How to Return a Car in Texas (New or Used): Your Comprehensive Guide

by Christina WhitakerUpdated October 03, 2023
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Investing in a motor vehicle is a significant financial commitment. Texas has protective measures like the Lemon Law for vehicle owners. This guide outlines the process to return a vehicle in Texas.

Before Purchase:

  • Research: Study vehicle sales, dealer warranties, insurance companies, and credit unions for financing options.
  • Vehicle Identification: Verify the Vehicle Identification Number (VIN) and vehicle title.

New Vehicle Returns:

  • Immediate Contact: Contact the dealership manager and finance manager if issues arise.
  • Document Everything: Keep records of all communications, service for repairs, and loaner vehicle arrangements.

Here is the process:

  1. Contact the Dealer: Inquire about their return policies and whether they affect your credit score. You might be eligible for a full or pro-rated refund based on the sales contract, or a trade-in option for a different car. They could have a 30-day test period still in place.
  2. Review the Lemon Laws: Texas Lemon Law applies if you've attempted to repair a defect twice within the first year or 12,000 miles and twice more within the second year/12,000 miles without success (known as the Four-Times Test).
  3. Look for Contract Loopholes: Review your purchase contract for any legal restrictions or conditions that could nullify the agreement.

Used Vehicle Returns:

  • Warranties: Check for limited or extended warranty coverage.
  • Lemon Law Claim: If the vehicle is flawed, file a Lemon Law complaint. Understand the Four-Times Test.

The process is as following:

  1. Check Warranty Coverage: Ensure your car is still covered under the original warranty or an extended warranty.
  2. Notify the Manufacturer: Send a written notice to the manufacturer detailing the issues. Allow them an opportunity for service or repairs.
  3. File a Lemon Law Complaint: If the manufacturer fails to rectify the issue, file a Lemon Law complaint with the Texas Department of Motor Vehicles (TDMV), paying the required fee.
  4. Arbitration and Hearing: Wait for the TDMV’s arbitration process. If unsatisfied with the outcome, a hearing will be scheduled where both you and the manufacturer present your cases.
  5. Appeal: If the hearing examiner's decision is unfavorable, you have the option to file an appeal in Travis County, Texas.

Financial Considerations:

Credit Score:‌ Be aware of how a vehicle return might impact your credit score.

Motor Vehicle Sales Tax:‌ Understand the tax implications of vehicle returns.

Purchase Price vs Sales Price:‌ Know the financial implications. Get an estimate for defective vehicles and the original vehicle.

Replacement Vehicle:‌ Check if there is an exchange program for the car before trying to sell it. It depends of the days of purchase. Franchised dealer is often more flexible. You can also get credit for sales.

Cost of Credit:‌ Understanding the cost of credit, especially if you've used Credit Cards for down payments or other expenses related to the vehicle purchase, is essential. Be aware of any Credit Card Convenience Fee or charges by Credit Card Processing Services.

Private Party Sales:‌ If you plan to resell the vehicle, having clear knowledge and documentation regarding the vehicle's history, including odometer reading and any repair attempts, is crucial. This will ensure a smooth transaction and fair price.

Insurance and Registration:

Liability Insurance:‌ Maintain active insurance coverage. Also prepare vehicle history report if needed.

Vehicle Registration Expiration:‌ Stay updated with the Department of Motor Vehicles.

Legal Framework:

Magnuson-Moss Warranty Act:‌ Understand federal warranty protections.

Consumer Law Center:‌ Seek advice on your legal rights and obligations.

Service Contracts‌: Know the terms of any service contracts.

Texas-Specific Guidelines:

County Tax Assessor-Collector:‌ Ensure your vehicle is properly assessed for taxes.

Vehicle Inspection Report:‌ Maintain updated inspection reports for safety inspection requirements on public highways.

Electric Vehicles (EVs):

Electric Vehicle Purchases: Understanding the warranty time frames and limited warranty coverage is vital for electric vehicle purchases. Some electric vehicles might come with a dealer warranty, while others might have no dealer warranty. In case of flawed vehicles, knowing your rights under the warranty and possibly filing a Lemon Law Complaint could be a way to address the issues.

Military Personnel:

Active Duty & Duty Military: Understand the Service members Civil Relief Act.

Inspections and Registrations:

  • Vehicle Inspection Report: Upon purchasing a vehicle, obtaining a Vehicle Inspection Report is essential as it details the condition of the vehicle, ensuring it meets the required safety and emissions standards set by Texas.
  • Motor Vehicle Registration: Keeping track of the Vehicle Registration Expiration date is critical to avoid any legal complications. You would receive a Registration Renewal Notice, which serves as a reminder to renew your registration before it expires.
  • Liability Insurance: Every vehicle owner must have Current Liability Insurance. Proof of insurance indicating valid coverage is crucial and is often required during the registration or renewal process. Keep your Liability Insurance Card handy for easy proof of insurance when needed.


Harris County Procedures:‌ In places like Harris County, the Tax Assessor-Collector's Office handles vehicle registration renewals, ensuring all vehicles on the road are registered and up to standard. Also check with Texas Department of Public Safety (DPS).

Consumer Law Center:‌ Have a reliable Consumer Law Center or legal aid ready for consultation. They can provide valuable advice, especially when dealing with service contracts, lemon law complaints, or any other legal matters related to your vehicle. Also, check the working calendar days.

Final Tips:

Informal Settlement:‌ Before filing a complaint, consider seeking an informal settlement.

Legal Assistance:‌ If the process becomes complex, consider hiring an attorney or contacting consumer protection agencies for guidance.

By adhering to this guide, you can navigate the complexities of returning a vehicle in Texas, ensuring a smoother process for new or used cars, or electric vehicles. Best of luck for a successful return!

Some helpful comments from the video:

  • @Mini-Hakkero: I think the repair requirements have changed, not sure when but this is what the TX DMV says: The Four Times Test. You pass this test if you have taken your vehicle to the dealership for repair. Four (4) times for the same defect(s) within the first two years or 24,000 miles, whichever comes first; and the problem continues to exist.

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