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Can You Rescind an Auto Purchase

How long do I have after a purchase to return the vehicle because of breach of contract?

How long do I have after a purchase to return the vehicle because of breach of contract?

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Updated: Oct 20, 2014

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Highlights

  • Learn about the common misconception of a "cooling off period."
  • Find what conditions a car sale contract can be voided.

Generally speaking, there is no time period during which you can return a vehicle and cancel the sale. The existence of this right, called a “cooling-off period,” is a common misconception among American consumers. Once you sign a purchase contract with a dealer, you are basically stuck with the car, unless you can prove that the dealer intentionally misled you about some aspect of the contract or vehicle, in which case you can sue the dealership and finance company in an attempt to have the contract voided. In real life, it is almost impossible to prove that a car salesman lied to you about a vehicle, as you likely have no written evidence to back up your claim. This type of case is basically your word against the dealer’s word, which makes proving wrongdoing very difficult. In addition, purchase agreements are usually written to favor the dealer, so establishing that the dealer breached the contract will likely be an uphill battle.

You will almost never find a dealership who will willing accept the return of a vehicle and the cancelation of a sale because the buyer alleges breach of contract or buyer’s remorse. If you believe that the dealership intentionally misled you about the terms of the contract or the condition of the vehicle, you can sue to have the contract voided, but proving these allegations will be difficult. I encourage you to seek the advice of an attorney if you feel that you may have a case against a dealership for breach of contract. An attorney licensed in your state will be able to advise you of the strengths and weaknesses of you case, and whether filing a lawsuit is appropriate.

I hope that the information I have provided helps you Find. Learn. Save.

Best,

Bill

www.bills.com

74 Comments

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  • NB
    May, 2014
    Nicky
    I bought a Honda EX in Maryland over the weekend. I am not happy with my purchase.

    1. I miss having leather seats so I should have gone with a EX-L.
    2. The dealership at first told me at the beginning of the discussion i can get a 0% loan. After spending 5 hrs at the dealership i ended up leaving with a 4.46% interest.
    3. I found out now that their add-on extended warranty is more expensive than other dealers.

    I really want to return the car and go with another dealer. I went back today to speak with someone but they were too busy to talk to me and request i come back the following day. I feel like I'm getting the round around from them and don't want to do business with them at all. My questions are:

    1. Do I have to give them the title for the car I traded in? If they are being difficult i want to do the same thing.
    2. When processing my loan she did not ask for my green card or passport? They only have my license. When i went in today she asked me for it. I told her i want to return the car and Im not giving any documents.
    3. By not providing the documents will they have to take back the car?
    4. How would this all impact my credit if i do this?
    0 Votes

    • BA
      Jun, 2014
      Bill
      Unfortunately, unscrupulous car dealers drag out car purchases in such a manner that the customer is so worn-down by the ordeal they buy anything to free themselves from the showroom. Your buyer's remorse is common.

      For the benefit of other readers, know exactly what you want and how much you can afford before you leave your home. Also, your first stop should be your bank or credit union to learn how large of a loan you qualify for, and the interest rate you qualify for. The buying process will be much more satisfying if you know exactly what you can afford and the model you want before you step foot in the first dealership.

      On to your questions, Nicky:

      1. There is no cooling-off period when you buy a car. If you signed a contract to trade-in your old car, you are in breach of contract if you fail to deliver the vehicle as promised.
      2. I do not understand why the dealership's finance department would require your green card. Your state-issued driver license should be sufficient to establish your identity. I imagine the finance company is asking for the green card because you can't provide a valid Social Security number.
      3. As mentioned, you are in breach of contract if you do not deliver the vehicle with a clear title as promised. I am guessing if you were residing in the US illegally (without a visa or green card), the finance company would not approve you for loan. If you were an illegal resident, then my guess is it would require you to surrender the vehicle as a voluntary repossession.
      4. If leather seats and your credit score are your highest priorities, then trade-in the vehicle and buy the model with the leather seats. This is a costly option, but then you get the model you want with no impact on your credit score.

      A voluntary repo will cause the most damage to your credit score, and will ultimately cost you the most in fees. Try to avoid a repossession.

      Our advice? Make nice with the dealer, and try to negotiate the best possible deal you can when you trade in the car with cloth seats for the model with leather seats.

