Photo: Pat Hawks via Flickr
Every single day we walk up to retail-shop registers to purchase a myriad of products ranging from clothes to shoes to gym bags. And even if we’re not 100 percent sure that we really want, need or will even use these items, there’s that little voice inside of our heads, assuring us that, “It’s OK. If I change my mind later, I can just come back and return it.”
But the car-buying process is different.
Automobile purchases hold tightly to the once-you-sign-the-deal-its-yours purchase policy. No substitutions, exchanges or refunds.
“It’s rare for a car dealership to take back a vehicle,” says Carroll Lachnit, features editor at Edmunds.com. “Dealers might work with buyers under some circumstances, but I think that a buyer’s financial hardship would not likely be a reason to accept a return.”
Why won’t car dealerships accept retuned vehicles? Because there are no laws that require them to, and to do so would cause a logistical nightmare. “Dealers cannot easily return a car,” says Damien Bullard, co-founder and president of IDDS Group, an automotive-industry consulting firm. “There are DMV license plate and registration issues, complications from new cars becoming used cars, and high costs absorbed by simply delivering the vehicle. This means that there are very few circumstances where a dealer will allow a buyer to return a car, and it would need to be under a very tight time limit at best.”
You may recall that during the most recent recession, Hyundai offered a special promotion that allowed car buyers to return their cars in the event of a job loss. That, however, was a unique circumstance and “is in no way a common practice,” says Yuri Frid, director of operations at Bay Ridge Ford in Brooklyn, N.Y. “The only situation [where a dealership would accept a return] is if the wrong car was delivered to the buyer or the dealer misrepresented itself in the purchase of a car.”
So what do you do if you absolutely, positively cannot afford to make your car payments? Selling the car, either back to the dealership or to a third-party, might be your best option. However, you’re likely to take a financial hit in both situations. “Depreciation on a car is 20 percent or so as soon as you drive off the lot,” says Edmund’s Lachnit.
Just to prevent any complications down the road, you might think that discussing the possibility of a forthcoming job loss with the dealership before you purchase a car might be a good idea. But the truth is that broaching the subject can actually hurt you much more than it can help you. Car dealers “are not likely to give shoppers a preemptive ‘out’ from a legally binding car purchase contract,” says Lachnit. “You would be sending up a huge red flag by saying, in essence, you might not be able to pay for this car.”
The bottom line is that there really is no way out of a car purchase that does not involve taking a pretty hefty financial loss. And although it’s not a foolproof system, the best thing to do before buying a car is to take an honest look at the health of your job and the health of your company. If you hear rumors of buyouts, layoffs, or mergers, you may want to hold off on that car purchase.
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