Accepting vs Rejecting a 998 Offer: Which Is Better?

Published October 19, 2026 · Updated October 19, 2026 · California lemon law

The manufacturer sent a 998 offer. Should I accept it or reject it?

Side-by-Side Comparison

What a 998 Offer Is

A 998 offer is a formal settlement offer made under Code of Civil Procedure 998. Either side in a California lawsuit can make one, but in lemon law cases it is usually the manufacturer that sends it to the buyer.

The offer is in writing and sets out specific terms. In a lemon law case, those terms might include a repurchase of the vehicle, a payment amount, how attorney fees and costs will be handled, and what happens to the car and the loan.

What makes a 998 offer different from an ordinary settlement offer is the cost risk attached to it. If the offer is not accepted and the buyer does not do better at trial, the buyer can lose post-offer costs and may owe some of the manufacturer's costs.

That risk is why manufacturers use 998 offers. They put pressure on the buyer to think hard about whether going to trial is worth it. A 998 offer is a tool in the case, not a sign of who is right.

Because the stakes are real, a 998 offer should always be reviewed with your attorney. Do not accept or reject it on your own, and do not let it sit unread.

A 998 offer can arrive at almost any point after a lawsuit is filed. Some come early, before much discovery, and others come shortly before trial. The timing can affect how much information you have when you decide.

How Accepting a 998 Offer Works

If you accept a 998 offer, the case ends on the terms in the offer. Your attorney signs and returns the acceptance as the offer requires, and the parties then carry out the terms, such as returning the car and paying off the loan.

The biggest benefit is certainty. You know exactly what you will receive and when the case will end. You avoid the time, stress and risk of a trial.

Accepting also removes the cost risk tied to that offer. Once you accept, there is no question of whether you beat the offer at trial, because there is no trial.

The main downside is that you give up the chance of a better result. If your case is strong, a trial might produce more than the offer. That is the trade-off you and your attorney must weigh.

Before accepting, read every term. Make sure the offer is clear about the repurchase amount, the mileage offset, any incidental damages, and how attorney fees and costs under Civil Code 1794(d) will be handled.

Ask your attorney to walk through the steps that follow acceptance, such as when the car will be picked up, who contacts the lender and when payments stop. Knowing the sequence helps you plan.

How Rejecting a 998 Offer Works

You do not have to accept a 998 offer. If you reject it, or if it expires without being accepted, the case continues toward trial or further settlement talks.

The risk comes at the end. If you go to trial and the result is not better than the offer, Code of Civil Procedure 998 can shift costs. You can lose post-offer costs and may owe some of the other side's costs.

Rejecting can still be the right choice. If the offer leaves out items the law requires, such as collateral charges or the loan payoff under Civil Code 1793.2(d)(2)(B), or if the evidence suggests a willful violation, your attorney may believe trial is likely to produce more.

A willful violation can add a civil penalty of up to two times actual damages under Civil Code 1794(c). Whether that is realistic depends on the evidence, which your attorney will review with you.

Rejecting an offer does not end negotiations. Many cases settle later, sometimes after another offer or at mediation. A rejected 998 offer is one step in the case, not the final word.

If you are leaning toward rejecting, ask your attorney to explain what costs could be at stake. Understanding the size of the risk, in general terms, helps you decide whether it is worth taking.

Example: Comparing an Offer to the Law

This is a made-up example. Aisha's new sedan had an electrical defect that caused the car to lose power. Her attorney filed a lawsuit after the pre-lawsuit steps did not resolve the claim. A few months later, the manufacturer sent a 998 offer.

Her attorney compared the offer line by line to what a repurchase must include. The offer covered the price paid but did not clearly address the registration fees or the rental car costs Aisha had paid during long repair visits.

The attorney explained the cost risk of rejecting, the strengths of the evidence, and the time a trial would take. Aisha asked questions and decided with her attorney how to respond before the deadline.

This example is made up and simplified. It does not say whether accepting or rejecting was right, and it does not predict any result. It shows how a careful review compares an offer with the law.

The most important part of the example is timing. Aisha sent the offer to her attorney the day it arrived, which gave them time to review it properly.

Aisha also kept a list of every rental car receipt and every day without the car. Those records gave her attorney the details needed to check whether the incidental damages in the offer were complete.

Questions to Ask About Any 998 Offer

These questions help you and your attorney evaluate a 998 offer. Ask them as soon as the offer arrives so you have time to think before any deadline.

Take notes on the answers. A written summary helps you compare the offer with your goals and explain your choice to family members who may be involved.

Do not be afraid to ask the same question twice. A 998 decision is important, and you should feel you understand the answers before you choose.

Ask too whether the offer can be clarified. Sometimes a vague term can be fixed through a conversation between attorneys, which can make an offer easier to evaluate.

Your attorney may also suggest questions you had not thought of, based on how similar offers have been handled. Listen to that experience, and then make the choice that fits your goals.

• Does the offer include everything a repurchase must include under the law?
• How is the mileage offset calculated, and is it correct?
• How does the offer handle attorney fees and costs?
• What are the realistic risks and benefits of going to trial?
• What is the deadline to respond?
• If I reject this offer, what is the likely next step?

