If you buy a car that is financed through the dealership, the dealer CAN cancel the contract, but only if it notifies you within 10 days of the date on the purchase contract. It is based on the language of the purchase contract. Look at your purchase contract. That’s the long yellow document that says “RETAIL INSTALLMENT SALES CONTRACT” at the top. Turn to the back of the purchase contract, and find the box that says “Seller’s Right to Cancel.” It is at the bottom of the second column.
California Buyers
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Car dealers are in the business of selling cars to consumers, not financing cars that consumers buy. So, this box advises you that after you sign the purchase contract and leave with the car, the dealership is going to find a finance company or bank to buy your contract. This language gives a car dealer the opportunity to find someone to buy your purchase contract. Most of the time this is not a problem. However, if the car dealer cannot find someone to buy your purchase contract, it can cancel the purchase contract. But, the car dealer must notify you within 10 days of the date on the purchase contract. If it does not, then the purchase is final and cannot be cancelled. Every purchase contract relating to a car purchase in California that I have reviewed has included this provision in it, and our firm has seen thousands of purchase contracts.
If the dealership cancels within 10 days, you get your down payment or trade-in back. The purchase contract requires the car dealer to return to you all consideration (i.e., everything) given for the purchase. This includes your trade-in vehicle. If you gave a $2,000 down payment and a car as a trade-in, the car dealer must give you back both the $2,000 and the trade-in when you return the car you purchased.
Sometimes a car dealer may tell you that it already sold your trade-in, and will offer you the value of the trade-in as listed on the purchase contract. The language of the purchase contract does not appear to give the car dealer this option. It requires the return of the trade-in. However, if the car dealer does sell your trade-in, at the very least, you should tell the car dealer that it has to give you whatever is the highest value for your trade-in out of either (1) the value of the trade-in as listed on the purchase contract, (2) the fair market value, or (3) what the car dealer received when it sold your trade-in.
The car dealer CANNOT charge you for using the vehicle you purchased from them. For instance, it cannot charge you for the miles put on the car during the 10-day period. However, you are responsible for any physical damage to the car during the time it is in your possession.
If the car dealer exercises its right to cancel the purchase contract within 10 days, you are not required to sign a second contract to purchase that same car. Let me repeat this. A car dealer cannot force you to sign a second contract. If the car dealer cancels the purchase contract with 10 days, you are obligated to return the car, and the car dealer must give you back any down payment or trade-in that you gave with the purchase.
The car dealer cannot cancel the purchase contract after the 10-day period has expired. If a car dealer tries to do this, you should advise it that your understanding is that the car dealer is no longer entitled to cancel the purchase contract, and ask the car dealer to send you a letter explaining why it thinks it can still cancel the purchase contract.
Learn MoreOn May 8, 2012, the Honorable Steven A. Brick denied Fremont Toyota’s Petition to Compel Arbitration in Burton v. Fremont Automobile Dealership, LLC, Alemeda County Case No. HG12618098, allowing the class action to proceed in court. The first class identified in Ms. Burton’s lawsuit is consumers who purchased vehicles from Fremont Toyota and signed backdated contracts. Ms. Burton alleges Fremont Toyota would cancel contracts and have customers sign new contracts, and the new contracts would be dated the date of the customer’s original contract. The second class identified in Ms. Burton’s lawsuit is consumers who purchased vehicles from Fremont Toyota and were automatically charged an Optional DMV Electronic Filing Fee. Ms. Burton alleges that instead of giving customers the choice of whether to pay Fremont Toyota to electronically submit their registration information to the DMV, Fremont Toyota automatically charged its customers for this service, profiting on every deal. Finally, the third class of consumers identified in Ms. Burton’s lawsuit are those consumers who purchased vehicles from Fremont Toyota and signed a Debit Authorization Form. Ms. Burton alleges the Debit Authorization Form contains provisions in violation of California law. Ms. Burton alleges Fremont Toyota backdated contracts, automatically charged consumers an optional fee, and used illegal Debit Authorization Forms with customers between February 21, 2008, and February 21, 2012.
If any of these practices happened to you at Fremont Toyota, in Fremont, or any other dealership in California, and you would like more information about this class action case or how the Auto Fraud Legal Center can help you, please feel free to contact Hawk Barry, either by phone at 800-466-5366, or via the contact form on the left.
Learn Morehttp://articles.latimes.com/2012/may/01/business/la-fi-lazarus-20120501 Highlights:
The Dodd-Frank Act gives the Consumer Financial Protection Bureau explicit authority to study use of arbitration clauses related to financial products and services.”
A 2007 report by Public Citizen found that, over a four-year period, arbitrators sided with credit card companies 94% of the time in disputes with California consumers.
Consumer advocates have long argued that it’s unfair to deny people the right to sue or to band together in class actions, which are often the only effective way of addressing relatively small claims.
So if the Consumer Financial Protection Bureau comes to the same conclusion, does it have the power to do anything about it?
The answer, it seems, is yes.
Learn MoreAuto Fraud Legal Center’s Auto Fraud Legal Center is pleased to announce San Diego County Superior Court Judge Luis Vargas approved a $94,500 cy pres award to the Make-A-Wish Foundation. The award comes from the case of Macias v. Acura of Escondido, in which it was alleged Acura of Escondido violated various California consumer protection laws by backdating retail installment sale contracts. For more information about this case, or any of the Auto Fraud Legal Center’s other class actions against California automobile dealerships and finance companies, please contact Hawk Barry at (800) 466-5366.
