One of the most common questions asked by consumers is whether there is a "Cooling-off" period under California law. Virtually every car sale contract in California includes fine print that allows a dealer to demand return of the vehicle within 10 days. Unfortunately, consumers do not have the same right.
Consumers Right to Return a Vehicle
Buying a Cooling-Off Period: The 2-Day Right to Return
In California, you can buy a cooling-off period for a used vehicle that costs less than $40k, but it only lasts 2 days, and you have to buy it before you leave the dealership with the vehicle! Unsurprisingly, no one suspects that the shiny car on the lot will have problems within the first few days - if they did, would they buy it? We have looked at literally thousands of consumer vehicle purchases, and have never seen a deal where the consumer purchased the overpriced 2-day cooling-off period. Many dealers will tell you that you are not allowed to return the vehicle because you signed a form declining to purchase the expensive cooling-off period. This is a lie. Even if you did not buy the 2-day cooling off period, you may still be able to return your vehicle if the dealership did something wrong.
Right to Return a Vehicle Due To Dealer Misconduct
Virtually every illegal dealer practice discussed on this website may allow you to return your vehicle and get your money back.
Dealer’s Right to Demand Return
The standard California car contract only allows the dealer 10 days to find financing. If the dealer cannot honor your agreement, they must notify you that they are cancelling the contract. You must return the vehicle to the dealer. The only thing the dealer can do is take the car back, refund you 100% of your money, and return your trade-in vehicle, if you had one. The dealer cannot charge you for mileage. Sometimes a dealer will try to blame you, telling you that your bad credit is to blame, or that you must sign a new contract, or pay more money down, or pay a higher payment. These are all lies. Worse, dealers will threaten to keep some or all of your down payment, or to put a repossession on your credit. This is against the law.
Dealers regularly sell vehicles without first getting consumers approved for a loan. This is called a “spot delivery.” In order to protect themselves, dealers insert fine print on the back of the contract that allows them to demand return of the vehicle if they cannot find financing. However, this right is limited, and is regularly abused. If the dealer does not tell you to return the vehicle within 10 days, the deal is final. After 10 days, the dealer cannot demand that you return the vehicle, unless you provided incorrect information on your credit application.
Over 10 Days
After 10 days, the deal is final. If a dealer tells you they could not find financing, it is the dealer’s problem, not yours. If the dealer cannot assign your loan to a bank, the dealer must be your bank. You must send your monthly payments to the dealer, just as if they were a bank. Many dealers will threaten repossession if you refuse to return the vehicle when they ask. If you pay the dealer as agreed, and they repossess your vehicle, the dealer is liable for the theft of your property (called “conversion”), and you may be entitled to damages, including punitive damages.