| Buying a Used Car |
by: Southeast Louisiana Legal Services
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| Q. | Why should I worry about my rights? |
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| A. | Knowing your rights increases your chance of getting a fair deal. You'll also be in a better legal position if the car has problems. The main thing to watch out for is whether the car has mechanical problems. For example, was the car in a wreck before? Was it ever flooded? Does it have any major defect? Is the odometer correct? |
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| Q. | What does a used car dealer have to tell me about the car's condition? |
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| A. | All used car dealers must tell buyers if a used car is sold with or without a warranty. This must be on the "Buyer's Guide" sticker on a used car's side window. When you buy a used car, keep the original sticker or get a copy. This is considered part of the sales contract. |
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| Q. | There's no warranty on the car. What are my rights if the car is defective? |
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| A. | Even if there's no warranty, the car must be free of hidden defects and be reasonably fit for its intended use. This is known as an "implied" warranty. The law gives you this protection. But, you can give up ("waive") this right. |
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| Q. | "As Is - No Warranty Disclaimer" - What's That? |
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| A. | This means that the car has no express warranty and that the dealer is not responsible for any repairs. But, the law does not allow the seller to deny you an "implied" warranty just because you signed an "As Is - No Warranty" agreement.
To give up ("waive") your implied warranty, the waiver must be:
- Written clearly and not be confusing - the average buyer should understand what it means;
- Stated in the sales contract; and
- Brought to your attention or explained to you (your signature of acceptance in the waiver may be enough).
The dealer may also bring defects in the car to your attention at the time of the sale. If he does this, and you still accept the car, a court may find that you knew of the risk and that it was part of the deal. |
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| Q. | What are my rights in financing a used car? |
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| A. |
- Always tell the truth. It is against federal law to lie on your credit application. Also, if you lie and later file for bankruptcy, the court may not let you discharge thedebt.
- Read all papers before you sign them. Your signature usually means that you have read and understood what is in the papers.
- Get copies of all the documents after you sign them. If you offer a trade-in, be sure the value of your trade-in in on the papers.
- You don't have to buy credit, life or disability insurance. But, a lender can make you get property insurance on the car. If your insurance ends, the lender may have a right to buy insurance for you and then bill you for it.
- Your interest rate depends on your credit rating and the state laws that apply.
- Ask the dealer questions. Buying a car may be one of the most expensive purchases you make, so don't rush into it.
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| Q. | What if my car starts having problems? |
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| A. | Is the problem something more than normal "wear and tear" from normal use? If you think it's something worse, have it inspected by a mechanic. Get an estimate for the repair. See if the mechanic will testify for you if you have to go to court. Then, take the car to the dealer and give them a chance to repair it. If you have to go to court, you'll have to prove that you gave the seller a chance to fix it.
If the seller refuses to fix it, you can sue to get your money back or to get a price adjustment on the car. The remedy will depend on the kind of defect and how much you have used the car. If the seller knew of the defect(s), you may be entitled to attorney's fees and money damages also. |
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| Q. | What if the dealer offers a service contract? |
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| A. | You do not have to buy the service contract as part of your financing. If you decide to get one, read the contract carefully to see who is responsible for service under the contract and what is actually covered. Most service contracts don't cover pre-existing problems. If in doubt about buying a service contract, talk with a lawyer first. If you have problems, call the Department of Insurance 1-800-259-5300 or file a complaint. |
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| Q. | After the car was delivered, I was told that financing was denied, or that the terms were changed. What are my rights? |
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| A. | Laws cover this (it's called "spot delivery"). If you take delivery of the car and the sale depends on dealer financing, then the dealer must state your rights in the contract:
- If the financing is not resolved within 7 days of delivery, the contract is canceled;
- Any trade-in will not be sold until the financing is complete;
- You can't be charged for mileage if the financing falls through;
- The dealer must refund any deposits or down payments if the financing is not completed; and
- You must return the car within 48 hours of notice that the financing failed.
If the financing falls through, dealers usually offer a new car or new financing terms. You do not have to take the deal. You have a right to get your money and your old car (trade-in) back. |
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