Can I return a used car because of mechanical defects after I’ve made a payment on my car loan?

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Can I return a used car because of mechanical defects after I’ve made a payment on my car loan?

I just bought a used car from a dealer. I made a down payment and my first car payment but I just found out that the car has a mechanical defect which has resulted in a class action suit against the maker. I feel like the dealer knew this but did not disclose the information to me. Can I return the vehicle?

Asked on March 24, 2012 under General Practice, Hawaii

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

The first issue isn't whether you "feel like" the dealer knew--but whether the dealer did in fact know, or reasonably should have known. If the dealer did know or must have know--for example, there was some notice of the defect which went out prior to the purchase; or the defect is such that just by driving/moving the car around and the like, the dealer  would have become aware of it--then, if the defect was sufficiently "material," the dealer may have committed fraud.

A "material" defect is basically a significant or important one; one which goes to the car's safety, it's usability, or it's value to a significant extent. Not every defect rises to this standard--for example, faults with the radio or climate control typically would not. If the defect was material, then if the dealer  knew of it, you may be able to rescind the transaction--return the car and get your money back. If it was a non-material defect however, while you may be entitled to some compensation or a repair, it is very unlikely that you could rescind the transaction.


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