Cars typically are not cheap purchases. Even used cars can cost several thousand dollars, while the newest, most expensive models can top six figures. Often after putting such a large amount down on a vehicle, people experience buyer's remorse and want to return the car they've purchased. Unfortunately, in most cases, once you buy a car, you can't take it back for a refund.
Unless your state gives you a right to cancel the purchase or your dealer's paperwork mentions an option to return the vehicle, you usually can't return a car after you buy it.
There is no federal law that requires a car dealership to take a car back. Thus, in general, once you sign the paperwork for your car and drive it off the lot, you can't return it. Some states, including California, have laws that require a dealer to give a right to cancel. Others do not, and such returns are at the discretion of the dealership. California offers protection under the Car Buyer's Bill of Rights, which gives the buyer an opportunity to purchase the right to return a vehicle for 48 hours. However, this applies only to used cars. New Jersey also allows you to return vehicles for 24 hours, but this applies only to vehicles that are leased.
Because there is no federal law requiring dealers to accept car returns, you usually can return a vehicle only if your dealer offers you the option to do so. This option should be in writing in your paperwork – don't rely on a verbal agreement, as there is no proof of the deal if the dealer goes back on his word. If a dealer gives you a return option, you may have to pay extra for it.
Why You Can't Return a Vehicle
Quite simply, dealers don't want you to return a vehicle in most cases because they lose money if you do. Even though they get the vehicle back, they legally have to sell the car as used, even if it's only been a few hours since you closed the deal. A used car translates to decreased market value. Additionally, it's harder to sell a returned car because it won't qualify for new car financing with a new buyer.
From the legal perspective, state laws hold dealers responsible for selling quality products. In other words, there is always an implied warranty with a dealer that says the car should work. However, dealers get around this by using the words "as is" or "with all defects" with their sales. With these words, the implied warranty essentially becomes voided. This means they're not responsible for it if your brand-new car clunks out a few miles down the road from the dealership, although you may be able to get help through the manufacturer warranty.
FTC's Cooling Off Regulation
The Federal Trade Commission does have a cooling off regulation, which is the primary source of confusion surrounding car returns. The regulation states that you have three days to return an item to a seller. However, the cooling off right to cancel applies only to "sales at the buyer's home, workplace or dormitory, or at facilities rented by the seller on a temporary or short-term basis." This means that, unless the car dealer actually comes to your home, place of business or rented space to close the deal, the cooling off period doesn't apply. Most people can't benefit from this regulation, because most people buy their cars at dealerships. People who buy their cars privately may have the regulation applied, but even private sellers can conduct sales with as is terms.
How to Return a Vehicle
Review your purchase contract. Even if your dealer didn't mention a return policy, it should be in the contract if one exists. If it's clear the dealer isn't going to give you a refund, ask if the dealer will accept the car as a trade-in vehicle. You'll still take a loss, but you won't lose the entire value of the car, and you will get a more appropriate vehicle for you.
Another option is to sell the vehicle yourself, either back to the dealer or to a private buyer. Avoid the likelihood of needing these options by thoroughly researching your purchase options ahead of time and inspecting the invoice price for the vehicle prior to purchase – then negotiating based on that price. You should also take multiple test drives and wait at least 24 hours before your last test drive and signing the paperwork. You should also ask for a CARFAX report and have your personal mechanic inspect the vehicle.
- Federal Trade Commission: The Cooling-Off Rule: When and How to Cancel a Sale
- California Department of Motor Vehicles: Car Buyer's Bill of Rights FFVR 35
- The State of New Jersey: National Consumer Protection Week, Day 3: Consumer Car Trouble: How to Protect Yourself When Buying, Repairing or Leasing a Motor Vehicle