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  Consumer Handbook 
Consumer Handbook 
  I bought a car on Saturday evening but changed my mind after I read some of the papers on Sunday morning. Do I have an absolute right to cancel the contract within 72 hours?
No. A 72 hour cancellation notice applies to certain home solicitation transactions, telephone solicitation transactions, and home improvement contracts. It does not apply to automobile purchases. However, if you discover problems with the vehicle after the purchase which significantly impair its value, you may be able to utilize a different remedy. The problem must be concealed or difficult to discover and significant enough that you would not have purchased the vehicle if you had known about the problem. If you think this circumstance applies to you, you should immediately contact an attorney for assistance.
  I have had credit problems in the past. When I purchased my most recent car the “finance person” at the dealership told me that I had to buy credit insurance. Do I have to do this? Also, the salesman told me that he needed to adjust the sales price of the car I was buying and the trade-in value of my car so that it would appear as if I had a greater equity or down payment. Is this proper?
No. The law states that you can be required to buy credit insurance only if it is disclosed to you on the Retail Installment Contract. As to the trade-in value, that is a problem which may violate some consumer credit laws. Remember, honesty is the best policy and the car dealer will “fudge” the numbers only if the dealer profits. For either of these problems, you should contact an attorney.
  I have had repeated problems with my new vehicle. Despite several attempts, the dealer doesn’t seem to be able to correct the problem. What can I do?
Like many other states, Texas has a Lemon Law statute. It is administered by the Texas Department of Transportation, Motor Vehicle Division, P.O. Box 2293, Austin, Texas 78768. Phone 800.622.8682. You can get a pamphlet with Lemon Law information and a complaint form by writing to the Department of Transportation at the above address.
  What type of problems are covered by the Lemon Law?

The problem must be significant.  However, the word “significant” like the word “beauty”, is often in the eye of  the beholder.  For instance, a piece of weather stripping or molding that has come loose is probably not a significant problem.  However, it may be a clue that a significant problem does exist.   


The Motor Vehicle Commission divides significant problems into two categories: 


1.  Safety issues and 2. Non safety issues.  Once again, these problems can vary.  A defective seat spring that pokes through the seat upholstery is probably a non safety defect in the rear or passenger seat.  However, if there is a defective seat spring in the drivers seat that distracts the driver while operating the vehicle, that may be a safety defect.  There is also a cumulative problem provision which involves 30 days out of service without a loaner car.

  Why is it important to distinguish between safety and non safety defects?
Two repair call visits of a safety related nature entitle you to remedies under the lemon law. If the problem is a non safety problem it takes four visits to entitle you to those remedies.
  What remedies am I entitled to under the Lemon Law?
The Lemon Law is generally a warranty enforcement provision. The Motor Vehicle Commission can make the manufacturer buy back the vehicle, replace it with a similar vehicle, or order that it be capably repaired. However, the Motor Vehicle Commission rarely awards monetary damages and cannot award attorney’s fees.
  What if I don’t like the decision of the Motor Vehicle Commission?
The decision is binding on the automobile manufacturer but not on you. If you don’t like the decision you can hire a lawyer and file a lawsuit. However, the automobile manufacturer is allowed to tell the Judge or jury about the lemon law commission finding.
  I have experienced numerous mechanical problems with my used car. Can the lemon law help me?
No. The lemon law only applies to the purchase of new vehicles. However, if you bought a used vehicle which is still subject to the manufacturers warranty, carefully review the manufacturers warranty and contact the manufacturer. The manufacturer will often intervene and assist you if you are having warranty difficulties. If you have a manufacturers warranty it can be honored at any authorized dealer. You do not have to return the vehicle to the selling dealer for manufacturer warranty work.
  I bought a used car with an extended service contract. The service contract company will not help and the dealer tells me he sold the vehicle to me “As Is”. What can I do?
If you purchased the extended service contract at the same time that you purchased the vehicle or within ninety days thereafter from the selling dealer, the dealer cannot disclaim any warranties. This means that you did not buy the car “As Is” even if you signed papers that said so. The service contract is the warranty and the dealer must honor the warranty. The “As Is” document violates the law and may entitle you to monetary damages. You should consult an attorney.
  What if I’m having problems with my used car but I didn’t buy a service contract and the car was sold “As Is?”
The “As Is” disclosure is strong medicine and there is probably not anything you can do unless you can prove that the dealer knew or should have known of the problem. You may be able to prove this through service records, talking with previous owners or talking with mechanics or body shop professionals who state that the problem is obvious to a knowledgeable person.
  I bought my car from an individual, not a dealer. Does the law treat them differently?
No. Almost all of the laws regarding the sale of vehicles are the same for individuals as for dealers.
  I think the salesman pressured me into buying credit life and disability insurance and an extended contract when I didn’t really want one. What can I do?
You can immediately write to the insurance company or service contract provider and cancel either the contract or the insurance. However, do this sooner rather than later. Refunds under these services are often calculated under a method called the Rule of 78s which deducts a larger amount at the beginning of the loan term and a lesser amount in later periods.
  I purchased a car at a local new car dealership which arranged financing for me. They made me sign a temporary delivery agreement and said that it was just a formality. What is this document and what does it mean?
This document is the source of many bad transactions for consumers. Few buyers realize it, but a car dealer does not provide the funds for you to buy a vehicle. The money is provided by third party lenders. Lenders consider your loan a transaction that is separate and independent from your purchase of the car. The dealer may actually offer to sell your Retail Installment Contract to several different lenders and will choose the lender which provides the most money for the dealer, not the best loan terms for the buyer. Potential lenders are not bound to you until they agree to buy the Retail Installment Contract. This is the reason that the dealer asks a buyer to sign a Temporary Delivery Agreement: You are driving the vehicle without completing the financing transaction. Dealers argue that the Temporary Delivery Agreement is a convenience to the Buyer so that the Buyer can drive the vehicle home while waiting for credit approval. Consumer advocates state that the real reason the dealer wants you to sign the document is because the Dealer is afraid you will find a better deal at another location and the Dealer will lose the sale. If there is an unexpected problem with the buyer’s credit or no lender is willing to buy the loan on the terms proposed by dealer, the dealer may ask the buyer to return the vehicle or sign an amended Retail Installment Contract. The new contract will never be a better deal for the buyer. The buyer should immediately contact an attorney if he is asked to sign a second contract under these circumstances.
  I bought a used car from a dealer a year ago. I have contacted him many times but I have not yet received the title or any record that the title has been applied for. What can I do?

