Does the cooling off rule apply to car loans?
I just bought a car that I’m having second thoughts about. I've read that the Federal Trade Commission has a cooling-off period for buyers—does this also apply to car loans?
Great question! The Federal Trade Commission’s cooling-off period gives you three days to back out of a sale listed under the rule. However, this does not apply to every car sale, and does not apply to car loans.
The cooling-off rule applies to:
- Sales made at your home, workplace, or dormitory.
- Sales made at a seller’s temporary location, like a hotel or motel room, convention center, fairground, or restaurant.
- Sales that involve you inviting a salesperson into your home.
If you have cold feet about a car loan, although the cooling-off period doesn’t apply, you still have some other options:
- Pay the car loan off early.
- Pay the car loan down to the break-even point and sell it.
- Trade the car in once you have positive equity.
Getting to these stages might take months or years, but you won’t damage your credit as a result of non-payment. Furthermore, given time, you may even grow to love your current car!
And since you’re making your payments on time for the sake of your credit, make sure to save extra money by shopping around for car insurance. The easiest way to do this is through the Jerry app—we’ll get you customized quotes from over 50 top insurers so that all you need to do is choose the plan that works best for you!
Best of luck! Hopefully you’ll be able to bond with your car over time.
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