Articles - Archived Expert Advice

Right of Rescission Rule

My mother is planning to purchase a vehicle, and the dealer has convinced her to pay with a credit card. I'm concerned! If she purchases with a credit card, is she still eligible for a full refund under the "right of rescission" rule?

A three-day right of rescission rule applies when a company is selling an item for $25 or more. It also requires the seller to inform the buyer of their right to cancel, entitling them to a full refund within three business days. However, this rule may not apply if one of the following situations is present:

• A document was signed waiving the right to cancel.
• The purchase is not primarily for personal, family or household use.
• The purchase is made entirely by mail or phone.
• The sale is the result of a prior consult at the seller's permanent business location.
• The item can't be returned in a condition similar to how it was received.
• The purchase is real estate, insurance, securities or a motor vehicle sold at a temporary location, provided the seller has at least one permanent place of business.

Although the method of payment is not a factor in whether a full refund is granted, the last situation mentioned means your mother's purchase may not be eligible for a refund, depending on where the vehicle is being sold.

If you are concerned about this purchase, trust your gut and ask her to back away from the deal and hold off until something better comes along. If she insists on making the purchase, consider taking the vehicle for a test drive, request a CARFAX Vehicle History Report and have an inspection by an independent mechanic.

If the vehicle's interest rate is higher than 4.75 percent, ask your mother to call LGFCU for an interest rate comparison. She may like what she hears!