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Are car purchases refundable?

A salesman at a car dealership. - iStockphoto, courtesy Getty Images

Buying a car is obviously a big commitment, but many Canadians don’t know exactly how high the stakes are. Unlike many other consumer products, you typically cannot return an unsatisfactory vehicle, or even get your deposit back.

Many provinces have “cooling-off” periods in which a consumer can change their mind about a purchase without penalty, but it doesn’t apply to vehicles. There’s no grace period and there’s no law that says you can return one.

Many consumers, however, tend to assume the opposite. A 2014 survey by the Ontario Motor Vehicle Industry Council found that only 13 per cent of respondents knew that a car purchase was non-refundable.

Sales are typically final and you can only get a refund or return if some contract stipulation wasn’t met. For example, a prospective buyer might insist that an independent mechanic okay the car before purchase and, if it fails, that would void the sales contract.

Dealers, however, won’t provide those loopholes. If you want conditions of sale, you need to establish them yourself. Otherwise, a dealer is entitled to keep “liquidated damages — the costs already incurred as part of the transaction — such as shipping or advertising.

Some dealerships may have return policies, but it’s at their discretion.

It’s different if there’s a legitimate problem with the vehicle.  Most Canadian provinces don’t have laws to protect buyers who end up with a “lemon,” but a dealer may take it back or you can pursue binding arbitration through the Canadian Motor Vehicle Arbitration Plan.

It’s a major purchase, so think it through. This is one sector where rash decisions can really cost you.

Read more:

Buying a new or used vehicle: your rights (Ontario)

Buying or selling a used vehicle (Alberta)