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Can You Return a Car After Signing?
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No matter what the window sticker or the salesperson says, you should be happy with the vehicle you’re buying and understand the financing you’re getting. Otherwise, there may come a time when you start to question whether you can return the car.
The short answer, though it depends on the situation, is that you likely won’t be able to return a car you just bought, no matter if it’s new or used. Before you decide to buy a car, it’s wise to understand your options for unwinding the deal and returning the car to the dealership.
Reasons you might want to return your car
Buying a new vehicle is usually an exciting event, like making a new friend. But sometimes, you might want to end that friendship early and return your car. There are many reasons you may have for wanting to return your car, but only some of them will result in a successful return.
You have buyer’s remorse
Perhaps you realize it’s not a good fit — you decided you’d rather have a minivan than a sedan. Or you don’t like the color in bright daylight. Maybe you feel like you agreed to payments that are too high for your budget. Usually, buyer’s remorse — when you regret buying the vehicle for personal or financial reasons — won’t result in a successful return. If you sign the sales agreement and financing goes through, the vehicle is yours.
Cars aren’t like clothes; you can’t return them if you just don’t like them anymore, even if the tags are still on. Check out the alternatives below for potential solutions.
Your new car is a lemon
If your new car is spending more time in a service bay than on the road, you may have a lemon. That is, a car that leaves a sour taste in your mouth because it’s not working right. Technically, a lemon is a car that requires multiple dealer services for the same problem during the warranty period, or a car that is out of service for a lengthy time. Depending on where you live, you could have the right to return it. Here are lemon laws listed by state from the Better Business Bureau.
Your car payments are too high
After the thrill of buying a car wears off, the reality of the payment starts to sink in. Perhaps it’s higher than you budgeted for and you can’t afford your new car. Or perhaps your home or work situation changed and your paycheck will be spread thinner than you expected. In this case, you typically can’t return a car to the dealership. To get out from under a payment you can’t afford, consider refinancing.
You think you got cheated
You may think the seller misrepresented the vehicle, the financing or both. Signing all the paperwork is usually fast-paced and a bit confusing, so you may find you agreed to pay more than you planned. Or perhaps the car isn’t what you thought, with features missing or more wear and tear than you anticipated. To return the car after buying it and get out of an unfair deal, keep all the paperwork and contact your local consumer protection agency or your state’s attorney general.
You could return a car under these conditions
There are a few situations in which the buyer has the right to return a car. The circumstances vary by state law, so check with your state’s consumer protection agency to learn the details.
Your dealer has a written return policy
Some dealers have a written return policy that’s usually listed on their website and other marketing materials. A dealer may call this a no-questions-asked return policy or a money-back guarantee. There may be a few restrictions — the car can’t have significantly more mileage or have suffered damage.
Each dealer sets the time allowed to return a car and other conditions, but it usually ranges from three to 30 days. Carvana and Vroom offer seven-day used-car return policies, and California’s Car Buyer’s Bill of Rights allows used-car dealers to offer a two-day cancellation policy for cars costing $40,000 or less.This allows time for buyer’s remorse to sink in or for significant mechanical problems to show up.
Your loan terms change (yo-yo financing)
Yo-yo financing occurs when you are allowed to drive off with the car and sign the paperwork later, only to be told that your final APR or required down payment is much higher than predicted. If you’ve already driven the car and the dealer has taken your trade-in, what choice do you have? The short answer is: You can still refuse the deal. To unwind the transaction, you must bring the car back to the dealer, who should then return your trade-in and down payment.
Each state has its own laws about how this should happen. Here are two examples:
- In Colorado, dealers have 10 days to find financing for the deal. If a buyer returns the used car to the dealer, they must pay daily usage and mileage fees, unless the dealer waives them.
- Maryland car dealers must notify the buyer within four days if their credit application is rejected, and then the buyer has two days to return the car. They may not have to pay a fee for using the vehicle.
One way to avoid this issue is to get preapproved for a loan before visiting the dealer. With a firm offer in hand, you can feel confident that you understand the terms of your loan before purchasing a car. By filling out a single form with LendingTree, you may receive up to five auto loan offers.
The vehicle is a lemon
New vehicles are covered by lemon laws in most states. The lemon laws usually outline a specific number of times the car be serviced for the same problem or require that the car be out of service for a specified period of time during the manufacturer’s warranty period. If your car qualifies, you may be eligible for a refund or a replacement vehicle.
In Missouri, for example, a car is a lemon if it’s been to the repair shop four or more times for the same problem — and the problem still exists — or if the vehicle has been out of service for 30 or more days. In Ohio, problems must occur in the first 12 months or 18,000 miles of ownership.
If you’re buying a used car, it’s a good idea to have it inspected by an independent mechanic before you finalize the deal. Few states have lemon laws for used cars, but here are two:
- West Virginia allows dealers to sell high-mileage used cars for $4,000 or less “as is,” and buyers have three days to cancel the sale if they discover a significant mechanical problem.
- In Massachusetts, buyers can return any car if it fails to pass the motor vehicle safety inspection within seven days of the sale.
You have military orders to move or deploy
Under the Servicemembers Civil Relief Act (SCRA), members with a leased vehicle may be eligible to terminate the lease without paying early termination fees or a penalty if they are called to active duty or receive orders for a permanent change of station or are deployed for 180 days or longer. The details vary depending on the duty stations and whether the lease was entered into prior to or during active-duty service.
The SCRA does not cover changes of station within the continental U.S., so check with the lessor to see if you can move the car to the new state of residence.
Note that the SCRA does not apply to auto loans, only leases.
The federal cooling-off rule
You may have heard there’s a three-day cooling-off period for some purchases, but in most cases, it doesn’t apply to vehicles. The Federal Trade Commission has a three-day cooling-off rule that covers door-to-door sales or purchases made at temporary locations, like a convention center, hotel room or restaurant.
It doesn’t cover vehicle sales made at temporary locations if the seller also has at least one permanent place of business. Sales at a dealer’s lot aren’t covered. Tent sales and other types of temporary events by dealers with a dealership wouldn’t be covered either.
Alternatives to returning a car
If you find it’s not possible to return a car you just bought, consider these alternatives.
Refinance your car loan: If you can’t afford your current payment or find that you qualify for better financing through a bank or credit union, you can refinance it. You may end up having a longer loan term or needing a down payment, but you may be able to keep the car. You could also find a cosigner with good credit to help you get a better APR.
Sell or trade in your car: Sell the car and use the proceeds to pay off the loan or trade it in. You may lose some value to depreciation — be careful that you don’t end up upside down on your new car loan — but it’s better than being stuck with a car that you can’t afford or doesn’t meet your needs.
Ask for a voluntary repossession: This should be considered a last resort option because it could significantly impact your credit score. But if you’ve got a lemon that you’re tired of trying to fix, or a car you don’t want, this is one way to get out of a deal that no longer works for you. If you’re behind on payments and you take the car to the dealer for service, they may keep the car as a “voluntary repossession.”
You could also still owe on the loan if the car is underwater or worth less than the balance of the loan. If you’re thinking about giving up the car, work with the lender for a voluntary surrender, which may have less impact on your credit than a repossession because it shows that you were responsible and proactive.