Can You Return a Car You Just Bought?

Returning a Car Quick Facts

• Generally, no federal laws outline a return period following a vehicle’s purchase.  
• State laws may vary, but generally, they mirror federal requirements.
• Lemon laws allow customers to return seriously flawed vehicles and get a full refund from the automaker.

Buying a car can be a life-changing decision, but what happens if you want to return a car you just purchased?

Once the vehicle is purchased, returning it gets complicated, especially if it’s been used. Many drivers believe there’s a return period after buying a vehicle when you can give it back for a full refund, as provided by law.

So, is it true? Is there a car return period? We have the answer.

• Can I Return a Car I Just Bought?
• Federal Cooling-Off Rule
• What If My Car Is a Lemon?
• What If I Got Ripped Off?
• How to Avoid Buyer’s Remorse
• A Dealer’s Return Policy
• Alternatives to Returning a Car

Can I Return a Car I Just Bought?

Generally, no federal law outlines a return period following a vehicle’s purchase.

Unlike many retail purchases, automobiles lose significant value as soon as they leave the lot. Immediate car depreciation plays a vital role in consumer protection laws surrounding auto sales.

The valuation of a car depends on whether it is considered new or used. A new car’s price includes the  manufacturer’s suggested retail price (MSRP) of a new vehicle set by the automaker, plus any dealer markups, add-ons, and other factors. After a contract is signed and money changes hands, the buyer’s name appears on the vehicle’s registration, which means the car is no longer “new.” If dealers resell returned vehicles, they must sell them as used and most likely at a loss over a new model.

According to the Federal Trade Commission, federal law does not require dealers to provide car buyers the right to cancel a transaction. State laws may vary, but in general, they mirror federal requirements.

Where it exists, individual dealerships may have a policy of allowing returns within a certain period after purchase, but this is not a legal obligation.

Car companies and dealers generally don’t have a return policy. That means drivers will almost always find themselves out of luck if they want to return a car as if they were returning a lamp or a sweater.

The bottom line: You can’t return a car just because you changed your mind about it or because the salesperson was pushy unless it’s written into the sales contract that you can.

Reasons to Return a Car

While it’s near impossible to return a car you purchased, there are some circumstances where it’s possible. Read on for some scenarios.

1. Lemon. If you made several attempts to get the car fixed, but it’s still broken, lemon laws allow car buyers to return seriously flawed vehicles and get a full refund from the automaker. Read more about lemon laws below.
2. Financing falls through. We’ve heard stories about consumers thinking they purchased their vehicle, taking spot delivery, and driving off in their new ride. Later, they discover that their financing has fallen through. In these cases, the lender asks the buyer to return the car to the dealership. Sometimes, there’s a dealership offer of a higher interest rate. Be wary of yo-yo financing and spot delivery, where you sign the contract to buy the vehicle and drive away before financing goes through. PRO TIP: Always check your credit before buying a car. Make sure to obtain car financing quotes from several sources and only drive away with the car when the agreement and financing are secure.
3. A too-high car payment. Discuss your options with your lender if you need to return the car because you can’t afford the payment due to unforeseen circumstances like losing a job or divorce. While this scenario is not ideal, if your lender suggests a voluntary repossession, it will relieve you of the payments. You will also avoid embarrassment and excess lender fees from an involuntary repossession. Either scenario leaves a mark on your credit.

How Long Do I Have to Return a Car?

Technically, you can’t return a vehicle once you sign the binding paperwork for the loan. However, if you took possession of the vehicle but did not sign any binding paperwork or loan, you can return the car to the dealership because, officially, you haven’t purchased the vehicle yet. Also, lemon laws allow customers to return seriously flawed vehicles and get a full refund from the automaker, but that could take months.

Federal Cooling-Off Rule

The Federal Trade Commission’s “cooling-off” rule, established in the 1970s, allows consumers three days to cancel a transaction.

This rule often gets tossed around if a consumer wants to return a car they just bought. It applies to purchases of more than $25 and specific sales tactics like the ones made in your home by pushy door-to-door salesmen. It also applies to sales conducted at a place other than the retailers’ usual place of business or permanent retail location.

With more consumers buying cars online with contactless delivery at home, you would think these transactions would fall under the FTC’s rule. But that rule does not apply. There’s no legal protection for consumers who have buyer’s remorse at the federal or state level when buying a new car.

The same applies to used cars. However, according to the FTC, dealers must give consumers the right to cancel in some states. In other states, dealers determine if a consumer can return a car after a few days for a refund.

Before you purchase any vehicle from a dealer, ask about the return policy, get it in writing, and read all your documents carefully. Look for dealers that offer money-back guarantees or even “no questions asked” return policies.

 What If My Car Is a Lemon?