      0 Votes

  • CG
    Apr, 2014
    Chris
    We recently entered into a sales contract with a dealer, but have not taken delivery of the car. They originally told us the delivery would be 7-10 days. It has now been 17 days. I live in Colorado, is it possible to cancel the contract or refuse delivery of the late vehicle? Or am I stuck with the vehicle since there is really nothing in writing guaranteeing delivery?
    0 Votes

    • BA
      Apr, 2014
      Bill
      You need to have your sales contract reviewed by an attorney. The written language as well as verbal representations given to you by the dealer may give you legal grounds to void the contract. An attorney will be able to guide and advise you.
      0 Votes

  • EC
    Feb, 2014
    Eli
    I live in Fresno Ca. I bought a car sight unseen from a dealership in Omaha Nebraska. A 1986 Porsche 951. The dealer is a "classic & sports car" dealership specializing in European cars. My salesman was none other than the owner of the dealership. Ihad been searching for several months for a low mile, first class condition car that would be considered club event winning condition or just shy of concours condition. Thru a month's negotiations & assurance this car met my needsh& desires, I agreed to buy it for an above market value. The dealer sent me all of the required purchase documents/contracts via mail. My enclosed transporter arrived ahead of schedule to pic up the car. I signed & emailed a photocopy of the Bill Of Sale to the dealer in order for them to release title. When the Porsche arrived in Fresno, it was not of the condition as described. In fact it was a 5 out of 10 when I had been sold a 11 out of 10... Ironically, I maintained possession of the unsigned purchase contract, tax disclosures & other forms. The delivery date was 8/13/13. On the 23rd I received 2 emails requesting signed documents in order to finalize the transaction. I've since contacted my attorney & dealt with the BBB of Nebraska. Its now Feb 27 2014 & I'm beginning arbitration. Simply based on the cactfact cactfact that iI have not signed any purchase contracts, should iI expect this to be an oopen & closed case with arbitration?
    0 Votes

    • BA
      Mar, 2014
      Bill
      Consult with a California lawyer who has experience in consumer law to learn what cause of action you have against the dealer.
      0 Votes

  • TB
    Feb, 2014
    Teri
    We were looking at cars, knowing that we were waiting on a settlement check from our insurance. The dealership said we should just "get it done" and could give them the cash when we received the check. We gave them a check to be deposited upon receipt of our insurance payment and a the insurance company sent a promissory letter that we are guaranteed the funds. Due to a mistake on our insurance's part, we have not yet received our money. The insurance company called the dealership and acknowledged that it was their fault, and we would in fact get the money, but it would be 4 more days until we received payment. Our bank requires a 7 day hold so it would be over a week until we could pay the promised cash, so the dealership required us to return the car until we could give the payment. Are we required by law to adhere to our contract with the dealership? They have possession of the car and will not release it to us for another 10 days, but have a signed contract as of two weeks ago. I am unhappy with the way we have been treated. I understand their reason, but they will not take our calls, and my husband was left stranded with no ride upon returning the car. The customer service is irritating, and I am considering just going else where if I am not legally bound to the car.
    0 Votes

    • BA
      Feb, 2014
      Bill
      Take your sales contract to a lawyer in your state who has consumer law experience. Ask him or her to read your contract and give you an opinion if you can cancel the contract without recourse.
      0 Votes

  • PS
    Dec, 2013
    Patti
    I bought a used car on December 3, 2013. We wanted to put it in my 24-year old daughter's name, was told from the dealership her credit was not good so we should just put it in my name. Two weeks later, the finance company contacted me wanting to know why she was not on the loan and that this was not legal. I think it was called a straw-man purchase. We had to go back in and sign papers again with her on the loan. Yesterday, while driving the car it started smoking and smelling like it was on fire. We had it towed to the dealership. I called this morning and they told me the car needs a new clutch. They want me to pay for it. It has been driven only 80 miles. My first car payment is not due until 1/16. What can I do? Can I get out of this car loan?
    0 Votes

    • BA
      Dec, 2013
      Bill
      Contact your state attorney general to learn if your state has any product defect laws that apply to your situation.

      I realize what I am about to write will not be helpful to you now, but for the benefit of other readers, always have a mechanic of your choosing inspect a used vehicle before buying. (Here a mechanic would have detected the bad clutch immediately.) Run a Carfax report to learn if it's a flood vehicle, on a salvage title, or had its odometer tampered with. The more you know about a vehicle before you buy it, the less likely you will be surprised later.
      0 Votes