In California, there is no “cooling off” period. Instead, the CA Car Buyer’s Bill of Rights gives used car buyers the right to purchase a 2-day cancellation option. So, should you purchase the option? Generally speaking, no. It is not cost effective.
First of all, and most importantly in our opinion, two days is just not enough time to figure out if there is something wrong with the car. Cars that are about to fall apart can easily be held together to last a couple of days. On the third day, if it falls apart you are not only out of the fees you paid, you are also SOL with a crappy car and additional repair costs.
Second, the option only applies to used cars under $40,000 and does not apply to private to private sales among other limitations.
Third, the upfront cost of the option is not cheap. The Bill of Rights provide guidelines on “how much you can expect to pay” for the option.
- $75 for a vehicle costing $5,000 or less.
- $150 for a vehicle costing more than $5,000, but not more than $10,000.
- $250 for a vehicle costing more than $10,000, but not more than $30,000.
- One percent of the purchase price for a vehicle costing more than $30,000, but less than $40,000.
Fourth, the back-end costs, are also high. If you return the car, the dealer can charge you a “restocking” fee. The maximum they can charge is high but one good thing is that the dealer must deduct the fee paid for the option from the total “re-stocking” fee.
- $175 for a vehicle costing $5,000 or less.
- $350 for a vehicle costing more than $5,000, but less than $10,000.
- $500 for a vehicle costing $10,000 but less than $40,000.
Finally, the conditions under which the car must be returned, although reasonable, are still somewhat restricting.
- To the dealer where purchased by close of business within two days, or within the time-frame allowed by the contract.
- Without exceeding the miles permitted by the contract.
- With all original receipts of the sales and Contract Cancellation Option Agreement.
- In the same condition as it was received, except for reasonable wear and tear and any defects or mechanical problems occurring after the buyer takes possession of the vehicle.
- Free of all liens and encumbrances, other than any lien or encumbrance created by the sales contract.
In conclusion, instead of paying a lot of money for a pretty weak option, spend a bit of money upfront and get the car checked. It is a no-brainer, and a far better option than paying for a Cancellation Option.