The Common Law

Cars – issues with buying cars

I recently bought a car from a used-car dealer. The sticker on the car said it was being sold "as is." The car started developing major problems only a few days after I bought it. The used-car dealer refuses to repair the car or to allow me to exchange it for another car. Am I really stuck with this lemon?

Unfortunately, the answer is most likely yes. The Federal Trade Commission's Used Car Rule requires dealers to post a Buyers Guide, also known as an "as is" sticker, on the side window of all used cars that are offered for sale. The "as is" language signifies exactly what you have come to find out – the buyer assumes any risk that the vehicle is defective. Practically, this means that if you buy a car "as is" and it breaks down just a few blocks after you have driven it off the car lot, the dealer has no legal obligation to repair the car.

In some circumstances, however, a consumer may be able to use the Texas Deceptive Trade Practices Act. Under the DTPA, it is against the law for a seller to fail to disclose known defects in order to induce you to purchase the item. Basically, this means that if the used-car dealer knew about any major defects in the car, he had an obligation to disclose that information to you. Accordingly, a person who buys a car "as is" may still be able to recover against the seller of the car if it can be shown that the seller knew about the problems but failed to disclose all of the relevant information (i.e., that it had major defects) about the car.


I'm looking at buying a new car within the next few weeks. My friend told me that after I buy a car, I can always legally return it within three days if I decide I don't want it. Is this true?

No. There is no three-day right to return a new car. If you sign a contract to buy a car, it's yours. Your friend is probably getting car sales confused with door-to-door sales. Texas law does allow a "cooling off period" that permits someone to return items they bought from door-to-door sales within three days.

Please submit column suggestions, questions, and comments to thecommonlaw@austinchronicle.com. Submission of potential topics does not create an attorney-client relationship, and any information submitted is subject to being included in future columns.

Marrs, Ellis & Hodge LLP, www.jmehlaw.com.

The material in this column is for informational purposes only. It does not constitute, nor is it a substitute for, legal advice. For advice on your specific facts and circumstances, consult a licensed attorney. You may wish to contact the Lawyer Referral Service of Central Texas, a non-profit public service of the Austin Bar Association, at 512-472-8303 or www.austinlrs.com.

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