Sometimes a manufacturer will offer you money to keep your vehicle rather than buying it back.
At first glance, that can sound like a great deal.
You keep your car.
You receive money.
You avoid the inconvenience of returning the vehicle and finding another one.
But there is another way to look at it:
How much is it worth to you to continue owning a vehicle you believe is defective?
That is the real question.
A cash-and-keep offer can be attractive
Suppose you paid $60,000 for a new vehicle.
The manufacturer offers you $7,500 to keep it.
You might reasonably think:
“I can live with the problem for $7,500.”
That may be a perfectly rational decision.
But before agreeing, understand what you are giving up.
Is the problem actually fixed?
This should be your first question.
If the manufacturer is offering money because you experienced a problem that has now been successfully repaired, the situation may be very different from a vehicle that continues to malfunction.
Ask yourself:
Do I trust this vehicle now?
If the answer is no, that matters.
What happens if the problem returns?
Read the settlement carefully.
Does the agreement affect future warranty claims?
Does it release claims related to the existing defect?
Does it release other legal claims?
Does it contain representations about the vehicle?
Does it require you to dismiss a pending claim?
The exact language matters.
What happens to your warranty?
Generally, settling a dispute does not necessarily mean that the manufacturer’s entire written warranty disappears.
But a settlement agreement may contain specific provisions concerning the dispute and claims being released.
Do not assume.
Read the agreement.
What if the defect affects resale value?
This is one of the most overlooked issues.
Suppose your vehicle has suffered repeated engine problems.
Even if the vehicle is eventually repaired, you may wonder:
“What will I have to disclose when I sell this vehicle?”
And:
“What will a future buyer think when they see the repair history?”
A cash payment today may not compensate you for every future consequence of owning a problematic vehicle.
What is the manufacturer buying?
This is the key negotiation question.
If the manufacturer offers you money, it is usually seeking something in return.
Perhaps it wants you to:
- release claims;
- dismiss a demand;
- stop pursuing a buyback;
- keep the vehicle;
- resolve a warranty dispute; or
- agree that the matter is finished.
Compare the cash offer with the alternative
There are generally several possible paths:
Keep the vehicle without a settlement.
Keep the vehicle and accept a settlement.
Seek a buyback.
Seek a replacement.
The best option depends on the vehicle and the specific facts.
Don’t focus only on the dollar amount
A $10,000 offer can sound enormous.
But suppose you still have a $70,000 loan on a vehicle you no longer trust.
Or suppose the defect affects a critical safety system.
Or suppose the vehicle has already spent 40 days in the shop.
The dollar amount alone doesn’t answer the question.
What if the manufacturer says the offer is “final”?
Don’t let the word “final” pressure you into signing something you don’t understand.
Manufacturers negotiate settlements every day.
You should understand your position before deciding whether to accept one.
Could the underlying situation qualify under Nevada Lemon Law?
Possibly.
Nevada law provides remedies in qualifying circumstances where a new vehicle does not
conform to applicable express warranties, the defect substantially impairs use and value, and the manufacturer cannot conform the vehicle after a reasonable number of attempts.
A settlement offer may simply be the manufacturer’s attempt to resolve the dispute without a buyback or litigation.
Before signing, ask five questions
- What exactly am I receiving?
- What exactly am I giving up?
- Will I continue to have warranty rights?
- What happens if the problem returns?
- What claims does the release cover?
If you cannot answer those questions, you probably should not sign the agreement yet
Take the 30-Second Nevada New Car Problem Quiz
If your new car has been in the shop repeatedly, you don’t have to figure out whether it might be a lemon by yourself.
Take our 30-second Nevada New Car Problem Quiz.
We’ll ask about your vehicle, warranty, repair history and time out of service.
Precision Injury Law represents Nevada consumers with qualifying vehicle warranty and Lemon Law problems.
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