I just bought a used car and decided I don't want it. Do I have a legal right to return it? Isn't there a 3-day right to cancel the purchase?

Many people believe they have a 3-day right to cancel the purchase of a motor vehicle, but that is not the norm. The library has not located a state law that explicitly grants a 3-day right to cancel any used vehicle purchase. The Texas Attorney General website addresses a very specific 3-day “right of rescission” for door-to-door sales, and they state the following:

Certain types of sales will not be covered by these laws, including auto sales.

One exception is for motor vehicle retail installment sales. A retail installment contract is a “transaction between you and the dealer to purchase a vehicle where you agree to pay the dealer over time, paying both the value of the vehicle plus interest,” according to the Consumer Financial Protection Bureau. That is, a retail installment contract does not apply to transactions that involve a loan. Section 348.111 of the Finance Code states that a buyer may rescind the contract under certain conditions, quoted below:

Sec. 348.110. DELIVERY OF COPY OF CONTRACT. A retail seller shall:
(1) deliver to the retail buyer a copy of the retail installment contract as accepted by the retail seller; or
(2) mail to the retail buyer at the address shown on the retail installment contract a copy of the retail installment contract as accepted by the retail seller.

Sec. 348.111. BUYER'S RIGHT TO RESCIND CONTRACT. Until the retail seller complies with Section 348.110, a retail buyer who has not received delivery of the motor vehicle is entitled to:
(1) rescind the contract;
(2) receive a refund of all payments made under or in contemplation of the contract; and
(3) receive the return of all goods traded in to the retail seller under or in contemplation of the contract or, if those goods cannot be returned, to receive the value of those goods.

You may also want to review the terms of the contract or agreement that you signed as it may contain cancellation provisions, a return policy, or a “cooling-off period.” Generally speaking, once you sign a contract, you are bound by the terms it contains. There may be exceptions (e.g., a contract was signed under duress, there was deception or fraudulent activity), but only an attorney can provide a legal opinion and inform you of your options.

It may also be possible to negotiate with the seller and come to a mutual agreement.

I bought a used car, but it does not run well. I think the seller lied to me. What can I do?

The Texas Deceptive Trade Practices Act (DTPA) is Texas's leading consumer protection legislation. It protects consumers by making it unlawful to misrepresent a product that is sold in the state. Richard Alderman, a Texas attorney who helped draft the DTPA, discusses one's options when a seller has lied about major defects and he also discusses one's options when a seller claims he did not know about a defect. He states the following:

Under the Texas Deceptive Trade Practices Act, it is unlawful for a seller to fail to disclose known defects, in order to induce you to make a purchase. In other words, if a seller knows of a major defect he must disclose it. I should point out that this law applies to all sellers, including individuals not in business. Under this law, a seller who knowingly fails to disclose facts, or takes steps to conceal them, may be liable for up to three times your damages plus court costs and attorneys' fees. To use the Deceptive Trade Practices Act you must first give the seller written notice of your complaint and the amount of your damages.

For more information about the Texas Deceptive Trade Practices Act, we recommend this video by Richard Alderman from a People's Law School session that explains the DTPA and how it can be used to assert your rights.

I just bought a new car, but I have now changed my mind and no longer want it. How long do I have to return it? 3 days?

Many people believe they have a 3-day right to cancel the purchase of a new motor vehicle, but that is not the norm. Richard Alderman, a Texas attorney who helped draft the Texas Deceptive Trade Practices Act, addresses this issue on his website. In response to whether a person can return a new motorcycle, he states:

As a general rule, when you sign a contract to buy something you are bound by the terms of that contract. There is no time limit within which you may just “change your mind.” In most cases, to get out of a contract, you must show that you were induced into the contract by fraud, duress, deceit or misrepresentation. There are a few exceptions to this rule.

One exception is for motor vehicle retail installment sales. A retail installment contract is a “transaction between you and the dealer to purchase a vehicle where you agree to pay the dealer over time, paying both the value of the vehicle plus interest,” according to the Consumer Financial Protection Bureau. That is, a retail installment contract does not apply to transactions that involve a loan. Section 348.111 of the Finance Code states that a buyer may rescind the contract under certain conditions, quoted below:

Sec. 348.110. DELIVERY OF COPY OF CONTRACT. A retail seller shall:
(1) deliver to the retail buyer a copy of the retail installment contract as accepted by the retail seller; or
(2) mail to the retail buyer at the address shown on the retail installment contract a copy of the retail installment contract as accepted by the retail seller.

Sec. 348.111. BUYER'S RIGHT TO RESCIND CONTRACT. Until the retail seller complies with Section 348.110, a retail buyer who has not received delivery of the motor vehicle is entitled to:
(1) rescind the contract;
(2) receive a refund of all payments made under or in contemplation of the contract; and
(3) receive the return of all goods traded in to the retail seller under or in contemplation of the contract or, if those goods cannot be returned, to receive the value of those goods.

You may also want to review the terms of the contract or agreement that you signed as it may contain cancellation provisions, a return policy, or a “cooling-off period.” Generally speaking, once you sign a contract, you are bound by the terms it contains. There may be exceptions (e.g., a contract was signed under duress, there was deception or fraudulent activity), but only an attorney can provide a legal opinion and inform you of your options.

It may also be possible to negotiate with the seller and come to a mutual agreement.

Is there a Lemon Law in Texas? Does it cover used cars?

The Texas version of what is commonly referred to as a lemon law starts at section 2301.601 of the Texas Occupations Code. The Texas Department of Transportation provides information about the Texas lemon law. They also publish a downloadable brochure about the lemon law. The law is complex and has specific deadline requirements. To assist consumers, the department offers an assistance hotline at (888) 368-4689 or (512) 416-4800.

How do I get an occupational driver's license?

Occupational driver's licenses are restricted licenses that let you drive at certain times and under specific conditions. They are obtained by petitioning a court, and only certain people qualify for one. TexasLawHelp.org has instructions and forms to use when requesting an occupational driver's license from the court.