A question from a reader:
Q. I bought a new car, but I’ve changed my mind. It’s only been a couple of days – is there anything I can do to get out of the deal?
Short answer: Probably not. But, still there are some things you can try.
Disclaimer: Contracts are for lawyers.
Before we get started with this topic, please know that I am not a lawyer. I’m a guy that worked in dealerships for a decade or so, and the process I’ve outlined below is based on things that I’ve seen people do to successfully get out of a car deal. However, none of it is legal advice.
Generally speaking, if you’re trying to get out of a deal, you want a lawyer. Weaseling out of agreements is what a lot of lawyers do for a living, and some of them are quite good at it. Even better, many lawyers will offer you a free consultation, so there’s really no reason not to call one.
If you don’t hire a lawyer, or don’t like what the lawyer has to say and you decide to take a “DIY” approach, this process is for you.
But whatever you do, understand this process is not legal advice, and may in fact be stupid advice. Use it at your own risk!
And now, let’s continue…
There Are Risks With Canceling A Car Deal
Canceling a car deal is hard. No one should expect to take a car off a dealer’s lot, drive it around for a little while, and then give it back to the dealership without consequence. Here’s what you can expect to happen when you try to cancel a deal:
- If you manage to cancel the deal, you could be asked to pay a fee for the use of the vehicle
- If you manage to cancel the deal, the dealer may try to keep your down payment and/or trade-in
- Whether you manage to cancel or not, the dealer could sue you for any of the things you say or do
- If you don’t manage to cancel the deal, you could be forced to keep a car you don’t really want
Because canceling a car deal is hard, it’s a good idea to be open to a compromise. If you start the process outlined below and the dealer offers to reduce your payments, that’s a win. If the dealer offers to let you exchange the car you bought for a different one, that’s a win too.
How To Try and Cancel A Car Deal By Yourself
If you want to cancel a car deal and you can not or will not get a lawyer’s help, you can try the steps outlined below. In my experience, each step can be effective.
First, before you do anything, review each aspect of the deal you’ve made. Generally, every car deal has four aspects:
- Both sides have to agree to terms (price, equipment, and accessories) on a specific vehicle to buy/sell
- Both sides have to agree to terms on a trade – and potentially paying off that trade – if applicable
- Unless you’re paying cash, you or the dealer has agreed to arrange financing, and your deal may be contingent upon financing
- Both sides sign a series of legal documents that record the sale with the state, the bank, and so on
A mistake or problem with any one of these aspects of the deal can potentially invalidate the entire deal. At the very least, a problem or mistake can give you leverage to try and rescind or rework a deal.
Step 1 – Review All Your Docs
First, read all your documents. There’s a section somewhere pertaining to cancellation. Be sure to read that section and understand it so you know what to expect when you ask the dealer to cancel the deal.
Second, look for paperwork errors. If the dealership has made a mistake somehow – the wrong VIN, the wrong mileage on the buyer’s order, a forgotten signature or initial somewhere – that can become leverage:
- If the dealership forgot to have you sign something, the dealership may need you to sign new paperwork. You can refuse until they change your deal.
- If the dealership’s paperwork has the wrong VIN, the wrong color, the wrong mileage, the wrong name, it probably needs to be corrected. You can refuse to sign corrected documents and until they change your deal.
- If the dealership underestimated your vehicle payoff, they may try to collect more money from you. You can refuse to pay and demand a change to your deal.
And so on. Doing any of these things could make you liable for a lawsuit (I have not idea), but in my experience I can’t say I’ve ever heard of a dealer suing a customer for demanding a better deal in exchange for signing new paperwork.
The fact is, paperwork errors are quite common in the car business. If you look hard enough, you can probably find an error somewhere.
Step 2 – Figure Out Who Your State Regulators Are
Every state has some entity that regulates car dealerships. In some states, there’s a licensing board for dealers. In others, there’s a consumer affairs or consumer protection office. Every state has an attorney general too.
The key here is to figure out what entity you would complain to in your state about the dealership. Make sure you know the correct name of the entity, and how to file a complaint with this entity. You don’t actually want to complain at this point, you just want to know the details so you can start pulling together documentation.
Step 3 – Return the Car To The Dealer’s Lot
Bringing the car back to the dealership is important. While parking the car on the dealer’s lot isn’t actually enough to cancel deal, it is enough to get the dealer’s attention.
To return the car:
- You can park the car in the dealer’s parking lot and then drop the keys off at the front desk or with whichever sales manager is around.
- If the dealership manager refuses to take your car keys, place the keys in an envelope and drop them in the “night drop” box after hours. Be sure to include a note/letter that you are returning the car, and that you believe the keys are the dealer’s property.
