How to Return a Vehicle with a Loan
Buying a car is a big commitment, but sometimes life takes unexpected turns that require you to return the vehicle and cancel the loan. If you’re considering returning a car in Ohio, you should be aware of your rights as well as your responsibilities. To help make this process smoother, let’s dive into how to return a car to the dealer in Ohio and cancel your auto loan.
Can You Return a Car in Ohio?
Unfortunately, there are very few circumstances in which a purchased vehicle can be returned in Ohio. It is a common misconception that motor vehicles are subject to the federal "cooling-off" rule. While this rule was designed to protect consumers in making large purchases automobiles are excluded. There are three scenarios in which you have the right to return your vehicle"
The vehicle suffers mechanical issues and qualifies as a lemon under Ohio’s lemon law
The sale contract was unfinished or not signed
A grace period was arranged in writing with the dealership or selling party
Your Rights as a Borrower in Ohio
If you want to return your vehicle, it is important that you understand your rights as far as Ohio law is concerned.
In Ohio, lenders must provide borrowers with certain disclosures regarding their auto loans that outline their rights. This includes the right of rescission, which allows borrowers to rescind the contract within one business day of signing it if they were misled or not provided with certain information.
Additionally, under the Ohio Consumer Sales Practices Act (CSPA), dealers cannot misrepresent the terms of a sale or finance agreement, or charge more than promised for services. Lastly, under Ohio law, consumers have four years from the date of purchase to file suit against a lender for any violations of CSPA.
Is There a Cool-Off Period?
The Federal "cool-off" period Rule is often discussed in relation to returning a vehicle. The Federal Trade Commission (FTC) dictates that certain purchases are subject to a 3-day period in which the item can be returned or the sale canceled. However, surprisingly new and used vehicles, even when the circumstances of sale meet those described in the rule. If there is no return policy or state cancelation period, it will likely be solely up to the dealer whether your return is accepted. Many states have their own laws about cool-off periods.
Some states offer a 3-day recession or "cooling-off" period. However, under Ohio law, consumers do not have a general right to cancel the purchase of a vehicle to get their money back.
Dealers Have Their Own Return Policy
If for any reason, you are unsatisfied with your vehicle purchase, your first step should be to review the seller's return policy. large dealership groups like CarMax and online markets like Carvana have clear and forgiving return policies and grace periods. However, most policies at dealerships are on a case-by-case basis. If you cannot find the return policy online contact your salesman or manager at the lot. Most dealerships that employ a return policy give seven days and include certain mileage restrictions. If your dealership doesn't have a return policy and is not beholden to any state law, then it will be at the dealer's discretion whether they accept your return.
Cancellation vs Repossession
If you decide that returning your car is best for your situation, there are several steps you can take to ensure that everything goes smoothly. First off, contact your lender immediately upon deciding that you want to return your vehicle and cancel your loan so they can explain the process to you and answer any questions you may have about what happens next. Depending on when you purchased your vehicle and whether it has been used since then, some lenders may allow you to return it without incurring any additional costs like fees or penalties. However, it is important to note that if you choose to voluntarily return your vehicle before paying off all remaining amounts due on the loan balance (also known as voluntary repossession), this could negatively impact your credit score so keep this in mind when making this decision.
If You Were Cheated or Misled
If you suspect that the dealer or salesman has misled you in some way, whether it be the cost of the car, the quality, or the terms of the loan, it is best to begin by contacting the dealer directly. It would likely be more productive to contact the dealer's sales manager or general manager rather than your salesman, as they often have little part in the return process. If you feel you were cheated in some way and are unable to meet a resolution with the dealership you may still have some options:
- Contact the Attorney General's office of your state.
- If you are misled by false advertising contact the Federal Trade Commission
- If you have issues with your loan terms or contract, contact the Consumer Finacial ..Protection Bureau.
- File a complaint with the Better Business Bureau (BBB)
If You have Mechanical Issues
If you buy a used car that was wrecked or had mechanical issues the dealer knew about, legally they must disclose this information to you. If you find that your recently purchased vehicle has mechanical problems the first step would be to gather any documentation related to your purchase and maintenance, including any trips to mechanics or the dealer's service department.
If the issue is serious or beyond repair you may be helped by state "lemon laws." If you successfully demonstrate under the lemon law that you were wrongly sold a defective vehicle or it was sold to you without disclosure you may receive a full refund or exchange from the dealer. Lemon laws vary from state to state so be sure to research your local laws.
Unfrontuly it is not often that a used vehicle purchase is covered by lemon laws even if the issues are serious or were hidden purposefully. The result will vary by state, however, if the vehicle isn't too old you may be able to get repairs under the manufacturer's warranty which extends to second-hand owners.
If Your Payments are Too High
Refinancing your auto loan can help you lower payments and interest rates or pay off debt sooner. Refinancing a vehicle can be difficult with bad credit and often has upfront fees associated. If available interest rates or your credit has improved over the course of your loan, lenders may revise the terms of the loan to lower your monthly auto payment. You can speak directly to your lender or see your options through services like Super Money.
Lower Your Monthly Payments
Sell it: By selling your car to someone else, you might be able to get out of being stuck with a car you don’t like. The downside of doing this is that you might not be able to recoup the full amount you paid the dealer, since a car depreciates in value as soon as it’s driven off the car lot. You’ll be on the hook for paying the difference between the dealership price and the price the buyer pays for the vehicle.
Ask for voluntary repossession: If you can’t afford the monthly payments, you could call the lender and ask for a voluntary repossession. Although this would get rid of your monthly payments, you should think twice before taking this action. A lender can still report the repossession to the credit bureaus, which will negatively impact your credit score, making it more expensive to take out a future auto loan.
Refinance your auto loan: If your payments are too high you can try to refinance your vehicle for a lower interest rate.
Get A Second Auto Loan: if your current vehicle doesn't fit your needs you can get a second auto loan in Ohio, even with bad credit.