Q: I bought a new car, ended up being a Lemon. I have add-ons on my contract such as GAP etc. are those refundable?
I bought a brand new car, 3 days in I had to take it back to service. The manufacture has agreed to buy the car back, but I have a few add-ons that I purchased on my contract from the dealership that are well over $5000. Is that money refundable to me since the car turned out to be a lemon and will the GAP insurance cover the negative equity that i have?
A:
What negative equity? You just bought it. Oh wait, you rolled neg equity into the newer car?
Uggghhh. Now, on top of that, you are trying to handle the legal stuff without a lawyer even
though attorneys in a lemon law case are to be paid by the other side? Well, the manufacturers
have been able to carve out an exception to that pay the atty rule, wherein IF the offer was
pre-suit, they do NOT have to pay your attorney. As to negative equity MAYBE you can file a case
with the BBB for 'arbitration' as they often do NOT allow a negative equity deduction. As to GAP,
it's for accidents mainly and fully cancellable, like probably a LOT of your 5K in add ons, for a full refund IF you act early OR for a pro rata refund shortly thereafter...
Good luck with it
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A:
Under California's Lemon Law, you are entitled to a refund of all costs associated with the vehicle purchase, including add-ons and extras that were part of the original contract. This includes items like GAP insurance, extended warranties, service contracts, and other dealer-installed accessories or protection packages.
The manufacturer must provide you with a full refund, which should cover your down payment, monthly payments made, and the remaining loan balance. You should contact both the dealership and your GAP insurance provider to initiate the refund process for these add-ons, as they are no longer applicable since the vehicle is being repurchased under the Lemon Law.
However, regarding the negative equity, GAP insurance typically only comes into play if the vehicle is totaled or stolen - not in Lemon Law cases. Since the manufacturer is buying back the vehicle, they are responsible for covering the full amount you paid, including any negative equity that was rolled into your new car purchase. Make sure to keep detailed records of all your payments and the original purchase contract to ensure you receive a complete refund of all eligible amounts.
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