completely undrivable. A vehicle defect can impact its use depending on its severity and type.

Here’s how a vehicle defect affects its use:

  • Reduced Performance: Suppose you bought a Tesla truck to move your working tools and materials across different states. However, it develops a transmission defect that makes it challenging to shift gears and impossible to drive long distances. Although the vehicle works perfectly in short distances, it’s no longer helpful for assignments out of town, making it a lemon.
  • Frequent Breakdown: A malfunctioning part often leads to frequent breakdowns. For instance, if the vehicle has engine defects, it will struggle to run at its usual level. It may also stall or jerk at high speed and struggle uphill, making it less reliable.

A Defect That Impairs Vehicle’s Value

A vehicle can lose value in your eyes and potential buyers. Imagine you’ve just bought the latest Model X Plaid, and you’re the talk of your neighborhood. However, it quickly develops a problem characterized by failure to ignite. It also jerks or stalls without notice as you drive to or out of work.

In addition to being less reliable, it has lost value because it’s likely to embarrass you as you drive it down the street.

Additional ways that vehicles lose value due to defects include:

  • Faster Depreciation: A vehicle with a persistent defect depreciates faster than a standard vehicle. First, potential buyers are less interested in buying the model, which reduces its demand and, consequently, its price. In addition, any vehicle defects have a ripple effect which is the origin of issues with other vehicle components.
  • Poor Perception: Tesla models with persistent issues receive low-quality ratings in the market. Although it’s possible to fix the defect, potential buyers still associate the vehicle with low quality and possible problems in the future. Ultimately, the poor market perception affects its value as buyers are less willing to buy cars with a history of defects.

Impairs Vehicle Safety

Any defect that makes the driver, vehicle occupants, and other road users less secure qualifies as a lemon vehicle. Suppose your Tesla has a battery defect that exposes the vehicle occupants to fire hazards, and the dealership has failed to repair it. 

In that case, you may be eligible for a buyback.

Examples of safety defects include:

  • Defective Seat Belts: A safety belt offers the first line of defense in case of an accident or collision. According to the CDC, vehicle occupants are 30 times more likely to be ejected from a vehicle in case of a crash, with 75% of vehicle occupants likely to die from the injuries. A defective seat belt doesn’t protect passengers and may cause bruises, abrasions, and vertebral fractures.
  • Defective Steering Wheel: A steering wheel is an essential vehicle component that directs a vehicle. A faulty car makes it difficult to control and avoid road hazards. Tesla vehicles with defective steering wheels have symptoms such as difficulty steering, steering wheel vibrations, and grinding and screeching noise while steering.
  • Defective Headlights: Driving a vehicle with faulty headlights seriously affects your visibility and safety on the road. Although driving in rainy conditions seems impossible during the day, it’s worse at night. You, therefore, need a fully functional headlight to navigate poor weather conditions.

Vehicle Defects That Are Not Eligible for Lemon Law Buyback

While most defects are eligible for buybacks under lemon laws, a few exceptions exist.

Here are the Tesla defects that are not eligible for buybacks:

  • Defects Caused By Accidents: A car accident is often the cause of an additional defect even after undergoing repairs. Even if the warranty covers the defective part, lemon laws do not protect the default that arises due to the accident.
  • Defects Due An-authorized Repairs of Alterations: It’s always advisable to take your vehicle for repairs to an authorized dealer when it’s still under warranty. If you attempt to make the repairs independently or use a ‘local’ repair shop, you could void your warranty and lemon law protection.
  • Defects Due Owner Negligence: Although lemon laws protect consumers against defective vehicles, they must fulfill their warranty obligations, which include proper care and maintenance. For instance, if a Tesla develops an engine problem because of failure to change the cabin air filter, the consumer cannot claim a buyback under the lemon law.

Tesla Buyback vs. Lemon Law: Which Option Is Right for You?

Tesla’s buyback program was designed to protect consumers who buy premium vehicles from losing out due to a poor resale value. A typical buyer of premium Tesla models upgrades it after a few years, making resale value a vital consideration.

Under the program, Tesla calculated the resale value based on 50% of the buying price plus 43% of all value options added to the vehicle. However, Tesla recently ended the buyback program, citing cash flow constraints and the need to free up resources for other priorities.

With that in mind, Tesla’s buyback program falls short of the ability to protect consumer rights guaranteed by California lemon laws.

Fortunately, you can opt for the protection provided by California lemon laws which have better guarantees.

Here are the advantages of lemon law protection:

  • Your Car’s Warranty Doesn’t Need to be Current: California lemon laws apply to lemon vehicles, including Tesla models repaired under warranty. Therefore, if you took a Tesla model for repairs under warranty, you may still have a claim under lemon laws even if the express warranty has since expired.
  • You’re Free to Use the Buyback Proceeds: Lemon law buyback refunds consumers the buying price less ‘usage fee’ plus incidental and attorney fees. Consumers can use the proceeds to buy Tesla models or other vehicle brands or however they like.
  • Lemon Law Is Not an Offer: Most automakers’ buyback programs last for a limited time, which locks out many consumers unaware of the program. For instance, Tesla reserves the right to change, modify, or terminate the Tesla Buyback program without notice. On the contrary, the Lemon law buyback program is always open for aggrieved buyers to utilize it.

