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Consumers Should Know Rights When Buying Used Cars

Q: Does the lemon law apply to used car sales?
 It can, but does not usually apply. Ohio’s lemon law covers certain defects in cars, but the owner must report defects to the manufacturer within the first year of ownership or the first 18,000 miles, whichever occurs first. However, there are other laws that protect consumers who buy used cars.

Q: Are car dealers prohibited from treating a consumer unfairly?
 In Ohio, car dealers are not allowed to use unfair, deceptive or unconscionable practices in connection with the sale of an automobile. There are many specific rules. For example, car dealers cannot make misrepresentations about the car or the sale. The contract must list the price and mileage of the car, and must contain all the relevant statements made by the dealer about the sale. If the dealer knows the car has a salvage title or was previously used as a rental, then the dealer must disclose that to the consumer. A consumer loan contract must clearly disclose the cost of the credit (the “finance charge”), the interest rate and the dates and amounts of all payments due.

Q: What specific things should I watch out for to protect my rights when buying a used car from a dealer?
 Make sure you understand everything. Ask questions. If you are not satisfied with the answers, shop somewhere else. Don’t sign any document that you do not completely understand, you do not agree with, or is not completely filled out. Make sure you receive copies of what you signed. Do not buy a used car “as is” unless you are prepared to personally pay for anything that goes wrong with the car. A dealer will not pay for repairs to a car sold “as is,” even if the malfunction occurs the same day you buy the car. Ask the dealer if you can take the car to a mechanic of your choice to be checked out before you buy it. Try to find out what the repair history was during the car’s first 12 months - 18,000 miles so you know what you are getting into. Consider getting your own loan ahead of time.

Q: Do I have three days to cancel a contract for a car sale?
 Generally, no. If a right to cancel is part of the contract, you would, but that is very uncommon.

Q: When I bought a car recently, the dealer said my loan had been approved, so I drove the car off the lot. Then the dealer called me after the sale and told me to come back and re-sign some documents because the loan was not approved after all.  What should I do?
This happens in a “spot delivery” agreement (when you take possession of the car right away). The dealer who gives you the car before the loan is approved must also give you an agreement stating what happens if the loan is not approved. In a spot delivery, the dealer should not tell you the loan is approved unless it actually has been approved.  Most spot delivery agreements allow you to return the car and get back your trade-in and down payment. If a dealer tells you that you “must” sign new papers, look closely at the spot delivery agreement and consider consulting an attorney first.

Q: Do I have to continue to pay my loan company after I discover the unfair and deceptive acts of the car dealer?
 When a car dealer arranges a loan for a consumer with a bank or finance company, the finance company can be held responsible for the wrongful acts of the dealer, to an extent. In some cases, you may be able to cancel the entire contract, including the loan.


Law You Can Use is a weekly consumer legal information column provided by the Ohio State Bar Association. This article was prepared by Gregory S. Reichenbach, a west-central Ohio attorney.  ​​

Articles appearing in this column are intended to provide broad, general information about the law. Before applying this information to a specific legal problem, readers are urged to seek advice from an attorney.

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