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Understanding Your Rights: Can You Cancel a New Car Deal?

Generally speaking, the buyer has no right to cancel a new car deal. In a door-to-door sale, the buyer has what is known as a three day right to back out of a deal, or to rescind a contract. In the case of a mortgage loan, the purchaser also has the right to change his mind within three days. Unfortunately, this is not the case in the new car sales arena. Before the buyer enters into any written contract for the purchase of a new vehicle, he must be certain that he is getting exactly what he wants, at the price he wants. The only exceptions to the foregoing are situations where fraud is involved, or where a state "Lemon Law" may come into play and the buyer may be able to get his money back, or get a different vehicle to replace the first one he bought.

How to Cancel a New Car Deal

Step 1

Ask the new car dealer if he will allow you to back out of your contract. He does not have to let you do this, but it does not hurt to ask, especially since there may be no other way out.

Step 2

Consider whether or not a fraud may have been perpetrated against you. If the new car dealer has misrepresented or failed to disclose an important fact concerning the car you have contracted to purchase, you may be able to cancel the new car deal.

Step 3

Consider whether or not your state's "Lemon Law" may apply, to see if you can cancel your new car deal under this exception to the general rule. In most states the new car buyer will need the following: (1) A major defect must be discovered in the car you have purchased, and this major defect must be covered under warranty, and (2) The major defect must remain unfixed after a reasonable number of repair efforts have been completed by the dealer or manufacturer.

Tip

Some examples of new car dealer fraud include rolling back the odometer, failing to disclose that the automobile in question had been involved in a wreck and failing to disclose that the car you contracted to purchase was previously a "lemon." If you have simply changed your mind about the new car you've contracted to purchase, it doesn't hurt to ask the dealer to let you back out. He may let you back out, but may keep your deposit in any event. In some instances, your remedy under a state's "Lemon Law" may be a replacement vehicle, and not a full refund of your money.

Warning

Do not sign a contract to purchase a new car unless you are sure you are getting what you want and you are sure that you are getting it at the price you want. Despite rumor to the contrary, there is no right to cancel a new car deal.