Ultimately, lemon law offers more lasting benefits to consumers than the Tesla Buyback Program. Therefore, you stand a better chance of compensation under lemon law than the Tesla Buyback program.

The Tesla Buyback Process: How to Initiate a Buyback Request and What to Expect

Model S, X, and Y are problematic Tesla vehicles consumers have lodged numerous complaints about. Fortunately, California lemon laws protect consumers who buy defective products that manufacturers are unable to fix after a reasonable number of attempts.

Lemon law buyback is a complex process, highlighting the need for consumers to understand all the steps involved to get their defective vehicle refunded.

Here are the crucial steps involved in the process.

Take Your Tesla Model to the Dealership for Repairs

Whether your Tesla has problems with its battery, charging system, or cruise control, you must take the vehicle to a dealership for repairs. Sometimes consumers delay looking for a solution that might worsen the defect or waive their buyback rights under lemon laws.

Taking your vehicle for repairs to a dealership serves various reasons. First, it gives the manufacturer a window of opportunity ‘’a reasonable number of attempts’’ to fix the defect. It also serves as a notice of the fault to the manufacturer— a consumer can only find a defect they’re aware of.

Lastly, taking your vehicle to a manufacturer reserves your rights under lemon laws. You risk voiding warranty terms if you attempt to fix the defect through Do-It-Yourself (DIY) or an independent repair shop.

Give the Dealership A Reasonable Number of Attempts to Fix the Defect

Every time a consumer files a buyback claim, the question of a “reasonable number of repair attempts” arises. With that in mind, every consumer must inform the manufacturer about the defect and give them a reasonable window to fix it.

What constitutes a reasonable number of repair attempts varies under different circumstances. For instance, a manufacturer may need more attempts to fix a severe defect. The vehicle may also spend extra days in the dealership to fix the fault.

Ultimately, the guidelines established by the California lemon law presumption set the ground for determining whether a manufacturer has made a reasonable number of repair attempts.

Because the standards for determining a reasonable number of repair attempts are subjective, it’s advisable to consult a California lemon law attorney. In a dispute, whether a manufacturer has made a reasonable number of repair attempts is a decision made by a judge or arbitrator.

Gather All Relevant Documentation

Proving that you provided a manufacturer with a reasonable window to fix the defect is a significant challenge while filing a lemon law claim. As such, any legal claim, including lemon law claims, is more potent when backed with evidence. 

Below is a list of the most relevant documents you need to file a lemon law claim. 

The more these documents you have, the easier it is to file and build a strong case against a manufacturer. Speaking to a California lemon law attorney who can help you gather proper documentation is also advisable.

Manufacturer’s Warranty

You’ll need a manufacturer’s warranty, part of the documents with the owner’s manual booklet. It contains the express warranty with details of coverage and for how long. In addition to the features covered, it allocates duties to buyers, including regular maintenance such as cabin air replacement every two years. 

Each warranty is unique regarding coverage and period, so the document is crucial in determining whether your Tesla was protected the first time you took it for repairs. More importantly, if you’re not eligible for a buyback under lemon laws, you can sue the manufacturer for breach of warranty terms.

Purchase and Lease Documents

The first documents your lawyers will request are the original purchase or lease contracts. These are the documents you usually receive the first time you purchase or lease a new or used Tesla.  

This document verifies ownership or interest in the vehicle due for a buyback. It also provides critical information on the date of sale, vehicle cost, trade-in information, and rebates—if any. The purchase and lease documents directly impact the buyback value, highlighting the importance of including the purchase contract.

It’s also essential to include the financing documents for your auto loan.

Repair Order

A repair order is a document you receive after dropping off your vehicle for repairs at a dealership. It describes the car you brought in for repairs, the vehicle’s problem, and the mileage at the time you brought it in. Ensure you accurately describe the vehicle’s defect in detail so that the dealer captures it appropriately in the repair order.

If this is not the first time the vehicle has experienced the defect, let the repair order capture it as a repeat problem instead of appearing as a new issue. Ultimately, a repair order serves as a paper trail for all the problems with the vehicle and everything you attempted to have repaired.

Repair Invoice

A repair invoice is a document the repair facility gives you when you drop off your Tesla for repairs. It is similar to a repair order as it describes all repairs the dealership attempted to fix and the problems described during the drop-off. 

Ensure it accurately describes the vehicle defects, completed repairs, date, mileage, and cost of repairs. Each time you take your Tesla for repairs, request a repair invoice and a repair order as part of the documents required to prove you gave a manufacturer an opportunity for a reasonable number of repair attempts.

