By: Mayra A. Flores, Associate Attorney at West Coast Lemons APC
If you’ve leased a car that turns out to be a lemon, you might wonder what exactly you are supposed to get back and what about the extra costs that you had to pay while waiting for the manufacturer to make it right. That’s what the California Court of Appeal tackled in Crayton v. FCA US LLC. Here’s what happened and what it means for you.
The Backstory
Brandon Crayton leased a new vehicle from FCA US LLC (maker of Chrysler, Jeep, Dodge, and
Ram vehicles). Not long after, the car started having serious problems while still under warranty.
After multiple failed repairs, Crayton brought a lemon law claim under California’s Song-
Beverly Consumer Warranty Act, which allows consumers to get a refund or replacement if the
manufacturer can’t fix the car after a reasonable number of attempts.
What Counts Toward a Refund?
Crayton won his case at trial, but he believed he should get more money back, including:
1. The residual value of the lease (this is the price he would’ve paid to buy the car at the end
of the lease), and
2. Reimbursement for insurance and registration fees he paid after FCA should have bought
the car back.
What the Court Said:
No to Residual Value
The court said Crayton wasn’t entitled to be paid back for the lease’s residual value because he
was never actually required to buy the car. He only had the option to buy it at the end of the
lease. Including that cost would have overcompensated him, giving him more than what he
actually paid.
Maybe to Insurance and Registration Fees
The court agreed that some insurance and registration fees might be reimbursed, but only if:
1. They were paid after FCA’s duty to buy the car back arose, and
2. They were fees that benefited the manufacturer’s interest (like keeping the vehicle
insured or registered while you were waiting for FCA to act).
But not all insurance counts:
1. Property damage (also often called collision) insurance (protecting the car itself) might be reimbursed.
2. Liability insurance (protecting the driver if they cause an accident) does not get reimbursed.