Learn MoreAuto Fraud Legal Center’s Auto Fraud Legal Center is pleased to announce the California Supreme Court has refused to review a trial court decision holding actions for rescission under the Automobile Sales Finance Act are subject to a four-year statute of limitations. The Supreme Court issued its order denying a petition for review filed by Santa Maria Ford and Wells Fargo Dealer Services on December 14, 2011, in Santa Maria Ford v. Superior Court (Martinez), Case Number S197395. In Martinez, Santa Maria Ford and Wells Fargo Dealer Services filed motions for summary judgment arguing Mr. Martinez’s claim under the Automobile Sales Finance Act was subject to either a one-year, or three-year, statute of limitations. In August 2011, the trial court agreed with Mr. Martinez the appropriate statute of limitations for an action for rescission of a written contract is four years pursuant to Code of Civil Procedure Section 337. Santa Maria Ford and Wells Fargo Dealer Services filed a petition for a writ of mandate with the Court of Appeal for the Second Appellate District, which summarily denied the petition. The Supreme Court then denied Santa Maria Ford and Wells Fargo Dealer Services’ petition for review.
In the underlying class action, Mr. Martinez alleges Santa Maria Ford and Wells Fargo Dealer Services violated the Automobile Sales Finance Act by failing to separately disclose fees on purchase contracts, and labeling fees as “not applicable” when in fact the customer was charged for the fees. The proposed class covers all persons who purchased vehicles from Santa Maria Ford between May 26, 2006, and May 26, 2010.
For more information on this, or any of Auto Fraud Legal Center’s class action lawsuits against car dealerships and financial institutions, contact Hawk Barry or Angela Smith at 800-466-5366.
Learn MoreAuto Fraud Legal Center has filed a class action lawsuit in San Diego County Superior Court on behalf of Jose Mondragon and three classes of auto purchasers against Ron Baker Chevrolet and Capital One Auto Finance. The first class identified in Mr. Mondragon’s lawsuit is consumers who purchased vehicles from Ron Baker Chevrolet and whose contracts do not separately itemize fees due to the DMV for license fees and registration, transfer, and titling fees. The second class identified in Mr. Mondragon’s lawsuit is consumers who purchased vehicles from Ron Baker Chevrolet in National City and were automatically charged an Optional DMV Electronic Filing Fee. Mr. Mondragon alleges that instead of giving customers the choice of whether to pay Ron Baker Chevrolet to electronically submit their registration information to the DMV, Ron Baker Chevrolet automatically charged its customers for this service, profiting on every deal. The third class identified in Mr. Mondragon’s lawsuit is all car buyers in California whose purchase contracts do not separately itemize fees due to the DMV for license fees and registration, transfer, and titling fees, and whose contracts are held by Capital One Auto Finance. Mr. Mondragon purchased a used Chevrolet Silverado from Ron Baker Chevrolet in National City in April 2010, and his contract falsely stated registration, transfer, and titling fees were not applicable to his transaction. Mr. Mondragon’s contract was assigned by Ron Baker Chevrolet in National City to Capital One Auto Finance. The contract, the standard form vehicle purchase contract used in California, included a clause whereby the holder of the contract, in this case Capital One Auto Finance, agreed to be responsible for any claims that could be brought against the seller, Ron Baker Chevrolet in National City.
If any of these practices happened to you at Ron Baker Chevrolet in National City, or any other dealership in California, or your contract was assigned to Capital One Auto Finance, and you would like more information about this class action case or how the Auto Fraud Legal Center can help you, please feel free to contact Hawk Barry, either by phone at 800-466-5366, or via electronic mail at hawk@rbblawgroup.com.
Learn MoreRecently, there was an article on msnbc.com discussing the latest deceptive practice used by car dealers. You’ve probably seen or heard the advertisements “We’ll pay off your trade-in — no matter what you owe.” Well, the FTC is cracking down on these advertisements:
http://bottomline.msnbc.msn.com/_news/2012/03/23/10815449-car-dealers-latest-deceptive-sales-tactic What a lot of people do not realize is that the amount used to pay off your trade-in is added to your new purchase contract. Thus, you are really financing your old and your new car together. It’s like consolidating debt or credit cards. If you continue to do this a number of times you end up financing a car that is worth a lot less than you owe on it.
Learn MoreAuto Fraud Legal Center has filed a class action lawsuit in Los Angeles County Superior Court on behalf of Aurelio Deniz and two classes of auto purchasers against Maurice J. Sopp & Son and Chase Auto Finance. The first class identified in Mr. Deniz’s lawsuit is consumers who purchased vehicles from Maurice J. Sopp & Son and whose contracts do not separately itemize fees due to the DMV for license fees and registration, transfer, and titling fees. The second class identified in Mr. Deniz’s lawsuit is all car buyers in California whose purchase contracts do not separately itemize fees due to the DMV for license fees and registration, transfer, and titling fees, and whose contracts are held by Chase Auto Finance. Mr. Deniz purchased a used Nissan Sentra from Maurice J. Sopp & Son in January 2010, and his contract falsely stated registration, transfer, and titling fees were not applicable to her transaction. Mr. Deniz’s contract was assigned by Maurice J. Sopp & Son to Chase Auto Finance. The contract, the standard form vehicle purchase contract used in California, included a clause whereby the holder of the contract, in this case Chase Auto Finance, agreed to be responsible for any claims that could be brought against the seller, Maurice J. Sopp & Son.
If any of these practices happened to you at Maurice J. Sopp & Son, or any other dealership in California, or your contract was assigned to Chase Auto Finance, and you would like more information about this class action case or how the Auto Fraud Legal Center can help you, please feel free to contact Hawk Barry, either by phone at 800-466-5366, or via electronic mail at hawk@rbblawgroup.com.
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