Correspondence and Notes

Keep copies of the letters you sent or received from the manufacturer, dealership, or federal agency. It’s also important to write notes if anything happens to the vehicle. For instance, note the dates and details of a phone conversation with a manufacturer. If a dealership refuses to add details to your repair order, note it down.  

Additional Documentation

While the above documents are crucial, you can supplement your case with additional documents such as vehicle registration, accident history, a timeline or repair attempts, and receipts of incidental expenses such as accommodation or car rental.

Hire an Experienced California Lemon Law Attorney

Once you’ve gathered a few documents, it’s time to speak with a lemon law attorney. Usually, filing a lemon law claim is a complex process highlighting the need for an expert who, in this case, is a California lemon law attorney.

Here’s how working with an attorney will boost your chances in a buyback claim:;

  • Tap Into Attorney’s Wide Legal Knowledge: A lemon law attorney has accumulated years of experience dealing with different cases. The years of experience have helped them develop valuable strategies for winning cases. As you launch the case, an attorney will advise on whether your case merits a buyback claim.
  • Maximize the Settlement Value: The automaker always looks out for their interest during negotiation. In that regard, they can go to any lengths, including hiring the best defense attorneys to reduce the settlement as far as possible. A lemon law attorney holds manufacturers accountable by countering misleading claims against the consumer. They also understand how far a manufacturer will compensate consumers within lemon laws. More importantly, they negotiate with the manufacturer for a more generous settlement.
  • No Fees: Most lemon law attorneys work on a contingency basis— which translates to a commission based on the value of a settlement. In addition, lemon laws require manufacturers to refund attorney fees incurred by consumers while pursuing the buyback request. You, therefore, benefit from legal representation whether you have funds or not.
  • Peace of Mind: It is not easy to negotiate with a giant automaker, an exercise that can prove stressful. Fortunately, you can hand over the entire process to an attorney giving you peace of mind.

File a BuyBack Claim

If the vehicle defect is valid, your attorney will file a claim or complaint against Tesla to initiate the Buyback Process. Filing a lawsuit against the manufacturer also helps assert your rights under California lemon law. 

Generally, manufacturers do not accept claims immediately after a consumer makes a complaint. You must present evidence and prove your case highlighting the need to work with an experienced lemon law attorney.

Negotiate a Settlement

If a manufacturer finds you have a valid claim, they will table the initial offer. Upon receiving the proposal, your attorney will commence negotiations. The manufacturer will settle if the negotiation efforts are successful and you’re satisfied with an improved offer. 

Most experienced attorneys work with automakers to strike deals during negotiations to avoid the lengthy and time-consuming court process. However, a consumer can accept or reject the offer, highlighting the need to work with an attorney ready to aggressively fight for you in court.

Proceed to Trial

If a manufacturer refuses to settle after presenting a lemon law claim, you will likely proceed to court. It’s also within your right to seek court intervention if you feel the manufacturer has tabled an insufficient offer. 

A trial is a complex, lengthy, and time-consuming process, highlighting the need to work with an experienced attorney who will represent your interest in court. 

What to Expect in a Tesla Buyback Process

When a Tesla is considered a lemon, the automaker can replace or repurchase it. The vehicle receives a branded title, meaning it will be marked as a lemon once the manufacturer buys it.

In a buyback, lemon law requires manufacturers to refund consumers the vehicle’s buying price less mileage offset. Mileage offset (usage fee) is the distance the car traveled before the first time the vehicle went in for a warranty repair. 

If the vehicle was loan financed, the manufacturer must refund the consumer the entire down payment plus monthly payments.  

The manufacturer must also refund attorney fees, license fees, taxes, and registration fees. An automaker must also reimburse the following incidental charges:

  • Accommodation fees
  • Rental car charges
  • Towing fees
  • Damage to personal property

Break Free From a Defective Tesla By Speaking to an Experienced California Lemon Law Attorney

It might shock you if you expected to enjoy your new Tesla ride. If it turns out to be a lemon, you’ll constantly drop it in the dealership for repairs. It’ll also prove challenging to plan for personal or business trips.

That said, you deserve the best representation as you pursue a refund(buyback) from Tesla to improve your chances of success.

At LemonLaw123, we have experienced and highly knowledgeable attorneys ready to aggressively fight for your rights.

Contact us online or call us at 657.529.5239 for a free case review.

Valerie G. Fernandez Campbell

Valerie G. Fernandez Campbell, known as The Lemon Law Lady, has dedicated her entire legal career to the specialized field of Lemon Law, a journey that began immediately after her
graduation from UCLA School of Law.

With a 99% success rate and a policy of no fees unless you win, her practice stands as a testament to her expertise in California’s Lemon Law, her commitment to her clients, and her unwavering dedication to justice and consumer rights.

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