Can Auto Dealer Cancel Contract After Funding?

[awright517]

I purchased a car on 7/14 (brand new). Dealership would not let me take car as recalled part was discovered and needed replacement, they gave me a rental car to use while waiting for part to come in and replace. On 7/23 car was complete and I was supposed to recieve it when finance department at dealership called and said that they cancelled the contract. The reason they gave me was "because they could not make me happy". Hoping I'd fall for that lame excuse, but I didn't. In any event, I had received confirmation from finance company (GM Finance) on 7/19 that loan had been funded and funds dispersed to dealership. I went through my contract with a fine tooth comb and the only 2 reasons I found stating dealership had the right to cancel the contract was due to "lack of being able to finance purchaser" or "if misreprentation occured with credit", neither of which applied. I never did have the car so I returned the rental car to the dealership and they gave me my old trade in vehicle back. I was not happy, as far as I was concerned, the car was financed, the loan was in my name and I was financially responsible for it until the dealer decided to return the funds (I verified several times with GM Financial after this happened).

As you can well imagine I was not happy about what happened and I was not about to just shrug my shoulders and walk away. I wrote a letter to the GM of the dealership copying in the President of their parent company and also some higher up exec's at GM to not only let them know what happened, but to also let them know how I was treated, which was anything but professional. I got the attention of someone because the controller of the dealership called me last Sat. afternoon letting me know he'd received a copy of the letter from the parent company and was basically groveling and doing what he could to smooth the situation over. After letting him know that I wasn't stupid, that I knew that the reason they cancelled the deal was not because they couldn't make me happy, but because of something else and I would appreciate his honesty, he let me know that they basically were not happy with the trade value / allowance they gave for the vehicle I was trading in (at the time they made the deal) and didn't feel they would be able to get as much as they valued it at when it went to the auction. I explained that as unfortunate as that was for them, at that point it was not my problem. The i's had been dotted and the t's crossed and at that point they should have accepted the loss they were going to take and use it as a learning experience so it wouldn't happen again, but that me as the customer should not have had to be the brunt of their mistake. He completely agreed and apologized and offered to try and personally help me if I was interested in still trying to purchase a car. I let him know I'd have to think about it.

My questions is, can a dealership legally do this after a deal has been finance and they have received the funds for the deal from the finance company? I am located in Arizona and I've contacted the Attorney General's office who has been no help and only letting me know I could file a complaint, but they could not help me with the legality of the situation. I have been hard pressed to find any attorney specializing in automobile dealership fraud.

Thank you in advance.

[awright517]

I purchased a car on 7/14 (brand new). Dealership would not let me take car as recalled part was discovered and needed replacement, they gave me a rental car to use while waiting for part to come in and replace. On 7/23 car was complete and I was supposed to recieve it when finance department at dealership called and said that they cancelled the contract. The reason they gave me was "because they could not make me happy". Hoping I'd fall for that lame excuse, but I didn't. In any event, I had received confirmation from finance company (GM Finance) on 7/19 that loan had been funded and funds dispersed to dealership. I went through my contract with a fine tooth comb and the only 2 reasons I found stating dealership had the right to cancel the contract was due to "lack of being able to finance purchaser" or "if misreprentation occured with credit", neither of which applied. I never did have the car so I returned the rental car to the dealership and they gave me my old trade in vehicle back. I was not happy, as far as I was concerned, the car was financed, the loan was in my name and I was financially responsible for it until the dealer decided to return the funds (I verified several times with GM Financial after this happened).

As you can well imagine I was not happy about what happened and I was not about to just shrug my shoulders and walk away. I wrote a letter to the GM of the dealership copying in the President of their parent company and also some higher up exec's at GM to not only let them know what happened, but to also let them know how I was treated, which was anything but professional. I got the attention of someone because the controller of the dealership called me last Sat. afternoon letting me know he'd received a copy of the letter from the parent company and was basically groveling and doing what he could to smooth the situation over. After letting him know that I wasn't stupid, that I knew that the reason they cancelled the deal was not because they couldn't make me happy, but because of something else and I would appreciate his honesty, he let me know that they basically were not happy with the trade value / allowance they gave for the vehicle I was trading in (at the time they made the deal) and didn't feel they would be able to get as much as they valued it at when it went to the auction. I explained that as unfortunate as that was for them, at that point it was not my problem. The i's had been dotted and the t's crossed and at that point they should have accepted the loss they were going to take and use it as a learning experience so it wouldn't happen again, but that me as the customer should not have had to be the brunt of their mistake. He completely agreed and apologized and offered to try and personally help me if I was interested in still trying to purchase a car. I let him know I'd have to think about it.

My questions is, can a dealership legally do this after a deal has been finance and they have received the funds for the deal from the finance company? I am located in Arizona and I've contacted the Attorney General's office who has been no help and only letting me know I could file a complaint, but they could not help me with the legality of the situation. I have been hard pressed to find any attorney specializing in automobile dealership fraud.

Thank you in advance.

[breeze]

It's not fraud, it's breach of contract. You can file a complaint with your state's DMV, but it wouldn't be worth the money and time to sue them to enforce the contract. You can try to pressure them though if you really want that deal badly. I'd probably find another dealer and move on.

 

I wouldn't let them keep the trade in for several days next time.

[Labyrinthine]

I once bought a used car that came with a dealer warranty. Financing was finalized, the loan was funded and the next day the transmission started stuttering. Per the warranty, I took it in. They decided to cancel the sale and tell me financing couldn't be finalized. Funny, because I knew this wasn't true. I never fought it because I decided I didn't want to do business with that kind of company.

