07/05/2006
With enactment of the Car Buyer's Bill of Rights, effective July 1, consumers have a few more legal rights when they buy or lease a used car. This new Bill of Rights applies to used cars purchased from a dealer with a purchase price of less than $40,000. It does not apply to vehicles bought primarily for business or commercial purposes, mobile homes sold after July 1, 1991, or motorcycles or off-highway motor vehicles subject to identification.
Perhaps the most important benefit of the new law is that you will have the right to obtain a contract cancellation option agreement when you buy. This simply means that whereas in the past, used cars did not have any "cooling-off" period during which you could change your mind about buying the car, you now may purchase that right, if you wish. You will most likely have to pay for this cancellation option, and its price may range from $75 to $250, depending upon the price of the car in the case of cars selling for up to $30,000, and up to one percent of the purchase price in the case of cars selling for more than $30,000. By purchasing the cancellation option, you will have until the close of business on the second day after you take delivery of the vehicle to decide whether or not you want to cancel. During that time, you may drive up to the maximum amount of miles specified in the contract (but not less than 250).
If you do cancel, you will also have to pay a restocking fee ranging from $175 to $500, again depending upon the price of the car. From this figure, though, you will be able to deduct the amount you paid for the cancellation option. If you comply with all cancellation requirements, you are entitled to a full refund no later than the second day following the day you cancelled.
For more details on this new law, including information about the return of your trade-in, what happens if you cancel a purchase and then go to the same dealer to buy another car, what has to be itemized in your contract, the circumstances under which a vehicle can be advertised as "certified," and more, access our complete report from "Topics of Special Interest" or call and request a copy of Report no. 4, "Used Car Buyer's Bill of Rights."
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