The right to cancel an automobile purchase usually ends once you sign your loan agreement or pay the dealership in full for the vehicle. Federal and state laws do not provide the same protection for returning a car for a full refund as with retail purchases of different types. Checking your dealership's policy on returns can help protect your finances in the event you change your mind.
Dealer Discretion to Cancel
No state law provides a "cooling-off" period for automobile sales where you can change your mind and return the vehicle without penalty. This means your ability to cancel the purchase of an automobile rests solely in the hands of the dealership where you purchased the vehicle. You should inquire if the dealership you're purchasing a vehicle from has a return policy or a money-back guarantee before you complete the sale and take delivery of the car. Doing so can help you make an informed purchase.
The Cooling-Off Rule
The Federal Trade Commission oversees the proper application of the federal cooling-off rule. This regulation allows you as a consumer to seek a full refund for a retail sale of $25 or more within 72 hours of the purchase. According to the Federal Trade Commission's website, this law does not apply to an automobile purchase. This means no law exists at the federal or state level giving you the right to cancel a car purchase. The sale is usually final.
State Lemon Laws
Each state across the country has a Lemon Law for automobile purchases. This allows you to return a defective vehicle under a specific set of circumstances. The total time you have to report a defect to your dealership varies by state, though usually falls in the 1- to 4-year period plus any additional time allowed by vehicle warranty. To qualify under a state's Lemon Law regulations, your vehicle must have a defect that significantly impacts performance or vehicle safety; in addition, your dealership must have attempted to repair the defect repeatedly, but without success. The total number of required repair attempts varies by state.
Contacting Your Dealership
If your financial situation changes due to sudden job loss or serious injury, you should contact your dealership as soon as possible. You may be able to work out an arrangement with your dealership to return the vehicle as long as you purchased the vehicle recently and the vehicle has no damage. However, your dealership has no requirement to allow you to return the vehicle, and your obligation to repay an existing auto loan remains.
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