Skip to main content

Can i get out of a contract if the loan hasnt gone through?

San Clemente, CA |

i bought a car from a used dealership and as soon as i drove off the lot going home the check engine light came on. the dealership said they will take care of it but they are acting really sketchy and unprofessional and now i dont want to go through with the loan. is the contract valid seeing the money hasnt been paid?

Attorney Answers 4


Someone needs to LOOK at the contract itself to determine your rights. They may include issues related to dealer acting real sketchy. Feel free to get in touch with a consumer protection firm like mine found here for a no fee consultation.

Mark as helpful

3 lawyers agree


I agree with attorney Kaufman.

You need to be very very careful . As a California Attorney and one of the very few that are Fraud Examiners ( CFE member of the Association of Certified Fraud Examiners) i receive every day alerts about new scams. . You describe in your question one of those schemes. and

Disclaimer: The information contained in this website is provided for informational purposes only, and should not be construed as a legal advice on any subject. No recipients of content from this site,clients or otherwise,should act or refrain from acting on the basis of any content included in the site without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from an attorney licensed in the recipient's state. The content of this website contains general information and may not reflect current legal developments, verdicts or settlements. The Karamanlis Powers Law Offices expressly disclaims all liability in respect to actions taken or not taken based on any or all of the contents of this website, weblogs, twitter, facebook, google+.

Mark as helpful

2 lawyers agree


Buying a car in California is different than other states. When you sign the sales contract, the dealership is your lender. The dealership then has 10 days to find another bank to buy the loan. If it doesn't, then it can cancel the agreement. However, after the 10 days, it is a valid contract and you would have to make your payments to the dealer.

This is a separate issue from the mechanical operations of the vehicle. Your ability to pursue the dealer for mechanical issues depends in part on what sort of warranty the dealer gave you. Did you buy the vehicle AS IS?

Our law firm has handled many cases like this. Feel free to check our our website below.

All states and jurisdictions have statutes that make it unlawful for any person or group of persons to hold themselves out as attorneys unless admitted and licensed to practice as an attorney at law. The hiring of a lawyer is an important decision that should not be based solely upon advertisements. Before you decide, ask us to send you free information about our qualifications and experience. This site may include information that constitutes a legal advertisement. Each of the attorneys at Rosner, Barry & Babbitt, LLP dba AUTO FRAUD LEGAL CENTER, is licensed to practice in the State of California, and the information contained herein applies only to California. They are not licensed to practice in other states. The materials on this site are provided for informational purposes only, do not constitute legal advice, and do not necessarily represent the opinions of Rosner, Barry & Babbitt, LLP or any of its attorneys. There are no guarantees that the materials are correct, complete, or current. This site is not intended to create and does not create an attorney-client relationship between you and Rosner, Barry & Babbitt, LLP and you should not rely on any information in this site without seeking the advice of an attorney. Do not send us confidential information via e-mail without first speaking with one of our lawyers and obtaining authorization to do so. E-mailing information to Rosner, Barry & Babbitt, LLP does not create an attorney-client relationship.Rosner, Barry & Babbitt, LLP cannot serve as your counsel in any matter unless you and our firm expressly agree in writing that we serve as your attorney. To the extent the State Bar rules require us to designate a single attorney responsible for this site, Rosner, Barry & Babbitt, LLP designates Hallen D. Rosner as the attorney responsible for this site. California lemon laws and California used car lemon laws protect consumers. There is a California lemon lawyer available that will help answer any questions that you may have regarding CA lemon law. The California lemon attorney at Rosner, Barry & Babbitt, LLP believes that helping consumers stay informed about their rights is an important way to prevent auto fraud and California car lemons. Our California lemon law attorney is available to help you understand your consumer rights. There is a California lemon law lawyer at Rosner, Barry & Babbitt, LLP that will explain your rights and help protect you from fraudulent car dealers.

Mark as helpful

3 lawyers agree


Sorry to hear about your dilemma. If the check engine light came on the same day of the purchase, this strongly suggests there was an existing problem when you purchased it. If that is the case and the dealership knew about it then it should have disclosed it to you prior to the sale...and its failure to do so under those circumstances would arguably violate California statutory and common law and entitle you to rescind the transaction (as well as recover other damages). As for the validity of the contract in light of the loan not yet being assigned...I believe the failure to have the loan assigned to a lender as of yet will not void the transaction. Feel free to give me a call for a free consultation to discuss your case in further detail. I wish you luck!

The above is general legal and business analysis. It is not "legal advice" but analysis, and different lawyers may analyse this matter differently, especially if there are additional facts not reflected in the question. I am not your attorney until retained by a written retainer agreement signed by both of us. I am only licensed in California. See also terms and conditions item 9, incorporated as if it was reprinted here.

Mark as helpful

Criminal defense topics

Recommended articles about Criminal defense

What others are asking

Can't find what you're looking for?

Post a free question on our public forum.

Ask a Question

- or -

Search for lawyers by reviews and ratings.

Find a Lawyer

Browse all legal topics