General “Lemon Laws”
Every state has its own particular laws concerning the sale of automobiles. A car is considered a “lemon” if it has persistent operational problems that arise soon after the date of purchase. Some states have “lemon laws” that allow a refund or replacement of the vehicle if the problem has not been fixed after repeated efforts or the car has not been operational for a certain duration. It’s best to contact your local consumer protection office to find out more about the applicable laws in your state.
General Return Policy
Contrary to popular perception, dealers are not required by law to grant used car buyers a three-day right to cancel the purchase (sometimes expressed as a “buyer’s remorse” allowance). The right to return the car within a specified time only exists if the dealer expressly grants this option to the buyer (preferably, in writing if it needs to be enforced later). Dealers may present the right to cancel option as a “money-back guarantee,” “no questions asked” or “cooling-off period” return policy.
The FTC advises that before you proceed with any car purchase, ask the dealer specifically about the return policy, get it in writing and read it carefully. It’s also advantageous to review the written terms with the dealer for clarification to avoid misunderstanding.
FTC Used Car Rule
In an effort to both protect the consumer and encourage fair commerce, the FTC requires dealers (those who sell more than six cars a year) to post a “Buyer's Guide” in every used car offered for sale. Although the dealer is not required to offer a return policy, the buyer's guide must specify if the car is being sold “as is” or with a warranty. It also recommended that used car buyers obtain the original buyer's guide or a copy that came with the vehicle from the dealer.
A common custom for used car dealers is to offer the vehicle “as is.” This means that the car has no warranty. If you purchase the car with no warranty, you will be fully responsible for repairing any operational malfunctions and relieve the dealer of any further obligation. The "as is" status must be prominently indicated with a checked box on the buyer's guide at the time of inspection and purchase. If the buyer's guide indicates as is, but the dealer offers to repair the vehicle or cancel the sale if you’re not satisfied, make sure these promises are written on the buyer's guide to ensure enforcement if necessary.
Some states ban as is/no warranty conditions for used cars (e.g., Kansas and New York among others). The FTC provides more information about different state provisions and the rights of used car buyers including implied warranties, full and limited warranties, unexpired manufacturer’s warranties and the conditions for private sales.
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