- Send an email to the sales manager at the dealership explaining that you have returned the car, where you parked it, and where the keys can be found. Be sure to send this same email to the salesperson you worked with, the finance manager, and anyone else at the dealership you have an email address for.
- Be sure to explain that you do not believe the deal is valid, and that you are therefore returning the dealer’s property to them.
To be clear: This is not enough to cancel a deal, and it does come with some risk. The dealership could decide your vehicle has been abandoned, and have it towed away and impounded at your expense. It’s up to you to determine how serious this (or other similar threats) may be. I do not know of any dealer doing this, but I have heard stories…so proceed at your own risk.
Still, if you genuinely believe that your car deal is invalid, returning the car to the dealership makes sense.
Step 4 – Ask To Talk to The Dealership’s General Manager
In all but the largest dealerships, the general manager (GM) is the only person empowered to cancel a car deal. Everyone else – salespeople, finance managers, sales managers, and even general sales managers – can’t cancel a deal without the GM’s approval. So, don’t bother talking to anyone else.
When the dealership realizes you’ve brought the car back, someone is going to call you. Unless that person is the GM, explain that you need to talk to the GM and that no one else will do.
When you get the GM on the phone, be sure to follow these rules:
- Be polite. The GM is one of the only people in the world who can snap their fingers and solve your problem…so be nice, stay calm, and explain your situation as best you can.
- Ask for the dealership to cancel the deal. Explain that you believe the deal may not be valid, and that even if it is valid, you no longer desire the car.
- If you’re open to buying a different car on the dealer’s lot instead, say as much. An ‘exchange’ is easier for a dealership than a ‘return.’
- If your life or financial situation has changed substantially – you or your spouse has lost a job, been diagnosed with a serious illness, etc – say so. These facts can sway most GMs, in my experience.
- Do not make threats. Threats do not change facts, and they aren’t usually taken seriously.
At this point, the dealership’s general manager just might surprise you. Dealerships are a lot more concerned about customer satisfaction than they used to be, and many dealers are sympathetic to consumers who have a good reason for wanting out of a deal.
However, if the general manager does not offer a satisfactory compromise, there’s a couple of things you can try.
- Say that you believe you’ve found a serious error in the paperwork, but that you’re not ready to elaborate until you speak with your attorney. Be as vague as possible here – do not say what the paperwork error is, and be sure to say that you “believe” you’ve found an error.
- Explain that you’re making notes of every interaction with the dealership and that you’re “building a file.” Explain that you’ve reviewed the complaint procedures with the state regulator, but that you have not filed a complaint in the hope that you can work things out.
- At the end of the conversation, thank the GM for their time and verify that they have your contact info.
If the conversation has gone well and you’ve found a way to cancel your deal – or if the GM has offered some compromise you can live with – congratulations.
If the conversation has gone poorly, don’t give up. You’ve planted the notion that there’s an error in the dealer’s paperwork, and the dealership is going to spend several hours looking for that error. Even if you didn’t find an error, the dealership may realize they made a mistake and change their position accordingly.
Step 5 – Escalate To The Dealership Owner(s)
Most car dealerships are owned by some corporation somewhere. Your job is to figure out the name of the company that owns the dealership, and then email someone important at that company and make a complaint.
- Once you figure out the corporation that owns the dealership, search for that company on LinkedIn. You can find the President, COO, VPs, etc. Send an email outlining your problem to every senior level person you find.
- If you can’t figure out the email address, try calling the corporate office and asking to speak with each of these people, or asking if you can send one of these people an email instead of leaving a voicemail.
If the dealer is part of a national chain, a complaint email sent to a few corporate officers will get attention. If the dealership is owned by an individual and you can get word to them about your problem, they may ask the GM to follow-up and make it go away. If the dealership’s GM is also the owner, bummer. But at least now you know.
When someone from the owner’s office contacts you – or when the GM reaches out – stick to the same story:
- You believe you have found a serious error, and you do not believe the deal is valid.
- Even if the error is not serious, you do not want the car.
- Ask for the dealer to cancel the deal.
If the dealer offers a compromise you can accept, strongly consider taking the offer.
Step 6 – Escalate to the Manufacturer (New Car Dealers Only)
If you’re not getting the level of attention you deserve, you may want to get the manufacturer involved. Most of the time, this won’t have a huge effect…most manufacturers don’t really care about complaints about dealers. In many cases, they just refer the complaint right back to the dealership.