One major exception to what we’ve written above is “lemon laws.” Lemon laws allow customers to return seriously flawed vehicles and get a full refund from the automaker. These laws exist in every state, but criteria vary for what makes a car a lemon. Generally, the customer must prove that the vehicle has significant issues. If the car makes a funny sound, that probably won’t be enough to qualify it as a lemon.

Here’s a sampling of lemon laws.

• In Hawaii, for example, only vehicles with a defect, malfunction, or condition that substantially impairs a car’s use, market value, or safety when still covered by the manufacturer’s warranty would be protected by Hawaii’s lemon law. The vehicle owner must also make good-faith attempts with the manufacturer to repair the vehicle.
• Similar lemon laws apply in California. The car buyer must discover the defect within 18 months of delivery or 18,000 miles of use. The lemon law covers all new, used, and leased cars still covered by the manufacturer’s vehicle warranty. If a vehicle is deemed irreparable after good-faith attempts to fix its flaws, manufacturers must replace the car or provide financial relief to the consumer. However, they may subtract the depreciated value.
• State law in New York reflects those in Hawaii and California, and consumers must report the problem directly to the manufacturer or its authorized dealer.

The definition of significant issues and “good-faith” repair attempts varies from state to state, but many considerations are consistent across the nation.

What to Know and Steps to Take

• Know your warranty information: If your car has a significant problem, manufacturers must cover it under warranty.
• Who to work with: When negotiating serious problems, consumers must generally work with the manufacturer, not the dealer.
• Keep a log of repairs: Consumers must discover serious issues within a specific time frame following the vehicle’s purchase, typically within one to two years. They must be persistent, requiring several repair visits.
• Minor mechanical issues: If you have a minor mechanical issue that the dealer can fix under warranty, that’s usually not enough to qualify for vehicle return under your state’s lemon law.
• Research lemon laws: If you think you can return your car under the lemon law, check your state regulations to determine if you qualify. Statutory definitions of a lemon can be quite complex. Find reliable government resources for the state where the car was purchased when searching for rules and regulations.
• Tap government resources: If all else fails, start with resources sanctioned by a state office, like the attorney general or a consumer protection agency, not those provided by legal services or law offices.
• Hire an attorney: In some cases, an attorney may be necessary. Unfortunately, for drivers who believe they’ve bought a defective used car, the lemon law may exclusively apply to new vehicles. In these instances, the only way the lemon law can pertain to a used car is to make sure you buy the vehicle with a written warranty.

What If I Got Ripped Off and the Car Sale Wasn’t Fair?

If you genuinely believe you’ve been ripped off or if you found out you paid way too much for your car, try speaking with the dealership’s general manager or owner.

Whatever you do, don’t storm into the dealership screaming at the staff. Remember that dealers have no legal obligation to provide guarantees to buyers. The promises they offer are entirely voluntary. They do so primarily to ensure their customers are satisfied with their purchases.

Dealers use many tactics to project trust at the point of sale. These tactics are not designed to provide a remedy once the car has left the dealership. The more respectful and reasonable you are when making your case, the more likely you will reach a satisfactory solution.

When you sign a sales contract, it’s tough to put all the blame for a bad deal on the dealership or the salesperson. It’s best for you, the consumer, to do your homework before buying a car so you can be confident you’re getting a fair deal.

RELATED: How to Buy a Car

How to Check for a Fair Price

Wherever you are in the process of buying a car, you’ll need to know what price is fair for the vehicle.

Use our used car valuation tool to determine the reasonable purchase price for the vehicle you have your eye on or the car you want to trade in. It’s a great first stop for assessing market value.

More Car Buying Research Tools

• Check reviews. Start by researching cars you’re interested in. Look at reviews and comparisons.
• Know what you can afford. Find the right vehicle for your budget by using our car affordability calculator.
• Find reputable dealers. Explore our dealership listings to find a car dealer with a good reputation near you.

How to Avoid Buyer’s Remorse

Ample research is the best way to be confident about your decision to buy a car. Use the below questions as your guide.

• What will you use your vehicle for? Work, travel, family vacations, commuting only?
• How often will you drive your vehicle?
• Who needs the car in your household?
• How many people will you transport regularly?
• What features do you need for safe driving where you live?
• Is your car’s environmental impact important to you?

These are just a few common questions that will guide your research. For example, consider the fuel economy rating of a gas-fueled, hybrid, or electric vehicle if you are an urban commuter.

If you use a car only to get to and from work, choose a smaller vehicle that is easier to park and cheaper to fill at the pump. A plug-in hybrid is also a great option in this scenario. 

On the other hand, if you enjoy recreational driving or live in an area with hazardous driving conditions, like heavy snow or ice, consider a car with all-wheel drive. You might also consider a vehicle with ample cargo capacity and a towing package for your gear. 

