If You Buy a Car Can You Return It in Three Days After Purchasing It?

After purchasing a car, circumstances may arise that cause the buyer to change his mind shortly thereafter. Each state has its own specific rules and regulations for whether a consumer can change his mind after signing a purchase contract. Many states have what is called three-day rule for canceling a contract.

Three-Day Rule

After signing certain contracts, an individual has three days to cancel, according to federal laws. This is called the "cooling off" rule or "three-day" rule. To cancel, the individual must inform the company or other individual in writing of his decision to cancel inside of three days after signing the contract. The rule applies to specific types of contractual agreements, like home equity loan contracts, Internet purchases and door-to-door sales. The rules for the cooling off period vary by state, so you should examine your state laws before entering or attempting to cancel any type of contract.

Does It Apply To a Car Purchase?

The cooling off rule does not normally apply to car deals. That is because when a consumer purchases and drives a car it immediately loses value. The consumer could very well put thousands of miles on a car in a matter of days and then return the car if this rule applied to car transactions. However, some states require car dealers to honor a request to return a car under certain circumstances, such as in the case of a car that turns out to be a "lemon" (mechanical issues).

Lemon Law

Under state lemon laws, a dealer or private seller must give the buyer a refund or comparable replacement if the dealer sells a defective car. A defective car is one that cannot be fixed within a certain amount of repair attempts. However, the final decision on whether a car is a lemon is up to a court of law. If the dealer refuses to give a refund, the buyer may have to keep complete records of what has occurred and file a claim in court to get his money back.

Financing Issues

Another issue to consider when examining this three day rule is what happens when an individual finances the car purchase and signs a loan agreement. When the loan commences, and the lender has finished processed the loan, the buyer would also have to cancel that contract. If the state law permits the buyer to return the car, the buyer and dealer must also arrange to either rescind that loan agreement or transfer the funds to purchase a new car.