Your Rights at the Dealership: Negotiating Prices, Lemon Laws, and More

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How many times have you driven home from the dealership and felt like you could’ve gotten more for less? Whether you’re a first-time car buyer or a car owner considering a trade-in, going to the dealership can be an overwhelming experience. Knowing your rights can help you drive off the lot with the best deal.

You have the right to break down the price into components.

Some dealerships take advantage of buyers that have little to no experience in how to trade in a car. Combining the costs of the new vehicle, financing, and trade-in is one of the ways a dealer may charge a buyer more than what they should be paying.

Bear in mind that you can demand the car purchase, financing, and trade-in to be separate negotiations. This will allow you to evaluate the specifics of the vehicle price, the value of your trade-in, and your loan details separately. If the dealer refuses this setup, remember that you have the option to get third-party financing or sell your old vehicle elsewhere.

Bear in mind that you can demand the car purchase, financing, and trade-in to be separate negotiations.

You can choose not to discuss monthly payments.

You may withhold information about your preferred monthly payment if you’re planning to get financing from your dealer. In exchange for saving a few extra dollars a month, you could end up paying thousands more over a longer loan period.

Don’t discuss payment options until you’ve negotiated the car price. Instead of discussing monthly payments, you should focus on your preferred Annual Percentage Rate (APR) and the duration of loan repayment. This will help you avoid paying more interest over the life of your loan.

You can walk away any time.

You’re not obligated to buy a vehicle on the same day as your test drive. Be firm and don’t allow the salesperson to rush you into signing anything before you’ve considered all options. If you don’t feel good about the terms, it’s completely fine to walk away.

Take your time reading the fine print on the offer sheet, and don’t be afraid to cross out items or any add-ons you don’t agree to. It’s better to wait for the corrected paperwork than to go through the trouble of unwinding a deal that you’ve already signed.

You can say “no” to an extended car warranty.

An auto service contract, more popularly known as an “extended warranty”, is a service contract sold by dealers and auto manufacturers to car buyers as a guarantee to cover payment for specific repairs and services. Ironically, extended warranties do not qualify as a warranty under federal law.

A study by Consumer Reports discovered that approximately 55% of car owners were not able to make use of their auto service contract. Those that do get to use it end up paying more in payments than the cost of service and repairs they have claimed.

Don’t drive the car home or agree to have the vehicle delivered to your house before the financial paperwork is completed.

You may refuse “spot” deliveries.

Don’t drive the car home or agree to have the vehicle delivered to your house before the financial paperwork is completed. If your financing falls through for any reason, the dealer will have an opportunity to force you into signing a new contract with less than favorable terms. This is what’s often referred to as “yo-yo financing,” which is one way a dealer can trick you into shelling out more for a down payment or to pay larger monthly payments.

To prevent this from happening, it’s good to have third-party financing arranged beforehand. This will give you better leverage when it comes to negotiating rates on an in-house loan. If you choose to get financing from your dealer, it’s better to wait for all the approvals to be completed before taking possession of the vehicle.

Educate yourself about the Magnuson-Moss Warranty Act.

The Magnuson-Moss Warranty Act enacted in 1975 is a federal lemon law that protects consumers of goods in every state. It requires manufacturers and sellers to provide complete warranty information and coverage to prospective buyers before they even make a purchase. This act applies exclusively to products with written warranties.

It encourages dealerships to offer competitive warranty coverage, giving car buyers the option to compare shops for the best deal. Aside from this law, each state has its own provisions and remedies for consumers who have purchased vehicles that have been proven defective while under warranty.

Know your state’s lemon laws.

Aside from the Magnuson-Moss Warranty Act, all 50 states have some form of car lemon law. In general, these laws give vehicle buyers the right to a refund or replacement if the vehicle they have purchased is proven to have quality defects and safety issues after multiple repair attempts. The claim must be made within a certain period after purchase and while the warranty is still in effect.

You may check your state’s lemon law here.

Having work done by an independent mechanic or a shop other than your dealership’s repair facility will not void your warranty.

Getting your vehicle serviced outside the dealership won’t void your warranty.

You have the freedom to choose where you want to have your vehicle serviced or repaired. The only exception is when the dealer offers the service free of charge; in this case, they may ask you to have it done in their repair facility. However, having work done by an independent mechanic or a shop other than your dealership’s repair facility will not void your warranty.

The only way that your dealer can deny responsibility is if the damage is proven to be a direct result of replacement. It is also the manufacturer’s or dealer’s job to prove that the fault was not caused by a product defect.

You have the right to use aftermarket parts for replacements.

Unlike what most people may think, using aftermarket or OE replacement parts for your repairs does not void your warranty. The Magnuson-Moss Warranty Act makes it illegal for dealers to void your warranty or deny a claim simply because you used an aftermarket part. The manufacturer or dealer can only require you to use their preferred parts if they are provided free of charge.

Is buyer’s remorse a valid reason to return a vehicle?

The short answer is “no.” Many dealership offices clearly state that there is no cooling-off period applicable to new car purchases. Once you have signed the sales contract, canceling the transaction is at the discretion of the dealer. In this case, the law will typically side with the seller.

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Staff Writers

In the Garage with CarParts.com is an online blog dedicated to bringing DIYers and devoted car enthusiasts up to date with topical automotive news and lifestyle content. Our writers live and breathe automotive, taking the guess work out of car repairs with how-to content that helps owners get back on the road and keep driving.

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