Most importantly, take your time to think about your car from every possible angle. Like a house, buying a car is a decision with a long-lasting financial impact. The more you prepare, the better off you’ll be. 

Some people get car fever, fall in love with the first car they test drive, and end up with a vehicle that doesn’t work for their budget. Give yourself your cooling-off period before pulling the trigger on a new car purchase. Don’t be afraid to tell the dealer you’d like to sleep on it before you decide. 

Waiting can be tricky, but since a car is such a big purchase, you’ll be glad you gave yourself some extra time to think about it.

A Dealer’s Return Policy

Remember, the option to return a car after purchase is at the dealer’s discretion. It’s not a state or federal law. However, returns do happen, but a dealer’s return policy generally applies to used or certified pre-owned cars. 

Some dealers may honor a used car return if you bring the vehicle back within a certain number of days or miles. Other dealers and certified pre-owned programs may have an exchange program that lets you return a vehicle and exchange it for another if you’re unhappy after a specific time frame. For example, Mercedes-Benz offers authorized dealers to return its Certified Pre-Owned cars of equal or greater value (difference paid by buyer) within seven days or 500 miles, whichever comes first.

Some used car dealers began offering 24-hour test drives and 30-day satisfaction guarantees on used cars (up to 1,500 miles) in 2021. While this standard eclipses most offerings in the industry, check the car dealer’s policy before you sign on the dotted line. 

Be sure to inquire about these guarantees and return or exchange programs when you visit the car dealer showroom. You can also check for it online. If your dealer offers a satisfaction guarantee, understand that the FTC regulates these advertisements, and dealerships must adhere to certain disclosures when making such guarantees. Either way, protect yourself and obtain a copy of the terms in writing for future reference. 

If you’re unsure about your vehicle choice, ask the dealer to write a return guarantee into the contract when buying a car. Although most dealers will likely refuse to do it, some may accept the offer to earn your business. Meanwhile, take advantage of extended test drives that might allow you to keep the car overnight and log about 50 miles to help ensure the car is a good fit before buying it.

Can I Return a Car I Bought on Finance?

The option to return a car after purchase, including those financed with an auto loan, is at the dealer’s discretion. It’s not a state or federal law. And keep in mind that a dealer’s return policy generally applies to used or pre-owned cars. Lemon laws allow customers to return new vehicles with major mechanical issues and get a full refund from the manufacturer. These laws include financed vehicles. If the car is not a lemon, your options to return the car include trading in the car for another vehicle or refinancing the car loan.

Online Car Dealers’ Return Policies 

Unlike a traditional brick-and-mortar dealership, you can’t see the car in person and take it for a test drive when purchasing from an online used-car marketplace. Fortunately, these companies usually have a return policy for unhappy customers. 

A 7-day return period is standard, with some companies offering a driving range of 400 miles before the sale is final. You void these return policies if you modify or damage the car in any way, and the shipping costs are typically nonrefundable. Additionally, they do not apply if taking out a loan on the vehicle.

Can I Return a Car I Bought Privately?

There is no guarantee that you can return a car you purchased from a private individual. It’s up to the individual seller’s discretion whether to allow a return of the vehicle.

Alternatives to Returning a Car

If the dealer doesn’t take your car back, check the options below. 

• Refinance. When you purchase your car with a car loan, there are times when it makes sense to refinance your loan to a lower rate. That is if one exists in today’s world of higher interest rates. While you still need to keep the vehicle you may not want, you may be able to reduce the monthly payments or shorten or extend the term of the loan you are required to repay. Both may soften the blow of being stuck with a car you don’t want. 
• Sell the car. If you absolutely don’t want the vehicle, you might be able to sell the car in a “like-new” condition. The IRS generally defines a new car as one that is not registered for personal use with a state Department of Motor Vehicles. Once the car is registered, it’s no longer a new vehicle. However, it’s rare for a car to sell with zero miles on the odometer. Most cars arrive with “delivery miles,” the miles required to get the car to the dealer. If your car has fewer than 200 miles, you might be able to recover some of the depreciated value. 
• Upgrade your options. If you have no other options, try upgrading the model you purchased with optional aftermarket features. An improved sound system or other enhanced performance features can make the car more enjoyable. Be advised, however, that only an experienced auto technician should perform the work. Don’t take it upon yourself to make these kinds of modifications unless you have experience working on cars.  

Related Articles About Buying a Car:

• Car Invoice Price and Dealer Markup: Tips for Buying a Car
• How Do You Trade In a Car You Haven’t Paid Off?
• Car Window Sticker: Everything You Need to Know

Editor’s Note: This article has been updated since its initial publication.