Well, here on the mainland, contract law (which varies some by state) generally says that if you pay for someone for something & it is not delivered on time and in the stated condition as expected, then an immediate refund is required, no questions asked, unless a reasonable explanation is offered, which is then up to the buyer to accept or decline.
And the fact that the dealer tried to hide the damage from & not tell the buyer about it is considered FRAUD everywhere I've ever lived...mainly because they paid for a "NEW" vehicle but would be getting a "Refurbished" one... oh no, oh hell no, & ho f&ck no !
And 20% is a normal INconvenience fee that is added to the full refund amount, as consideration for the time & hassle of having to go find another vehicle somewhere else... call it "pain & suffering" or "mental anguish" or whatever term you wanna use, but it is a fairly standard practice in most places...
Although I am NOT a lawyer, I have studied contract law & execution quite extensively through my dealings with tons of major companies...
However, my daughter IS a corporate lawyer, and she concurs with what I have said here !