How to Cancel a Car Contract

by Michael Ryan
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Canceling a car purchase contract is necessary in some circumstances. For example, if a dealership promises to deliver a certain vehicle to you by a certain date, it may be necessary to cancel the contract if the dealership fails to deliver. In other cases, a contract may need to be canceled because financing cannot be secured or because there are physical or mechanical defects with the vehicle. The car contract, also called a buyer's order, is the document that describes the vehicle you are purchasing as well as the financial details of the transaction. The document must be signed by the buyer as well as by the car dealer or an authorized representative of the dealer.

Step 1

Read the terms and conditions. The terms of the car purchase contract are usually listed on the reverse side of the buyer's order, but they may be included as an addendum. Note that auto purchases do not include a limited right to rescind of any sort; once the transaction is complete, it is considered final.

Step 2

Contact the dealership. As there is no implied ability to cancel to contract, you must contact the dealership and explain your situation. Regardless of why you want to cancel the car contract, it is at the dealership's discretion unless the contract cannot be completed because of negligence on the part of the dealership.

Step 3

Contact manufacturer customer service. If you are purchasing a new vehicle, the customer service hot lines offered by auto manufacturers are helpful. For example, if you special-order a vehicle and it arrives damaged, you may not want the vehicle even if the dealership offers to fix it. As you may have signed a buyer's order before completing the special order, the dealership may consider you obligated to take the vehicle. However, by contacting the customer service line, you may be able to have the corporate office put pressure on the dealership to stop the transaction.

Step 4

Pay any monies due. If and when the dealership agrees to take back the vehicle, you may need to pay for each mile you put on it. This varies from dealership to dealership, but be expected to make some payment for your use of the vehicle.

Step 5

Receive any refunded monies. If you placed a down payment on the vehicle and return it, you are entitled to receive a refund of your down payment. Depending on the arrangements made with the dealership, you may receive this amount by cash or check, depending on how you originally paid the down payment.

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