What Is A ‘Cash and Keep’ Settlement in California Lemon Law?


When you purchase a vehicle, you have certain expectations. You expect it to start when you turn the key, operate seamlessly, and provide you with reliable transportation. Unfortunately, not all vehicles live up to these expectations.

Sometimes, you may find yourself the owner of a lemon – a car that just doesn’t work right.

That’s why lemon laws exist, to protect consumers who purchase or lease vehicles that turn out to be faulty. If you have a lemon vehicle, you may be eligible for a buyback or vehicle replacement.

To qualify as a lemon under California lemon law, a vehicle must:

• Be covered under the manufacturer or dealer warranty when the defect or nonconformity was first reported; and
• Have one or more defects/nonconformities that substantially impair the vehicle’s use, value, or safety; and
• Have been subjected to a reasonable number of repair attempts by a manufacturer-certified facility to fix the defect/nonconformity; or
• Have been out of service for repairs on one or more defects/nonconformities for at least 30 days; and
• The defect or nonconformity must not have been caused by driver abuse or neglect.

Of course, manufacturers have a global reputation to protect. They prefer to avoid the negative statistics and costs of a lemon law case however possible. That’s why some manufacturers may offer what’s known as a ‘cash and keep’ settlement.

So, should you take this offer? Here’s what you need to know.

What is a “Cash and Keep” Settlement?

With cash and keep settlements, the manufacturer will offer you a lump sum of cash to keep your vehicle, rather than going through the legal process. The amount of the offer will depend on various factors.

For one, some manufacturers offer larger amounts of cash settlements than others. Additionally, the value of your vehicle will play a role in how much you’re offered. The older the car and the more miles it has, the lower the offer will likely be.

Non-conformities or defects may also play a role in the size of your settlement. The more serious the problem is, the more you may be able to negotiate.

Should a Consumer Sign a Cash and Keep Settlement?

First, you need to understand that you are forfeiting your right to take future legal action against the manufacturer by taking this settlement. That means if additional issues arise in the future, you will not be able to take any legal action.

You should also be aware that these settlements are almost always offered well before a case goes to trial. That means the manufacturer may not have had to spend much – if anything – on legal fees. You, on the other hand, will have likely incurred some legal costs.

It’s also important to remember that you’re not required to accept the first offer made. If you’re unhappy with the amount of money being offered, you can try to negotiate for a higher amount. You may also want to consult with an attorney to see if the offer is fair.

Finally, if you decide to accept a cash and keep settlement, make sure you get the offer in writing before you sign anything. This will help protect your rights and ensure that you actually receive the agreed-upon amount of money.

What’s Your Best Option?

In most cases with a defective vehicle, it’s best to pursue options within the U.S. court system. After all, your tax dollars fund this system. Cash and keep settlements are typically only offered by the manufacturer to protect their bottom line – not to benefit the consumer.

Lemon law claims hold manufacturers accountable for every dollar the consumer spent to sort out the defective vehicle. This includes:
– The cost of the vehicle (down payment, loan payments made, remaining balance of the loan)
– All official costs (sales tax, registration)
– Incidental costs incurred (towing fees, cab fares, hotel stays, etc.)
– Court costs
– Attorney fees
Cash and keep settlements are much quicker than lemon law claims. However, the payout will likely be substantially less.

If you’re not sure what to do, it’s always a good idea to consult with an experienced lemon law lawyer in California. They will review your case and help you determine whether the cash and keep settlement is in your best interests. Chances are, it won’t be.

Don’t try to navigate the lemon law process on your own – it’s complicated, and manufacturers have experienced lawyers working on their side. Instead, protect yourself by working with an experienced advocate who can help level the playing field.

In Conclusion

If you’re offered a cash and keep settlement in your lemon law case, make sure you understand all the implications before you agree to anything. An experienced lemon attorney in CA can help you protect your rights and get the best possible outcome for your case.



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