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When A Dealer’s Right To Cancel Purchase Contracts Causes You Difficulties

Every dealership purchase contract in California (and most of the lease contracts) will have a provision that allows the dealer (the Seller) to cancel the contract if the dealer is unable to arrange financing for your purchase. Dealerships, big and small, fraudulently use this cancelation provision to cheat consumers every day.

If you recently purchased a vehicle and the dealer tried to cancel your contract, Auto Law Firm, PC, can help. It is vital that you contact an experienced attorney as soon as possible to file your complaint. With years of experience representing clients throughout California state in a variety of auto law claims, you can trust attorney Michael Klitzke to fight for you.

Understanding A Dealer’s Right To Cancel A Contract

Most consumers purchase vehicles with a loan arranged by the dealer. No matter what a dealer tells you, finance companies do not approve loans before the vehicle is purchased. After you purchase the vehicle, the dealer is going to try to assign (sell) the purchase contract to a finance company.

The finance company will look at the signed purchase documents, your credit application, credit report, and may call you or your references before deciding whether to accept the purchase contract from the dealership.

Requirements For Cancellation

If the dealer is unable to arrange financing, the Seller’s Right to Cancel allows the dealer to cancel the contract if the dealer notifies you of the cancellation within ten days of the purchase.

Notice can be actual (such as a telephone conversation) or in writing. If the dealer puts a letter in the mail on day ten, that counts even if you do not receive the letter until later. Sometimes, dealers will backdate the letter, so it is a good idea to save the envelope because the postmark on the envelope shows the date it was actually put in the mail. Some dealers will send a letter on day ten, but then keep trying to arrange financing. If the dealer is still trying to arrange financing, then the dealer has not canceled the contract.

If the dealership cancels the contract, the consumer returns the vehicle and gets 100% of their down payment back, including the return of the trade-in vehicle. If the dealer is unable to return your trade-in, the dealer cannot cancel the contract.

How Can Auto Law Firm, PC, Help

Even when dealers do not have the contractual right to cancel the contract (i.e., failed to cancel within ten days, the dealer can’t return your trade-in, or refuses to refund 100% of your down payment), they will still try to force you to give up the vehicle – some even resort to grand theft auto. Auto Law Firm, PC, can help stop the dealership from trying to illegally cancel your contract so you can maintain your purchase and payment arrangements.

Don’t Hesitate To Contact Auto Law Firm, PC, Today

To schedule a free consultation, call Auto Law Firm, PC, at 619-878-7037 or send a message using an online contact form. The legal team at Auto Law Firm, PC, can assist clients in San Diego, Los Angeles and throughout the entire California state.