Lemon Law Settlement vs. Trial in California: Which Gets You More?

Why Most Cases Settle

Settling avoids the time, uncertainty, and cost of litigation for both sides. For manufacturers, it also avoids the risk of a court finding their failure to repair was willful, which can trigger civil penalties well beyond a standard buyback. For consumers, it means a faster resolution without the unpredictability of trial.

What a Typical Settlement Includes

A negotiated settlement generally mirrors what you'd be entitled to under Song-Beverly: a vehicle repurchase reflecting your purchase price and related costs minus a mileage-based offset, or a comparable replacement vehicle. Reasonable attorney's fees are typically negotiated separately, consistent with the law's fee-shifting provision.

What Changes If a Case Goes to Trial

At trial, a judge or jury doesn't just decide whether you qualify. They can also determine whether the manufacturer's failure to repair was willful, which opens the door to civil penalties of up to two times your actual damages, on top of the standard buyback or replacement value. This is the primary reason a case that seems clearly winnable on the facts sometimes doesn't settle for as much as it might be worth at trial.

Why Manufacturers Sometimes Prefer to Settle Strong Cases Quickly

If the facts point toward a willful failure to repair, a manufacturer often has a strong incentive to settle before that question ever reaches a judge or jury, since the civil penalty exposure at trial can meaningfully exceed a negotiated buyback. This is a factor an experienced attorney will weigh when evaluating whether a settlement offer reflects the real strength of your case.

The New Mediation Requirement Changes the Calculus Too

For manufacturers under the opted-in AB 1755 and SB 26 framework, litigation now includes a mandatory mediation window, generally within 150 days of the manufacturer's answer to the complaint. This built-in step often produces a resolution before a case gets anywhere near trial, which is part of why the new framework was designed to encourage faster settlements.

What Trial Actually Involves

Pursuing a case to trial means a longer timeline, formal discovery, and the inherent unpredictability of a judge or jury deciding the outcome, rather than a negotiated number both sides agreed to. It's rarely the first choice for most cases, but it remains meaningful leverage in negotiations, since a manufacturer knows a strong case could end up there.

When It Makes Sense to Push Past a Settlement Offer

If the manufacturer's conduct suggests a willful pattern, repeated failed repairs despite clear internal awareness of the defect, for example, an early settlement offer may undervalue what the case could be worth if civil penalties were on the table. This is exactly the kind of judgment call that benefits from experienced legal evaluation rather than accepting the first number offered.

A Settlement Evaluation Checklist

• Does the offer reflect the full purchase price and related costs, minus an accurate mileage offset
• Are attorney's fees being handled separately, consistent with fee-shifting
• Does the manufacturer's repair history suggest willful noncompliance that could support civil penalties at trial
• Has a mediation session already been factored into the manufacturer's offer
• Would a second opinion change your read on whether this offer is fair

Find Out What Your Case Is Really Worth

Before accepting any offer, it's worth understanding what your case could be worth under both scenarios.

Reach out today. The clearer your timeline, the stronger your position.

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