 

I suggest you do the same: take your business to a more ethical dealership.

[Sandscrit]

It seems strange that a dealership would risk a lawsuit for breach of contract.

Edited August 9, 2013 by Sandscrit

[MarvBear]

 

Can Auto Dealer Cancel Contract After Funding

 

Yes, there are sometimes occasions where it is possible.

[BRBiz]

This doesn't seem like one of those occasions!.. Sounds like they found a serious issue or twowith the trade.

[ICANHASMUNY?]

Make them honor the contract, - and give you the car or you're going to file suit.

 

it's their Sales fault , not yours.

 

Floyd Bybee, a consumer lawyer in gilbert/tempe may be able to help.

 

I would write another letter to GM Execs on what the dealer said to you, because it's surely not what he responded to his higher ups.

[mk_378]

This deal is definitely off. Since you took your old car back and drove it some more, they can rightfully say that it is no longer in the same condition as when they wrote the deal, and refuse to give you the same price for it. At this point even the best lawyer in the world can't do much for you.

Edited August 10, 2013 by mk_378

[ICANHASMUNY?]

Debatable.. I would still write back to the Exec's and post this on the local BBB website, social media.

[Sandscrit]

How about getting an attorney to review the contract?

[ZicMan]

1. dealerrater.com start there. they will get an email stating the unsatisfactory rating and then also call you again to get you to delete it/change it

2. Please check your email for surveys etc from GM regarding your purchase and tell it all there

3. Write to GM again

4. Write to GMAC (assuming that is who the finance company was that says they have a funded deal in your name)

 

Bad publicity is the worst thing you can do to a dealership. They will "try" to make it go away. It is a gray area there though as for if they did something wrong or unethical but moreso IF it were illegal which it was not. You have several issues here as one poster pointed out already:

 

1) You never EVER took delivery of said vehicle

2) You should have stayed in that rental/loaner UNTIL your new car was ready for you to take delivery

3) You took your trade back and that opens up all kind of outs for the dealer.

 

Why is it you think you are unable to get that same deal somewhere else at this point? Did you buy this on the last day or near the last day of the month?

 

Its a tough situation and frustrating no matter which way you look at it.

[hoapres]

 

 

Can Auto Dealer Cancel Contract After Funding

 

Yes, there are sometimes occasions where it is possible.

And at the big dealers, you can be pretty sure that a lawyer looked over the contract.

[BRBiz]

 

 

 

 

 

Can Auto Dealer Cancel Contract After Funding

 

 

Yes, there are sometimes occasions where it is possible.

And at the big dealers, you can be pretty sure that a lawyer looked over the contract.

You would think so but this often not the case.. Large companies often do dumb things with out legal advice. They just assume every one else is to stupid to know their rights or won't do anything about it any way.

[Sandscrit]

Under federal law, a auto dealership can cancel a contract within 10 days,aka the ten day rule.

[ICANHASMUNY?]

Under federal law, a auto dealership can cancel a contract within 10 days,aka the ten day rule.

 

 

please quote the exact law.? ( just for informational purposes)

[MarvBear]

On the front of my RISA there is a section called "Seller's Right to Cancel" that has a _________ to input the number of days we give ourselves, if we choose to exercise our right to cancel. It is in the prescribed type font size and meets all federal requirements, since some states are more restrictive, our particular RISA is specific to the state in which we operate. Upon advice from our legal counsel, we programmed our DMS to print the number "30"in that particular blank. It is only applicable if the contract cannot be funded exactly as it is written.

[Sandscrit]

 

Under federal law, a auto dealership can cancel a contract within 10 days,aka the ten day rule.

 

 

please quote the exact law.? ( just for informational purposes)

I can't find any contract law to substantiate the 10 day rule (Selllers right to cancel contract).

[BRBiz]

 

 

 

Under federal law, a auto dealership can cancel a contract within 10 days,aka the ten day rule.

 

 

please quote the exact law.? ( just for informational purposes)

I can't find any contract law to substantiate the 10 day rule (Selllers right to cancel contract).

It doesn't exist!

[Bradgrubbs]

They broke a legal contract. Of course you can sue them!!!

[Sandscrit]

The seller has a right to cancel if it is included in the contract language.

[tomforr]

On the front of my RISA there is a section called "Seller's Right to Cancel" that has a _________ to input the number of days we give ourselves, if we choose to exercise our right to cancel. It is in the prescribed type font size and meets all federal requirements, since some states are more restrictive, our particular RISA is specific to the state in which we operate. Upon advice from our legal counsel, we programmed our DMS to print the number "30"in that particular blank. It is only applicable if the contract cannot be funded exactly as it is written.

Marv - The Op states that the contract was funded. I assume that this clause would not apply in that instance?

 

OP - I agree with others who say to find another dealer that won't do you like this.

[MarvBear]

I don't know of any reliable way for a consumer to know when a contract funds to a dealer, absent getting your first payment notice.

[BRBiz]

I don't know of any reliable way for a consumer to know when a contract funds to a dealer, absent getting your first payment notice.

Unless GM Financial provides proof it was funded.. If it ever went to court I don't see GM financial hiding things for the dealer.

 

As others have said its probably best to just move on but if you have the time and money to bring them into court do it. I don't like to see companies getting away with BS like this but for most its just not worth it for them to fight it and companies know this.

[tomforr]

I don't know of any reliable way for a consumer to know when a contract funds to a dealer, absent getting your first payment notice.

Which makes complete sense to me. I was just looking at the "letter of the law" aspect.

 

I still think the OP should find another dealer