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Is a signed car purchase contract final and binding under WA laws can dealership cancel contract

Redmond, WA |

I purchased a car three days ago. The dealer called me today and said that he couldn't make the original deal and that he wanted $1K down and my payment would be reduced by about $15 a month. This is after all the loan papers were signed, transfer of title, etc and I drove off with the new {used} car. Said that if I didn't pay the thousand dollars that I was to bring the car back into the dealership and that I would be given my van back again.

I was under the impression that once the papers were signed, the deal was the real thing and legal and binding.

Does the dealership have the right to call and make a demand such as was given to me?

Attorney Answers 3


  1. I would need to review your papers in order to know for certain, but I think that you may be a victim of a car dealership scam known as a Yo-Yo transaction where a dealership is unable to get a finance company to purchase the installment sales contract. Check www.naca.net to find an attorney who practices in the area of auto dealer fraud to find someone in your area who can help you.


  2. I would need to review your papers in order to know for certain, but I think that you may be a victim of a car dealership scam known as a Yo-Yo transaction where a dealership is unable to get a finance company to purchase the installment sales contract. Check www.naca.net to find an attorney who practices in the area of auto dealer fraud to find someone in your area who can help you.


  3. Look at your sales and loan papers carefully and talk to a Consume Law attorney right away. You may not believe it but many car dealers deliver the car to you with no idea of whether or not your loan "really" is approved or not, because they know that if they can put you in their car, then they take you out of the shopping market and that keeps you from buying somewhere else. They worry about setting up the financing later and if they can't set up a lender, then they may call you back and say they need you to come back to the lot and sign a new contract for one reason or another (such as, a better loan rate, you don't qualify with that lender, etc). In many states, that can be illegal. Look at your sales paperwork for a document that is often called a Spot Delivery Agreement. That's a paper that says what how long the dealer has to set up the loan and what happens if they don't get it done on time. It usually says they have 3 to 30 days (usually on the short side of that total) and that if they can't set up a loan then you have to give them back the car and maybe pay for the mileage you drove on it. Whether or not you get your trade in or down payment back should also be covered. This whole process is called "dehorsing" by the car dealers themselves (you can read a Car Dealer's Slang Dictionary at this web page: http://ohiolemonlaw.com/car-dealer-dictionary.html) and doing it can be a violation of most state Unfair & Deceptive Acts and Practices laws. If your amount being financed is less than $25,000 (look at your finance contract's "federal box" where key finance numbers are stated) then it's very likely to also be a violation of the federal Truth In Lending Act too. Some states (like Ohio) also have a law that specifically applies to car dealers doing this sort of thing. If you don't have any spot delivery document in your deal and there is nothing on the finance contract that says it is contingent on financing approval and it says on it that the dealer (by its name) is the "creditor", then your deal may be a final contract and if the dealer can't get a lender to finance the sale for you then legally the dealer is probably stuck having to take your loan payments, but of course they won't tell you that and they, in fact, will probably say they don't have to at all. You need to talk to a local Consumer Law attorney who deals with this kind of case (it's called "autofraud" or car sales fraud). Call your local attorney's Bar Association or you can go to this web site page (http://ohiolemonlaw.com/locate-a-local-attorney.html) for a nation-wide listing of consumer lawyers and find one near you. Also, for every legal right you have, you only have a limited amount of time to actually file a lawsuit in court or you automatically lose (it's called the statute of limitations), so don't waste your time getting to an attorney and finding out what your rights are.

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