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Debunking Car Buying Myths

Like death and taxes, the prospect of buying a car looms for (almost) everyone at one point or another. Whether new or used, stripped down or loaded with all the accessories, there’s a car out there for all of us. Sadly, based on the calls I receive, there seems to be an equal number of myths about the legal aspects of buying a car.

The easiest one to expose is the three-day return period myth. Let there be no mistake – there is no three-day period during which you can return your newly purchased automobile and receive a refund. Illinois law does provide its citizens with such a right to cancel for certain consumer transactions (door-to-door sales, home repair, and gym contracts, for example), but there is such right for automobiles. A few dealers may offer a “no questions asked” return policy or a “money back guarantee,” but this is not mandated by law. If your dealer does make such an offer, make sure to get it in writing.

Almost as easy to debunk is the myth that the lemon law will cover whatever vehicle you purchase. As many car buyers have belatedly discover, it just isn’t true. The lemon law provides protection to purchasers of vehicles that spend an inordinate amount of time in the service shop. Specifically, the law covers a car that has a defect that substantially impairs the use, value or safety of the vehicle and that can’t be repaired in at least four attempts, or a car that is out of service for a total of more than 30 business days. However, it only applies to new cars, light trucks and recreational vehicles. It does not apply to used cars or motorcycles – a fact most people do not realize, often to their surprise.

Assuming the lemon law does apply to your newly purchased (or leased) vehicle, many people manage to mangle the procedure and, in the process, lose the protection offered by this law. The most common error is waiting too long to start the process. The law protects only cars that are less than twelve months old or that have fewer than 12,000 miles. And the process must be started within twelve months from the purchase.

The second most common error is to make a claim under the lemon law with the dealer. The law actually requires that the claim be made through the manufacturer. Some buyers, having started the process through the dealer, find out that they needed to be working through the manufacturer only after that window has expired. The best place to find information on how to start the process is in your owner’s manual.

Another myth about the lemon law is that it is handled like a lawsuit. Instead, claims under the lemon law are handled through what is known as a Third Party Dispute Resolution Program. You may file a lawsuit only if you are dissatisfied with the result of that process. On the other hand, and of benefit to a car buyer, is the fact that the manufacturer can’t challenge the findings of the Resolution Program. Remedies available to the successful claimant generally include receipt of a replacement vehicle or the manufacturer buying back the car less the decreased value due to the miles actually driven.

What protection, then, is offered to the buyer of a used car? Again, misconceptions and myths abound in this regard. The main myth regarding used cars is that they all come with a warranty no matter what the dealer says. Although the law generally provides for what are called “implied warranties” in most purchase situations, it’s quite easy for a dealer to avoid having to stand behind such a warranty.

The easiest way for a dealer to dispense with such a warranty is to sell the used car “as is.” How can you tell if a car is being sold “as is”? The Federal Trade Commission requires all dealers who sell more than six cars in a year to post a “Buyers Guide” in every used car offered for sale. That Buyers Guide will state whether the car is being sold with a warranty or “as is.” If it is being sold with a warranty, the terms and conditions will be spelled out in the Buyers Guide. If your dealer promises to make any repairs to a car being sold “as is,” it will not be enforceable unless it’s in writing.

Finally, perhaps your child or best friend may ask you to co-sign on his or her automobile purchase loan. Be warned that your act of generosity or parental largesse carries with it significant responsibility. Under most circumstances, co-signing on a car purchase means that you will be responsible if your child/friend defaults on the payments.

by Thomas C. Pavlik, Jr.
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