May 15 2008
Dealer Fraud - Common Topics
Odometer Roll-back
Previously Rental Car
Contract Re-negotiation
Warranty Fraud
Down PAyment Fraud
Prior Lemon Law Buyback
Title Fraud
Frame Damaged Vehicles
Optional Equipment Fraud
Identity Theft & Co-signer Fraud
Hear Sir/Madam,
This is not comment but rather an inquiry.
I am impressed on how you handles your client in different automobiles fraud cases. I’ve read your article regarding Downpayment fraud, changes on financing terms, asked to come back to re-sign a new auto loan documents.
Background infomation:
A couple of months ago, I accompanied my girlfriend to a used car dealerhip in Pasadena. She fell in love with the used Mercedes though high mileage (122,500 miles) but they said its year 2000. After we test-drove, I looked at the interior side of the door it says year 1999. I immediately pointed out to the salesperson about the year as indicated. He said, used car is always SOLD with a year more and it will be in the contract, as business practice in this industry. At this point we believe them, it seems most of our questions were answered.
In short, my girlfriend proceeded reading and signing purchase contract at 7.99 percent for 3-years with an approved financing for $8,000. A little over a week later, we received a call from the manager (the same person who prepared the contracts and another call the Salesperson) to come back to the dealership in order to sign new set of loan document because they claimed that the credit score was low as well as downpayment ($880.00 d/p, sells price was $7,795.) We told them that we need at least 3-4 days more to comeback, since we have to come together and re-aligned our days off. Two days later, we received another call from the Salesperson he found another bank to finance the purchase but this time with 11.99% interest. I personally asked of him that it was the final interest rate becuase if its went higher we will just return the vehicle and ask for the downpayment to be returned to us. he said no problem. About 3 days later, we have not received any calls from them to check on thebest time to comeback and sign new set of documents. He said, the manager don’t come to the office until noon. A few days later we receved a call from the saleperson that we just have to return the vehicle becuase my girlfriend did not qualify for financing. Then, my girlfriend told me to just return but she ask what will happen to her downpayment. Over the phone the saleperson said no problem just bring in the vehicle. At the same time he still looking for a bank to approve my girlfriend’s application so it won’t inconvenienced everybody but just doing all works at once. So, we waited for an instruction from the saleperson.
In May 10, 2008, it was approximately, 2 and 1/2 weeks, since the first day we drove out the vehicle from the dealership and while awaiting for a call from the salesperson on new bank and timing of going back to the dealership. We received a call from the manager to return the vehicle the next day and we will discuss about the return of buyer’s downpaymnet. I personally dropped off the vehicle but I was told by the manager that we are not getting our downpayment back since we have driven the car of approximately 1100 miles (all happened in a week’s time). Car was well garaged while awaiting for dealer’s decison on financing options. A few days later after returning the vehicle, I followed up several times asking about the salesperson or manager but I got nowhere. They said we have no way of getting it back since we did not qualify for a loan with other banks.
QQ.
-What is our chance of getting our downpayment back?
-What is our rights regarding this matter?.
-Isn’t it a misrepresentation when a dealership/salesperson approved our loan and ratified sales contract.
-Why they let us drove it out of the yard? and Congratulated.
Please let me know if you need more information.
I appreciate for any advice that you may have in this regard.
Thank you.
Sincerely,
Tom
Glendale, CA
Tom,
Thank you for your inquiry. Your’s is a very common scenario and you absolutely have a right to get your money back. Almost all sales contracts have a line that says if they fail to get you approved within 10 days they reserve the right to take back your car. That condition comes with the assurance that you’ll get your down payment back. Otherwise it would be absurd. A lot of dealers take advantage of these situations and withhold all or some of the down payment. Others make up lies about financing falling apart and use that story to pressure the buyer to re-sign a new contract with a higher interest rate or a higher price.
Take for example a guy who puts down $10k to buy a car and then financing fails - should the dealership keep the down payment? clearly no! So the same applies in your case. An argument can be made that you got the benefit of using the vehicle but first off it was not your fault, secondly they told you to keep it for now, thirdly they got the benefit of using your down payment money during that same time and lastly they cannot just arbitrarily withhold your down payment in exchange for the use (the contract should have set terms for such a out come). Thus you definitely should get your money back.
I will contact you within the next few hours to discuss. You may feel free to call me at my office anytime at 877-97-Lemon or 818-397-9624.
Very Truly Yours,
Hovanes Margarian, ESQ.