Whether you signed a new, used or leased car agreement, there is no three-day grace period on automobile purchases in the United States, regardless of personal circumstance. However, there are options if you change your mind because of a mechanical problem with the car or your own financial state.
If your newly purchased car has mechanical problems, consult your state's lemon laws for information on returning the vehicle for a full refund. Lemon laws vary by state, but usually cover new or leased personal-use vehicles in their first or second year or first 18,000 miles, whichever occurs first. The dealer must be given the chance to remedy the problem in a set number of repair attempts, usually between two and four times. To determine if your vehicle qualifies as a lemon in your state, visit BBB.org to take the Auto Line quiz.
Used Car Rule
Buying a used car comes with risk, especially if the warranty is murky. According to the Federal Trade Commission's used car rule, all used car dealers must display a buyer's guide on the vehicle that outlines the warranty information, as-is condition, mechanical defects and the percentage of responsibility the dealer assumes after the sale is complete. If you did not receive a buyer's guide at the time of purchase, you have legal recourse to return the used car for a full refund.
If you purchased a car but changed your mind because of personal financial issues, there are a variety of ways to remedy the problem. Your best bet is to re-sell the vehicle, trade it in for a lower-cost model or find a friend or family member to take over the payments. You may lose money in the process, but your credit score will remain sound. If giving up the vehicle is not an option but you cannot afford the loan payments, consider filing bankruptcy, which will absolve you of the debt while allowing you to keep the vehicle.
If a repossession is imminent, talk to your creditor about your options. As a last resort, you can give the vehicle to your creditor as a voluntary repossession, which will save you money in towing and repossession charges. With a voluntary repossession, the creditor re-sells your car at auction to recoup some of the loss. Keep in mind that if the auction price does not equal your loan amount, you will be responsible for the remaining balance, which is known as a deficiency.
- Lemon Justice: Top 5 Misconceptions About Lemon Law
- Lemon Justice: What is a Lemon?
- Bureau of Consumer Protection Business Center; A Dealer's Guide to the Used Car Rule; June 2004
- Bankrate; Bankruptcy and Car Repossession; Justin Harelik; June 2008
- FTC; Vehicle Repossession - Understanding the Rules of the Road; Nov. 2008
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