Know Your Rights
The Truth in Lending Act (TILA)
The dealer must show you the full cost of the loan before you agree to anything.
The Truth in Lending Act, which applies nationwide, requires the dealer to give you details about financing your car. These details include the **total amount** of money you will have to pay, including fees and interest, expressed as a yearly rate (APR) and an overall total.
The dealer must provide a TILA disclosure when or before you sign your contract. If you do not get one, or if it does not match exactly what the dealer tells you, that is a red flag. Tell the dealer you will not sign until you receive full written disclosures as required by federal law. Some dealers may try to use hidden fees or say “we’ll finalize that later.” Under TILA, they cannot. You can file a complaint with the Consumer Financial Protection Bureau (CFPB) for a TILA violation.
The Federal Trade Commission (FTC) Used Car Rule
Dealers must put a Buyers Guide on every used car that says whether the car is under warranty or not.
The Used Car Rule, which applies nationwide, requires the Buyers Guide to be clearly visible and state whether the dealer is selling the car “as is” (meaning you pay full repair costs) or with a warranty (the dealer pays for some repairs). The dealer must disclose how long the warranty lasts and which repairs are covered. The dealer must also give you a copy of the Buyers Guide at the time of sale, which you should review to make sure it matches the contract.
If there is no Buyers Guide on the car (usually a window sticker), tell the dealer you need to review the Buyers Guide before you agree to anything. If your car needs repairs, you will want to know how much the dealer will cover. The FTC can fine dealers up to $50,000 per car without an accurate Buyers Guide.
The Odometer Law
The dealer must tell you the car’s true mileage in writing.
The Odometer Law, which applies nationwide, requires the dealer to provide a written **odometer disclosure statement** at the time of sale, which must say whether the mileage the car displays is accurate. A car listed at 50,000 miles might be worth thousands more than a car listed at 100,000 miles, so demand a signed mileage disclosure if the dealer does not provide one or if you suspect it might be inaccurate.
Odometer fraud is a **federal crime** with potential prison time as a consequence. You can also get more than $10,000 in a lawsuit. Importantly, the Odometer Law requires dealer disclosure; it does **not** guarantee the mileage is correct, or that past owners didn’t hide anything. It’s good to check vehicle history reports to verify.
The Fair Credit Reporting Act (FCRA)
The dealer must tell you how your credit report affected the terms of your loan.
The FCRA, which applies nationwide, requires the dealer to tell you if your credit report (your borrowing history) was used to determine your rate and, if so, give you a written explanation of how your credit report affected the decision, called an **adverse action notice**. The dealer must also tell you which credit bureau (Equifax, Experian, or TransUnion) was used.
Ask the dealer whether your credit report was used to determine the rate. If yes, ask for the adverse action notice and the credit bureau used. If the rate seems high, you can ask what specific part of your credit is affecting it. You can report a violation to the CFPB.
The Equal Credit Opportunity Act (ECOA)
Dealers cannot treat you differently based on race, gender, or national origin.
Under the ECOA, which applies nationwide, a dealer must apply the same standards to all applicants and consider each application individually. If something feels off, request a written explanation of how your rate was determined. You can sue for damages to enforce the ECOA, and government agencies can also demand civil penalties or restitution (payment to you from the dealer to make up for being wrongly charged).
California Car Buyer’s Bill of Rights
Dealers must disclose add-ons, keep your interest rate reasonable, and allow independent inspection.
Under the Car Buyer’s Bill of Rights, a California law, dealers can only increase your interest rate by a certain amount (depending on the length of the loan). They must show the price of every **optional product** separately and, for some used cars, must include a 2-day cancellation option. You also have the **right** to have the car independently inspected before you buy it. A dealer might, for example, tell you the car needs $3,000 in add-ons and try to convince you to buy them all. However, many of the add-ons are optional in reality. In California, you can ask for an itemized list of the add-ons, and the dealer must give it to you.
California Civil Code § 2981.9
Everything you agree to must be in one written contract.
Civil Code Section 2981.9, which applies in California, requires the dealer to put all terms in a single written agreement and give you a copy of it. The dealer cannot make you agree to something verbally or on the side; **everything** you agree to must, by law, be in this contract. If the dealer promises you something verbally, ask them to include it in the contract before you sign. For example, a dealer might tell you “we’ll fix any issues for free,” but as soon as you sign the contract, go back on their word. This law fixes that problem.
California Consumers Legal Remedies Act
A dealer cannot use deception or misrepresentation when selling anything.
The CCLRA, which applies in California, requires the dealer to accurately tell you the price, condition, and features of the car. The dealer cannot hide important information that they know could affect your decision. If you see any changes that look weird, or that you can’t explain, ask the dealer to explain why it’s different from what you were told, or show you **where that is stated in writing**. Remember, everything you agree to must be in writing. You can sue for damages or to force changes to your contract.
California Vehicle Code § 11713
Dealers cannot lie, mislead you, or use deception when selling a car.
Under **California Vehicle Code § 11713,** dealers can’t advertise cars they don’t have, change the price or terms later, hide a car’s history, or keep ads up after a car is sold. They also can’t add fake fees or say “no down payment” if that isn’t true.
They can sell cars, advertise deals, and offer financing, but everything has to be real, available, and clearly explained before you agree to anything.