It can be stressful to consider the option of returning a car to the financing company after signing a contract. In some instances, a buyer may no longer need the car, or may be considering options to save money. It is important to read and understand the contract, as different companies and contracts have different rules. It is a complex legal issue as the contract states if a buyer can return a car and can even state when they may return the car.
According to legal experts, it is important to read through the contract carefully before deciding whether or not to return the car. Many contracts provide protection if something goes wrong with the vehicle, such as a mechanical issue or accident. Other contracts, however, may offer a money-back guarantee that may be beneficial if the buyer is looking to save money. Additionally, some contracts may also provide for a longer period of return, such as one year or more, allowing for more buyer control over the vehicle.
It is also important to contact the finance company prior to returning a car. In some cases, the company may be willing to negotiate a lower payment for the car or may even be willing to forgive the payment altogether. Alternatively, some companies may be open to allowing the buyer to transfer the car to another person, thus eliminating the need to return the car. This is an important step as the buyer may be able to avoid losses and remain out of default on the vehicle.
Additionally, some buyers may also consider trade-in and/or refinance options when returning a car. Refinancing a car may be beneficial if the buyer still wants to have ownership of the car, but may be able to find a better interest rate or payment plan with a different company. Trade-in options may be beneficial as the buyer may be able to find a similar vehicle from a new dealer at a lower cost.
It is important to note that returning a car will likely affect the buyer’s credit score if the car is a leased or financed vehicle. Defaulting on a car loan will undoubtedly damage the credit score and make it more difficult to purchase a vehicle in the future. It is important to speak to a financial advisor prior to returning the car to ensure that the buyer is making the right decision.
Legal Requirements
The specific legal requirements, if any, regarding returning a car to the finance company vary state by state. It is important to research the local laws and understand the consequences of returning a car, as some states may restrict a buyer’s ability to do so or require the buyer to pay a fee or penalty. Different states also have different contracts and warranties, so it is important to read through the details and understand the risks before making a decision.
Returning the Vehicle
When returning a car, it is important to contact the finance company and inform them of the decision. It is also important to track all of the return-related expenses, such as shipping and/or storage fees, as these may be covered by the seller or the finance company depending on the specifics of the contract. Additionally, some contracts may require that the buyer is responsible for all of the remaining payments and fees, so it is important to make sure that all payments have been made before returning the car.
Insurance
When returning a car, it is important to ensure that it is covered by insurance. Many states require that a car be covered by insurance while it is being paid off, so even if the buyer is returning the car, insurance should remain in place to avoid potential penalties or fees. In some instances, an insurance company may be willing to extend coverage on the car for a brief period of time in order for the return process to take place without interruption.
Repair Costs
When returning a car, the buyer should consider repair costs. Generally, a finance company will not accept a damaged vehicle and may request the repair of any defects or damages before allowing the car to be returned. It is important to read through the contract carefully to determine who is responsible for any repair costs before returning a car.
Determining Value
When returning a car, it is important to understand the value of the vehicle. If the car has been damaged, the value may be lower, but if it is in decent condition, the finance company may accept its original value. Additionally, it is important to check the Kelley Blue Book value to ensure that the buyer is receiving the properly amount of money if the buy is refinancing or trading in the car.
Disputing a Default
In some cases, the finance company may claim that the customer is in default of the loan. If this is the case, the buyer should speak to a legal advisor and dispute the default. The buyer may be able to provide evidence that the loan is still in good standing, or may even be able to negotiate with the finance company in order to receive part of the original loan amount.
Re-Entering the Market
Finally, if a buyer is considering returning a car, it is important to plan ahead for re-entering the car market when the time comes. The buyer’s credit score may suffer from returning a car, so it is important to understand how long it may take to repair the credit and what steps can be taken in order to build credit. Additionally, the buyer should find a reputable car dealer that is willing to work with them and understand their situation.