How the Mileage Offset Fits Into a 998 Offer

Many 998 offers in lemon law cases are built around a repurchase. That means the mileage offset matters. Under Civil Code 1793.2(d)(2)(C), the offset is based on the miles driven before you first took the car in for the problem.

If the offer uses today's mileage instead, or picks the wrong repair visit as the starting point, the number can be off. Your attorney will check which visit was the first one for the defect and use the mileage from that repair order.

Small errors in the offset can add up, so this is a line worth checking closely. Bring your earliest repair orders to the review so the right number can be confirmed.

The rest of the restitution formula matters too. The actual price paid or payable, collateral charges like sales tax and registration, and incidental damages are all part of what a repurchase includes under Civil Code 1793.2(d)(2)(B).

If the offer is for cash while you keep the car rather than a repurchase, the mileage offset may not apply the same way. Ask your attorney to explain how the number was built in that case.

Common Mistakes With 998 Offers

The most common mistake is ignoring the offer. A 998 offer that is not accepted in time expires, and the cost risk can still apply. Always send it to your attorney the day it arrives.

Another mistake is focusing only on the headline number. The terms about fees, costs, the vehicle return and the loan payoff can matter just as much.

A third mistake is deciding based on frustration. Being tired of the case is understandable, but the choice should be based on a clear comparison of the offer and the likely result at trial.

Finally, keep making your loan or lease payments while you decide. Missed payments can hurt your credit and complicate any repurchase.

Another mistake is talking to the manufacturer directly about the offer. Let your attorney handle all communication, so nothing you say is misunderstood.

Last, do not assume a second offer will come. Sometimes it does, and sometimes it does not. Decide based on the offer in front of you and your attorney's honest view of the case.

If you are unsure, ask for a short meeting or call to go over the offer in detail. A few extra minutes of discussion can make the decision much clearer.

When Accepting the 998 Is the Better Choice

• The offer covers what you paid, minus the mileage offset, plus incidental costs
• The terms on fees, costs and loan payoff are clear
• You want certainty and an end to the case

When Rejecting the 998 Is the Better Choice

• The offer is well below what the law would likely give you
• The terms are vague or leave out key items
• Your attorney believes the evidence is strong, including signs of a willful violation

Key Facts (as of October 2026)

• Under Code of Civil Procedure 998, rejecting an offer and not doing better at trial can cost you post-offer costs and some of the other side's costs.
• A willful violation can add a civil penalty of up to two times actual damages (Civil Code 1794(c)).
• A 998 offer has a deadline, so send it to your attorney as soon as you get it.

Talk It Through With a Lemon Law Attorney

Every case is different. Our attorneys, listed in firm order: #1 Jacob Shayesteh (founding attorney), #2 Armig Khodanian and #3 Kamau Edwards, will look at your repair history and tell you which option fits. 5.0 stars on Google from 77 reviews (October 2026). You pay $0, win or lose.

What Our Clients Say on Google

“He helped me obtain all of my repair records and purchase documents through the vehicle's app within the hour and officially started my California Lemon Law case the same day. The entire process was straightforward and stress-free, and I never had to deal directly with the manufacturer.”

Miki B. · Lemon law client · 5-star Google review

“He took the time to explain each step, set clear and realistic expectations, and made sure I always understood what was happening with my case.”

Daniel A. · Lemon law client · 5-star Google review

“Within less than 2 months, my case was fully settled. He walked me through exactly what my rights were as a consumer, what the process would look like, and what I could realistically expect as an outcome.”

Rafi K. · 2024 Mercedes-Benz EQE · 5-star Google review

Read all 78 reviews on Google (5.0 stars, October 2026). Reviews describe past clients' experiences; every case is different.

FAQ

What happens if I just ignore a 998 offer?

If it is not accepted in time, it expires, and the cost risks for not accepting it can still apply. Do not let it expire without talking to your attorney.

Does a 998 offer mean the manufacturer thinks it will lose?

Not necessarily. It is a common tool to put cost pressure on the other side.

Can I make a counteroffer?

Your attorney may be able to make your own 998 offer or negotiate. Ask about the options.

Sources and Official References

• California Code of Civil Procedure section 998 (California Legislature)
• California Civil Code section 1793.2 (California Legislature)
• California Civil Code section 1794 (California Legislature)
• California Department of Consumer Affairs: California's Lemon Law Q&A
• California Department of Consumer Affairs: New Lemon Law Procedures (AB 1755)
• California Attorney General: Buying and Maintaining a Car

Laws change. This page reflects California law as of October 2026 and was reviewed by Jacob Shayesteh, Esq.

Related Guides

• What happens after I accept a buyback settlement?
• What is the civil penalty under California lemon law?
• Lemon law court trials in California
• Signing a Manufacturer Release Now vs Attorney Review
• Keep Paying vs Stop Paying Your Car Loan During a Claim
• Lemon Law Attorney vs a Consumer Agency Complaint
• Google Reviews vs Lawyer Rankings When Choosing an Attorney
• Manufacturer Arbitration vs a Lemon Law Claim
• Hiring a Lemon Law Attorney vs Handling It Yourself
• See all lemon law comparisons

Attorney advertising. Wynn Law Group, APC, 10850 Wilshire Blvd, Suite 1010, Los Angeles, CA 90024. General information, not legal advice. Results vary. Prior results do not guarantee a similar outcome.