Is there some written agreement about this transaction? The terms and conditions of the agreement should spell out your rights for any refund or partial refund here. Be aware that the seller held the car for you -- as against all other potential and ready buyers. It is unlikely that you are entitled to a full refund, but the details of the transaction and the provisions of the sales agreement will govern.
You may want to contact the Enforcement Division of the California Department of Motor Vehicles to determine the regulatory boundaries applicable to the dealer for this kind of transaction. The dealer must be licensed by that Department and that license is a tremendously valuable business asset. It is likely that the dealer will voluntarily comply with any DMV licensee regulations that limit the dealer's rights here.
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I did not see in your posting if there was a written contract containing the terms of your agreement or what the stated terms were, if any. Purchase usually requires written contract for goods of $500 or more. You should go to www.naca.net and find a lawyer in your area who handles automobile dealership fraud. If you delay too long, the dealer may try to take you to court and put you on the defensive on this, so I suggest that you act promptly to protect your rights.
Robert Stempler (please see DISCLAIMER below)
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