However, complaining to the manufacturer shows that you’re not going away. The dealership may have someone contact you within a day or two of your complaint. When someone from the dealership contacts you, stick to your story: There’s an error in the paperwork, you do not believe the car deal is valid, and you don’t want the car anyways.
Step 7 – Escalate To State Regulators
If you’ve done all of the above and you’re not getting anywhere, it’s time to file a complaint with the state regulator. Contact your state’s dealer licensing board, state consumer affairs bureau, or state Attorney General’s office. The complaint doesn’t have to be relevant to your desire to return the car – it just has to be a valid complaint:
- Did the salesperson misrepresent the car somehow?
- Did the salesperson or finance manager fill out your credit application for you?
- Did the finance manager ask you to sign any blank documents?
- Is there a paperwork error?
- Did the dealer forget to document something that they promised?
- Did anyone at the dealership pressure you?
If you think about the transaction, you can probably find a few things to complain about. List all the items in your complaint. Document as much as possible, as clinically as possible. Be sure to mention that you have spoken with the GM at the dealership, and include them by name in your complaint. You’re probably going to want to put all of the complaints into a letter or email, and you’re welcome to send a carbon copy to everyone at the dealership and at the owner’s offices too.
Step 8 – Follow-Up With The General Manager One Last Time
Before you go to the media in an attempt to apply maximum pressure, it’s a good idea to try the dealership’s general manager one last time. Explain that you do not believe your deal is valid. Explain that you do not want the car. Explain that you’ve filed a complaint with the dealership owner(s), the manufacturer, and/or the state regulators. Explain that you will take your story to the media, and that in light of all the complaints you’ve made, you believe the media will take your problem seriously.
Most GMs will offer you some sort of compromise at this point. If you can accept the compromise, strongly consider doing so, as there is no guarantee the media will be interested in your story.
Step 9 – Contact The Local Media
The easiest way to get local media to cover your story is to go to your local TV stations – preferably the designated investigative reporter at each station. Send them an email or place a phone call and keep it simple:
My name is [insert name], and I’ve had a major problem with [dealership]. I have complained to the dealership’s General Manager, I have complained to the owner of the dealership, I have complained to the manufacturer, and I have filed a complaint with the [state regulator].
I am happy to tell my story on camera. My phone number is [number] and I am available to talk any time. I can also put you in contact with the dealership’s general manager so you can verify my story.
This email is short and doesn’t go into much detail, because you want them to respond. Don’t dump your whole story into a massive email, as they won’t read it.
Once you get the reporter (or their producer) on the phone, explain that you had a bad experience with the dealership, that you’ve filed a complaint with everyone you can think of, and that the dealership doesn’t care. If the reporter thinks they have a good story, they will take the GM’s contact info and follow-up.
Also, if you’re emailing the reporter, there’s no reason not to cc everyone at the dealership you have an email address for, everyone at the corporate office, etc. and so on. There’s no reason not to, assuming your complaint is factual and you’re not saying anything untrue.
Step 10 – Complain To The Feds
A complaint to the federal government (either the FTC or the CFPB) often takes weeks or months to process. Odds are good that everyone will have moved on by the time the federal government gets around to responding to your complaint.
Still, if you are down to your last shot, you can contact the Federal Trade Commission (FTC) or Consumer Financial Protection Bureau (CFPB). Both entities have online complaint forms, so it’s pretty easy to fire off a complaint and see what happens. And, just like before, feel free to send a few emails about the fact that you’ve filed a complaint with federal government. The local news might be interested, not to mention the people that own the dealership, the dealership staff, etc.
Know When To Compromise, and Don’t Do Anything Stupid
People get emotional when they’re fighting to get out of a car deal. It’s easy to say or do something stupid. Here are some suggestions based on things I’ve seen or that have happened to me personally:
- Don’t threaten to harm anyone. This happened a few times in my career, and we called the cops most of those times.
- Don’t break windows at the dealership. This happened a couple of times in my career, and we called the cops.
- Don’t call people names or insult them. It’s hard to get what you want when people hate you.
- Don’t threaten to sue. If it’s a corporate dealership, the lawsuit threat means the GM can wash his or her hands of your situation and let the corporate attorney handle the whole thing. That’s not what you want.
- Don’t damage or vandalize the car. You might have to keep it, after all.
- Don’t refuse to make payments. It’s only your credit rating that will suffer if you refuse to make payments – the dealer gets paid by the bank as soon as the paperwork is accepted.
Last but not least, don’t let your pride get in the way of making a compromise. The process outlined above is mostly about making a big stink, and hoping that the dealership determines you’re more trouble than you’re worth. Make a stink in the kindest, nicest way possible, and someone at the dealership might be convinced to see things your way.