Know before you go
- New Jersey dealers must give a limited warranty on most used cars under seven years old with fewer than 100,000 miles.
- There is no automatic three-day right to cancel a car purchase.
- Private sales are not covered by the Used Car Lemon Law.
Key takeaways
- Read the Buyers Guide on the window; its terms become part of your contract.
- Know whether the car qualifies for the dealer warranty before you negotiate.
- Once you sign at the dealership, there is no cooling-off period.
A used car is often the second-largest purchase a household makes, and it is one of the few where a signature at the dealership is close to final. New Jersey gives used car buyers real protections, including a warranty most dealers must provide, but they only help buyers who know to look for them before signing.
The Buyers Guide on the window
Federal rules require a dealer to post a Buyers Guide on every used vehicle offered for sale, displayed so both sides can be read. It can come off during a test drive but must go back on afterward. The guide says whether the car comes with a warranty or is sold as is, whether any manufacturer warranty remains and whether a service contract is available. The Division of Consumer Affairs advises buyers to get a copy at the time of purchase.
The guide is not just a label. Under the federal rule, what it says is incorporated into the sales contract and overrides anything in the contract that contradicts it. If a sale is conducted in Spanish, the guide must be provided in Spanish as well.
The dealer warranty New Jersey requires
New Jersey’s Used Car Lemon Law requires licensed dealers to give a limited warranty on a used car that meets all of these conditions:
- No more than seven model years old.
- Fewer than 100,000 miles on the odometer.
- A price over $3,000.
- Not declared a total loss by an insurance company.
How long the warranty lasts depends on mileage at the time of sale, whichever limit comes first:
| Odometer at sale | Dealer warranty |
|---|---|
| Up to 24,000 miles | 90 days or 3,000 miles |
| 24,000 to 60,000 miles | 60 days or 2,000 miles |
| 60,000 to 100,000 miles | 30 days or 1,000 miles |
The warranty covers specific parts of the engine, transmission and drive system, such as internal lubricated parts, the water pump, the torque converter, axle shafts and constant velocity joints. The buyer pays a $50 deductible for each repair of a covered item. Only on a car with more than 60,000 miles can a buyer waive the warranty to negotiate a lower price, and the waiver must be in writing.
What a dealer cannot do
State guidance lists practices that are unlawful for a dealer:
- Misrepresenting the mechanical condition of a used car.
- Failing to disclose a known material defect covered by a warranty.
- Failing to disclose, or misrepresenting, the terms of any written warranty or service contract.
- Advertising a used car without disclosing known prior damage and repairs costing more than $1,000.
These rules come from the Consumer Fraud Act, which can allow triple damages; see The New Jersey Consumer Fraud Act in Plain Language: What It Covers and How to Use It.
There is no three-day cancellation
The Division calls this a common misconception: once you sign a contract for a new or used car at the dealership, you do not have three days to cancel it automatically. Any right to return the car has to be written into the contract. Take your time before signing, not after.
A pre-purchase checklist
If a mechanic cannot inspect the car first, the Division suggests at least these checks:
- Test drive it, listen for noises and make sure every gauge works.
- Check that oil, transmission and radiator fluid are clean and full, and look for leaks where the car was parked.
- Test the lights, air conditioning and electronics.
- Look for water damage on the headliner and carpet, under the floor mats and in the trunk.
- Look for misaligned or over-sprayed body panels that suggest an accident.
- Check for uneven tire wear and a properly inflated spare.
- Get a vehicle history report, from the dealer or on your own.
Tip: Arrange financing before you shop. The Division suggests checking with your own bank or credit union, which lets you compare the dealer’s offer instead of deciding under pressure. If you feel pushed, walk away.
Private sales are different
Buying from a private seller can be cheaper, but those cars come with no warranty and are not covered by the Used Car Lemon Law. The same is true for cars sold as is, which do not carry express or implied warranties. Weigh the lower price against the loss of protection.
If the car turns out to be a lemon
During the dealer warranty, if the dealer fails to fix the same covered defect after three attempts, or the car is out of service for 20 days in total, the buyer may be entitled to a refund of the purchase price, not counting sales tax and fees and less deductions for excessive wear and personal use. Filing with the state Lemon Law Unit is free. The process is explained in New Jersey Lemon Law Basics: When a New or Used Car Qualifies and How the State Process Works.