Rules You Should Know When Returning Your Car to Car Dealership

Auto Attorney

Buying a car is one of the most important decisions we make in our lives. As big a decision a car purchase is, it is important to know if you are able to return your car should you be dissatisfied with the purchase. Even if the dealership sold you a bad car or didn’t disclose previous frame damages to you, you may not be able to return your car.

This is why you should be aware of all the different rules that revolve around purchasing and returning your car before you actually purchase it.

What is the FTC Used Car Rule?

The Federal Trade Commission’s Bureau of Consumer Protection established the Used Car Rule in 1985 to protect consumers when purchasing a used car. Used car dealers that sell more than five cars in a 12-month period must stay compliant with the Used Car Rule. This Rule applies in all states—except Wisconsin and Maine. The Used Car Rule even protects consumers in Puerto Rico, the District of Columbia, the American Samoa and the U.S. Virgin Islands.

The Used Car Rule requires dealers to display a window sticker or Buyer’s Guide on used cars for sale. The sticker or Guide specifies whether or not there is a warranty on the automobile. If there is a warranty, the Guide provides the terms and conditions.  In January of 2017, the Used Car Rule was changed to make it more transparent to consumers precisely what “as-is” means. The new law states that the Buyer’s Guide must now say: “The dealer does not provide a warranty for any repairs after the sale.”

Can You Give Your Car Back to the Finance Company?

You decided to splurge on a car that you can’t afford. The auto dealer was very persuasive—so against your better judgment, you decide to go ahead and sign the purchase contract. Now, several months later, you feel handcuffed to the car. You know that you cannot afford it and are not sure how you even got approved for such high payments. What are your options? Well.. that depends.

In most cases, if you give the car back to the dealer or finance company, you will not be off the hook. The creditor will not forgive the debt. They will sell the automobile and then sue you for the deficiency. There are a few situations in which you might be able to give a car back without a penalty, such as when the transaction involves fraud. There are several financing schemes that untrustworthy dealers use to defraud consumers. Here are several of the most common auto financing schemes:

  • Yo-yo financing – So, you buy a car, sign the paperwork and drive off the lot. Several days later, the dealer calls you to say that the financing has fallen through. They want you to come back in and sign a new contract. This is called yo-yo financing. If you are the victim of yo-yo financing, you might be able to return the car. It is best to talk to an auto fraud attorney for guidance in this case.
  • Falsifying the loan application – If you were approved for a loan that you couldn’t possibly afford, you could be the victim of a falsified loan application. Sometimes, unscrupulous dealers will fudge loan applications to get customers approved. If you were given an auto loan with no job or very little income, then you might want to talk to a lawyer to determine if the dealer lied on your loan application.  
  • Packing the payments – Sometimes dealers will pack the loan by adding extra things that you did not ask for, such as warranties and GAP insurance. Afterwards, when you try to sell the car, you are surprised to discover that your loan is “underwater” or you owe much more than the car is worth. This could be a sign of packed payments.

If you are the victim of any of the above auto fraud scams, you might be able to return the vehicle or sue the auto dealer or finance company for fraud and recover damages. You need to talk to an auto fraud attorney to learn exactly what rights you have.

Can You Return a Car After You Buy It?

You just purchased a car two days ago and realized that you don’t want it. Maybe the monthly payments are too high, or it is not the best vehicle for your needs. So, can you return the car? That depends. After you sign the sales contract, the car is yours. However, many dealers will work with you if you made a mistake. The first thing that you should do is talk to the dealer to see what they can do to help you.

If the dealer doesn’t help, you still might have recourse—especially if the car was misrepresented in some way. For example, if the dealer made promises about the vehicle that wasn’t true, then you might have a case for fraud. In this case, you could sue the dealer to get them to return the car. Your best bet is to speak with an auto fraud attorney.

Can You Take a Car Back Within 3 Days?

So, you’ve just purchased a car and have buyer’s remorse. Can you return the car? Unfortunately, no. Many buyers wrongly believe that there is a “Three-Day Return Period” for automobile purchases. This is just a myth. Although there is a Three-Day Cooling-Off Period for some purchases, this rule does not apply to cars. It only applies in a few particular situations, such as when buying something from a door-to-door salesperson. However, there are a few situations where you might be able to return a car within three days:

  • Odometer Fraud – If you suspect odometer fraud, talk with a private attorney. The following could indicate odometer fraud: a low-mileage vehicle with old carpet and upholstery, replacement equipment on a low-mileage car, missing screws or scratches that indicate dashboard replacement.
  • Salvage fraud – A car that is salvaged is one that has been declared a total loss by the insurance company. If a vehicle is salvaged, the dealer must inform you. Look for the following signs of a salvaged auto: different colors of paint under the hood, weather stripping or fenders, dents and blemishes on the body and replacement doors and hinges. Also, if the title says “salvaged” or “rebuilt,” then the dealer should have disclosed this to you during the sale.

If you notice signs of odometer or salvage fraud, you might be able to return the car that you just purchased—and recover damages. It is best to talk to an auto fraud attorney for guidance.

Can a Car Dealership Cancel a Contract?

Imagine buying a new car, driving it home and then receiving a call from the dealer telling you that the financing fell through. Can the dealer cancel your contract in this case? Surprisingly, the answer is yes. In most cases, the dealer can rescind on the purchase contract but usually only within ten days. This is called a “spot delivery.” Dealers use this method to get you to agree to purchase a new car before you have a chance to change your mind. Be forewarned, though, that the financing is not set in stone with these types of deliveries and that it can fall through later.

If you read the “Sales Contract” carefully, it should note that the dealer has the right to rescind the contract within a certain number of days. This is legal. However, there are some practices associated with spot deliveries that are not legal. One of these shady practices is called “Yo-yo” financing. With yo-yo financing, the dealer will call you a week or so later to say that your funding fell through. They will ask you to come back to the dealership to sign a new financing contract.

Usually, the terms of the new agreement will be unfavorable. The interest rate may be higher or the loan term longer. This practice is deceptive. Don’t sign the financing contract if the conditions aren’t in your favor. Instead, contact an auto fraud attorney for advice. You might have grounds to file an auto fraud lawsuit.

How Do I File a Complaint Against a Car Dealership?

Were you duped by an auto dealer? Unsurprisingly, some used car sales involve deception or fraud. The annual value of auto fraud may be as high as $6 billion this year. You have rights when it comes to buying a car. If the dealer engaged in a deceptive or fraudulent practice to persuade you to buy a vehicle, then you can file a complaint against them. Here are the steps:

  • Work directly with the dealer – The best way to resolve issues with the dealership is to contact them directly. State the problem and ask them to fix it. Avoid getting angry or accusatory.
  • File a complaint with your state’s consumer protection agency – If you’ve exhausted your options with the dealership directly, your next choice is to file a complaint with your state. The number to call varies by state, but you can find your state’s information here.
  • Sue the dealer – If you have talked to the dealer and filed a complaint with your state’s consumer protection agency, the next step would be to contact an auto fraud lawyer to determine if you have a case for a lawsuit.

How Do You Write a Letter of Complaint?

If you just purchased a new car and felt that you’ve been had by the dealer, the first step is to file a complaint with the auto dealer. There is a right way and a wrong way to complain. It won’t be helpful to launch an attack on the dealer. It will just fall on deaf ears. The best way to protest is to write a letter of complaint.

Here is a template for a complaint letter. It describes the problem and gives the dealer options for resolving the issue. This letter gets right to the point. You can write the letter yourself or ask an auto fraud lawyer to write it for you.

Rules You Should Know When Returning Your Car to Car Dealership
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