Buying a car is a major commitment — one that’s very hard to get out of after you sign the purchase agreement. Below, we explain why that is and the limited circumstances under which a car buyer could return their vehicle to the seller.
Can You Return a Car You Just Purchased?
- When Can You Return a Car?
- Return Policies When Buying a Car Online
- What Is the Federal Cooling-Off Rule?
- What if the Car Is a Lemon?
- Can You Return a Financed Car?
- Can You Return a Leased Car Early?
Online car sellers like CarMax and Carvana offer policies wherein you can return a car you just bought under certain circumstances, but most brick-and-mortar dealerships offer no such “money-back guarantee” for a car purchase.
No federal law requires dealers to accept returns and only a few states, such as California and Massachusetts, outline additional consumer protections (though those apply exclusively to used-vehicle purchases).
There’s a good reason for this. Unlike other consumer goods, which the seller can presumably put back on the shelf and sell to another customer for the same price, a new car experiences tremendous depreciation the moment the buyer drives it off the lot. That’s because once a new vehicle is registered to a buyer, it’s considered used and the dealer needs to sell it as such.
That’s not the only consideration. If you took out a car loan to pay for the vehicle, the lender will still expect full payment, but given the market value of the vehicle has gone down, its new sale price likely won’t cover it; you’ll be on the hook for the rest. The refund transaction gets even trickier when there’s a trade-in involved.
For these reasons, consumers are expected to carefully research their options, take a test drive, and fully understand the terms of the sales contract before finalizing a vehicle purchase.
When Can You Return a Car?
Buyer’s remorse is not cause for a return, but there are limited situations where you might be able to take the car back. For instance, you may have recourse if:
Your vehicle proves to be a lemon
Congress and individual states have enacted lemon laws, which give buyers the right to return a defective vehicle for a refund or replacement. Usually, a vehicle must have major mechanical issues and a history of repeated unsuccessful repairs to qualify. The requirements vary by state.
The car dealership explicitly allows for returns in the contract
While rare, some car dealers offer short-term return windows, giving car buyers a limited number of days and mileage to try out their new vehicle. It’s important to read the fine print before signing, as the dealer may carve out stipulations to refuse a return, or they may charge a restocking fee of several hundred dollars to take a car back.
You can prove the seller committed fraud in selling you the vehicle
If a salesperson or dealership misrepresented the car’s condition, mileage, or history, you may have grounds for a return. You must be able to prove this, though, and it may require taking legal action.
There’s a financing issue
It’s possible that a dealer may allow you to drive off the lot without receiving final approval on your auto loan. Should that happen and the financing falls through, the dealer will call you and typically ask you to accept worse terms or return the vehicle. In this circumstance, you should look over the contract and, if you suspect you’ve been misled, contact your attorney general’s office for guidance.
There’s one other circumstance worth mentioning. Buyers who take out a car loan and fail to make their monthly payments may be asked to voluntarily surrender their vehicle back to the dealership. However, this type of vehicle return is not without consequences: It will leave a stain on your credit report.
Return Policies When Buying a Car Online
As noted above, online car-buying platforms, such as CarMax and Carvana, often allow returns within a set time frame, usually seven to 30 days. However, vehicles must be returned in the same condition and within the stated mileage limit. Always check the return policy before purchasing.
What Is the Federal Cooling-Off Rule?
The Federal Trade Commission (FTC) has outlined a “cooling-off rule” that gives consumers three business days to cancel certain sales made at a buyer’s home or workplace or at a temporary location. Despite what many people believe, this federal law does not apply to motor vehicles, however.
In California, dealerships must offer buyers the option to purchase a two-day contract cancellation agreement on used cars under $40,000. The buyer doesn’t have to accept the offer, and if they reject it, they’ll have no cooling-off period.
What if the Car Is a Lemon?
Every state and the District of Columbia has a lemon law on the books, allowing purchasers of new yet defective vehicles to return the car to the dealership for a refund or replacement. In some states, such as California and New York, the law extends to used and leased cars as well.
If your new vehicle has serious mechanical defects, you may qualify for relief under your state’s lemon law. To file a lemon-law claim, you typically must prove:
The defect significantly affects safety or drivability.
The manufacturer or dealership has failed to repair the vehicle after multiple attempts within a certain time frame (often dictated by the length of the warranty).
The vehicle has been out of service for an extended period.
If you suspect you have a lemon, review your state’s law, gather documentation of all the vehicle’s issues and repairs, and contact the manufacturer to report the problems. You might also wish to contact your state attorney general’s office or the Better Business Bureau for guidance.
Can You Return a Financed Car?
As with a purchased vehicle, you can’t return a financed car without cause. That said, if you fail to make your auto-loan payments on time, the dealership will eventually come to collect the vehicle, unless you opt to:
Refinance
Talk to your lender about refinancing to see if you can get a more favorable interest rate or a longer loan term to make your monthly payments doable.
Surrender the car
A voluntary repossession is better than a forced one, though both will hurt your credit score.
Can You Return a Leased Car Early?
Returning a leased car early is usually possible and outlined in the lease contract. That said, most contracts require the lessee to pay the difference between the lease balance and the vehicle’s market value as well as an early termination fee. That means, depending on how much time remains on the lease, it could cost you more overall to end a lease early than it would to simply carry on making monthly payments until the lease expires.
