Outcomes
What compensation can you receive?
When a manufacturer can't fix a qualifying defect after a reasonable number of attempts, Section 2301.604(a) requires it to pay your reasonable incidental costs and either replace the vehicle with a comparable one or take it back and refund the full purchase price, less a reasonable allowance for your use. You can say which you prefer, and TxDMV's rule has the examiner accommodate that "to the extent possible." So it's not an automatic choice, just to be clear.
How a lease buyback is divided
For a leased vehicle, TxDMV's rule splits the refund between you and the leasing company (section 224.260(c)). Barring unusual and extenuating circumstances proved by a preponderance of the evidence, you receive every lease payment you made plus what you paid to enter the lease, reduced by a use allowance worked out with the lessor's actual price as the purchase price. The lessor receives what it actually paid for the vehicle plus 5.0% of that price and any amount it paid to secure the lease, less a credit for your payments. The lease ends without penalty, and the lessor transfers title to the manufacturer.
Here's a made-up example, with round numbers so the math is easy to follow. The lessor paid $54,000 for a crossover. You paid $4,000 at signing and sixteen monthly payments of $700, so $15,200 in all. The defect was first written up at 6,000 miles, and the hearing is at 18,000:
- The first 6,000 miles are charged at the full rate: 6,000 ÷ 120,000 × $54,000 = $2,700.
- The next 12,000 miles would be $5,400 at the full rate, so at half rate they come to $2,700.
- Your use allowance is $5,400, so your share is $9,800, and the $35 filing fee comes back on top for $9,835.
That's just the arithmetic, it isn't what your case is worth. Notice, though, that the half-rate miles start at the first report of the defect, and that mileage comes off a repair order, so if the first write-up is vague it can move thousands of dollars away from you.
If you bought the vehicle
A purchased vehicle follows section 224.260(b). The refund starts from the total purchase price without interest, finance charges or insurance premiums, the $35 fee is added back, and the same two-rate allowance comes off against a presumed 120,000-mile life. Where a lender has a lien, the refund is split under section 2301.604(b). Our Texas buyback calculator runs your own figures, if you want to try them.
Costs of losing the car, and who pays the lawyer
When a refund or replacement is ordered, 43 TAC section 224.262 repays reasonable, verifiable incidental costs from loss of use, such as alternate transportation and towing. A repair-only order doesn't trigger it. Subchapter M has no provision that makes a manufacturer pay your attorney; a court may allow fees on a winning Magnuson-Moss claim.