When Is It Too Late to Back Out of a Car Deal?

Backing out of a car deal with a private seller requires cooperation from both parties. The same goes for returning a car you purchased from a dealership. 

However, there are certain forms of documentation or situations where you can back out of a dealership car deal. The bottom line is that you should never enter into a contract unless you’re absolutely certain of and in agreeance with the terms. 

Dealerships are obligated but not necessarily legally required to include return policies. However, this depends on individual state rulings regarding vehicle return policies. 

Here are a few examples where states offer certain return/refund protections for consumers: 

• California: State laws require dealerships to post their refund policies clearly. If not posted, consumers have up to 30 days to return the vehicle for a full refund. 
• Massachusetts: Dealerships that don’t post their return policy requirements, typically done at the point of sale, must grant customers a reasonable time to request a refund. 
• Virginia: The Consumer Law Group of Virginia advises consumers that the dealership retains the right to cancel a car-buying contract if a lender cannot be found. The customer then has 24 hours to return the car in exchange for the trade-in vehicle and any down payments. Consumers who fail to return the vehicle in this timeframe face repossession. 
• Florida: According to Florida state laws, dealers must clearly post refund policies. Failure to post the policy grants the consumer up to 20 days to return the vehicle for a full refund. 
• Maryland: The state laws in Maryland mirror Florida’s, except for setting the time frame for a refund request at a reasonable time instead of a specific number of days.

Dealerships may also offer what’s known as a contract cancellation option. This addendum to the main car-buying contract can cost extra, and you may have to request it specifically. 

Contracts with this agreement attached allow you to return the vehicle and annul the contract when specific circumstances apply. However, dealerships are not legally required to grant consumers access to this addendum. 

Cooling-Off Contracts 

Many people cite the Federal Trade Commission’s Cooling-Off Rule as an avenue for backing out of a car deal. However, this rule expressly does not apply to vehicles. 

Instead, you should consult the contract you may or may still need to sign. Look specifically for language suggesting a return or refund policy. 

Some dealerships will incorporate a return clause into their contract as a bargaining chip. For example, many people ask if you can negotiate with CarMax. The answer is no because CarMax offers a 24-hour take-home test drive and a 30-day or 1,500-mile return policy.  

If you experience any of the following, it’s a good idea to walk away from negotiations:  

• Pushy salespeople: Many consumers avoid dealerships altogether because of the pressure they expect from salespeople. That commission can cause strong behaviors that translate to high-pressure situations where urgency can result in a poor decision. 
• Lack of negotiations: Some dealerships refuse to negotiate. However, negotiating the price varies greatly from discussing the cost of options, add-ons, and other services. If the dealership isn’t willing to participate in give-and-take, it’s worth walking away. 
• Yo-yo sales: One of the common tricks car salesmen use is to get you to sign a contract whereby the lending party has yet to agree to any terms. Should the dealership fail to find a lender, you must bring the car back and either agree to new (less agreeable) terms or cancel the deal entirely. Finding a third-party lender beforehand can help you avoid this situation.
• The deal doesn’t suit you: You should expect negotiations when buying a car, but don’t let the prize obscure your view of the deal at hand. Stay within your budget and allow yourself to walk away if the deal isn’t right, no matter how much you want that car. 

Researching a vehicle and a dealership before you hit the pavement is always good practice. For example, if you’ve been researching “Are Chevrolets good cars?” and find that an alternate brand receives higher resale value ratings, it’s not the dealership’s fault that you chose to purchase a Chevrolet anyway. 

The steps below do not guarantee that you will successfully get out of the legally-binding contract you signed. However, they can at least put to rest your “what ifs” and exhaust all revenues.  

Step 1 

Signing your John Hancock and taking possession of the vehicle are two different actions. You have options if you’ve not yet taken possession of the vehicle by accepting the keys and driving off the dealership lot. You can call your local Attorney General’s office to discuss your situation and seek counsel. Their office can advise you on what rights and protections you have. 

Step 2 

If you’ve already driven off the lot, it’s time to return to your paperwork. You’re obligated to do your due diligence in reading the car-buying contract in full before signing. However, you can return to the sections about refund policies and returns. See what rights your agreement grants you, paying close attention to timeframes and acceptable reasons for return. 

If you find a clause granting you the ability to return your car and dissolve the contract, immediately return to the dealership in person. Ask to speak to a sales manager or the general manager to discuss returning the vehicle. Keep a copy of your contract, just in case. 

Step 3

Should your car buying contract lack refund or return policies, you can still call the dealership to discuss your situation. You can contact your salesperson first as a courtesy, but they’ll need to refer you to a sales manager for further action. 

When discussing your contract with a manager, stay calm and speak honestly. Managers are less likely to sympathize with complaints about pricing and the fact that you simply don’t like the car. High-pressure sales tactics or not, you voluntarily signed a contract that binds you to specific legal terms. 

Whether or not a dealership will work with you to resolve the situation amicably for both parties is up to the individual representing the dealership. You can use your deposit as a bargaining chip. However, preparing a car for sale and delivering it does require significant manpower. Your deposit could transfer if you agree to purchase another car that offers lower payments. Again, it’s up to how the dealership wants to do business. 

Step 4

Consumers often return items because of significant issues that prevent the item from working properly. In the case of vehicles, there are several situations where faulty operation is cause for a refund. Lemon laws are one of the most popular scenarios. 

Lemon laws vary by state but give the consumer a right to a refund or replacement should the vehicle fail to pass safety inspections. Dealerships have so many attempts (typically three) to rectify the situation before the issue becomes a warranty matter. Consumers are compensated accordingly if the vehicle fails to meet the same standards after consulting a third-party service center. 

Vehicles that fail to pass safety inspections can also be cause for annulling a contract. These situations can arise if you think you were misled by the salesperson or the dealer failed to disclose a known issue with the vehicle. Proving your case can be difficult under these circumstances, and you might need to involve a lawyer. 

Step 5

Short of suing the dealership for damages and potentially spending more money than the situation warrants, you can also register a complaint through your local Department of Motor Vehicles. Search the National Association of Attorneys General for your state’s Attorney General’s office and lodge a complaint if you haven’t already. You can also write a review on the dealership’s Better Business Bureau profile.