This is a very serious problem which may be an indication of even bigger problems.

The law requires the title to a used vehicle to be transferred immediately.  This is particularly so if you pay cash for the vehicle.  Never pay for the vehicle in full unless you receive the title at the same time or are at least given a chance to inspect the title.  The potential problems are serious.


            The law allows a car dealer twenty (20) working days to prepare and submit the application for certificate of title.  All fees collected from you should be paid by that time as well.  Car dealers sometimes run into problems with a title.  They could lose the original title, the person that sold the vehicle to the dealer may be late in delivering the title or even more sinister problems can occur.  A delayed title is often an indication of:


            a)            an odometer disclosure problem;

            b)            a wrecked or reconditioned vehicle;

            c)            a fraudulent title to a stolen vehicle; or

            d)            financial problems of the dealer. 


A licensed car dealer must post a bond with the State of Texas in the amount of $25,000.00.  The bond is to compensate anyone who buys a car from the dealer but does not receive a title or anyone who sells a car to the dealer but does not receive payment.  However, the $25,000.00 bond is often insufficient to cover more than a couple of transactions.  Act quickly because recovery on the bond is “first come- first served.”

  I took my car to a repair facility last month. The repair facility performed work that I did not authorize and charged more than they said they would. I argued with them about these problems but ended up writing a check so I could get my car. On the way home, I realized that they did not fix the problem. I was so mad I stopped payment on my check. What can they do?
If you stopped payment on the check the repair facility can repossess your car if they provided notice to you of the right of repossession. This notice must be provided to you before they attempt to cash the check. You should immediately express your complaint in writing and probably should consult an attorney. If you cannot afford to have your car repossessed, you should pay the check.
  Based upon your advice above I paid the check to the repair facility but I’m still steamed. What can I do?
The law states that a worker such as a mechanic provides an implied warranty of “good and workmanlike” service. It cannot be disclaimed and does not need to be provided in writing. The difficulty of your position is that you must prove that the mechanic did not properly perform the repairs. The most practical way to do this is to immediately take the car to another repair shop. Have them inspect the car and provide a written report of work that needs to be done and the cost to perform the work. Ask them if the work performed by the previous repair facility was performed properly, if at all. Ask them to write their brief opinion on the repair order. Keep any parts that are involved. You can then complain in writing on your own or hire an attorney.
  Many of these remedies sound like something I can do for myself. When should I consult an attorney?

You should consider contacting an attorney after you have attempted to resolve

the problem yourself.  Hopefully, your efforts to resolve the problem were made in writing.  If not, do so immediately or at least record your memory of the conversations on paper. 


Most disputes can be resolved either on your own or with minimal effort of an attorney.  However, these are some warning signs that probably require the assistance of an attorney:


a)      You learn that the vehicle had suffered serious damage in a prior collision but this was not told to you at the time you purchased the car;

b)      You have not received the title or the non negotiable certificate of title (pink slip) within forty five days after the sale;

c)      An authorized dealer refuses to honor the factory warranty because of a defect in the car prior to your ownership;

d)      The vehicle’s odometer has been altered;

e)      You have been asked to sign a revised Retail Installment Contract and other purchase documents under less favorable terms than your original transaction;

f)        Your vehicle has been repossessed even though you have made all of your payments to the lender (except for mechanic’s lien repossessions).

  If I buy a vehicle I don't like, can I cancel the a contract within three days?
Generally not, unless it is part of the agreement. However, if the car dealer violates the law in the process of selling you the car, then you probably can cancel the deal as long as the vehicle is in substantially the same condition as it was when you got it and you tried to cancel the deal within a reasonable time.