Rights Come Standard When Buying a New Car in Massachusetts
Buying a new car is the biggest decision a consumer will make, second to buying a home. The process of negotiating against a “seasoned veteran,” when you may consider yourself a “rookie” buyer, can be a very intimidating and trying experience. However, the fastest way to upgrade your car buying confidence is to do your research, ask the right questions, and inform yourself of the rights available to consumers in the Commonwealth of Massachusetts.
Before you make the purchase, plan a best and worst-case scenario in your negotiations; set a range of pricing in your mind that you will not go above. The dealer’s best-case scenario is the manufacturer’s suggested retail price (MSRP), but there is wiggle room on their profit margin. When you start negotiating, offer your lowest reasonable price first and work your way up from there. If all goes well you should be able to agree on a price somewhere between the dealer’s asking price and your offer. But, be prepared to walk away if their bottom line exceeds your price range. It could be that the dealer was not willing to bargain or that the car was not in your price range. Either way, there are plenty of other dealers out there and bargains waiting to be had.
If you are like most car buyers, you can’t just hand over a check for a new car, so you will have to secure financing. Don’t think that just because a dealer is securing your financing it is the best deal you can get. You can and should shop around for the best financing available. Moreover, what makes financing the best does not always mean the lowest monthly payment. Sit down and work out the numbers because your monthly payment is going to depend on many factors: the price you negotiated, your credit score as it affects your annual percentage rate (APR), and the length of the loan. It’s important to weigh all those financing options before you sign any contract to find the best numbers that work within your budget.
There will be an inquiry to your credit score as it influences your APR and financing. It’s appropriate for dealers to ask questions in regards to your income, expenses, debt or credit history. But personal information is not relevant. You are protected by the Equal Credit Opportunity Act (ECOA) against credit discrimination related to gender, race, religion, age or other status. It’s important to understand your rights under this act.
Just like the ECOA, the Truth in Lending Act (TILA) is another protection available to consumers. TILA requires that you receive written disclosures of the terms of your credit agreement before you sign the purchase and financing agreements. You are entitled to these disclosures by law and if they are not offered to you by the dealer or financing company, you should request them. Knowing what you’re signing before you sign is imperative. If and when these disclosures are made and you agree with the terms and conditions of the contracts, you can sign the sales contract and financing agreement with confidence.
Finally, after all the research, negotiating and financing, you’ve purchased your new vehicle. You drive it off the lot and enjoy your first whiff of new car smell. But the new car smell is quickly replaced by a burning smell because the radiator has blown. Here again you are protected under the law. The Massachusetts Lemon Laws, M.G.L. c. 90, §§ 7N ¼ and ½, protect consumers who have purchased new or used cars that turn out to be defective. In most cases a “lemon” is a new or used car whose defect impairs the value or safety of that car. The law ensures you have a warranty available which allows you to have the dealer repair the defect. However if the repairs fail to fix the problem, the dealer should accept a return of the vehicle and refund the full contract price. As the consumer you can and should request, within your refund, any and all incidental costs related to the defect of the vehicle. You may hold on to the vehicle until the refund is provided to you.
Don’t feel you have to memorize your rights to be an informed consumer. In Massachusetts, a clear listing of your rights is required to be placed on the window of each new car, as well as in your ownership manual. Failure of a dealer to comply with any of your rights can result in serious consequences. If you feel like your rights are being violated, stop and take a step back. Remember, you know the important questions to ask, the disclosures you are entitled to and the rights you hold as a consumer. Demand your rights be respected.