Can a dealership make you bring a car back after they've sold it to you?

Posted by Samantha Embry | Aug 06, 2019 | 2 Comments

Here is an all too common scenario: 

 A customer needs a car. For the sake of this scenario, we are going to call the customer Clyde.  Clyde wants or needs more reliable transportation so he goes to a car dealership to see if he can buy one.  When he's at the dealership,  the salesperson helps him pick out a car, the salesperson takes all of his pertinent information and has Clyde sign all of the paperwork required to purchase the car.  The salesperson hands Clyde the keys to his car and tells him to enjoy his new ride. Clyde is happy he was approved for a car and drives away a satisfied customer.  Clyde gets the car insured and has shown all of his friends and family his nice car. 

A few days or even weeks later, the dealership calls Clyde and tells him that (1) he needs to bring the car back because the financing didn't go through or (2) that he needs to come back in to sign some more paperwok and bring a much larger down payment because the bank or lender wouldn't approve the financing without it.  On top of all of this, they've already sold the car Clyde traded in as a down payment and they tell him that any money he's already paid is nonrefundable.  

Clyde feels so embarrassed.  He knew his credit wasn't amazing, but he gave the dealership everything they asked for:  bank statements, paycheck stubs, a down payment, references, and even traded in the only car he had.  Clyde is also confused.  What is all this paperwork the dealership gave him if the financing didn't go through? He has a bill of sale, odometer disclosure, financing agreement and a stack of papers showing he bought a car.  Can the dealership do this?  To make matters worse, they are telling Clyde if he doesn't bring the car back, they might have the vehicle repossessed or reported stolen!  Now, Claude is mad and feels like he's been violated, but what can he do?  

Whether the dealership can ask Clyde to bring the car back depends on a few things:          

  1. Does the contract explicitly state the final sale is contingent upon the dealership being able to locate and secure financing for the vehicle? Did they tell Clyde when they handed him the keys that the sale wasn't final yet?.  They also would have to tell him that if the financing didn't go through, he would have to bring the car back.  Did Clyde sign anything saying this? 
  2. Was there a bailment agreement?   A bailment agreement states that the sale is void if the dealer can't get you financed in a certain amount of time. The bailment agreement needs to be in writing and Clyde would need to know about it. 

Absent the two things listed above, if a dealer tells Clyde to bring a car back after he's entered into a contract with them, they may be in violation of several laws including: fraud, truth in lending act, unfair and deceptive business practices, the fair credit reporting actand others. 

These types of transactions are called "yo-yo" transacations or "spot deliveries".  If this has happened to you and the dealership is refusing to refund your down payment or has already sold your trade-in, you may be entitled to damages.  It is best to consult a consumer protection attorney - one who handles auto fraud to assist you with your case.  Embry Legal handles auto fraud cases and would be happy to consult with you on your case. 

To read more about yo-yo sales or spot deliveries in Georgia,  you can visit this link: http://consumer.ga.gov/uploads/pdf/AAEP_-_Revised_102518.pdf

About the Author

Samantha Embry

Samantha Embry is a passionate advocate and avid legal researcher who believes everyone deserves dedicated legal representation.  After almost a decade of working in the insurance industry, Samantha decided to pursue her desire to help people through law. While working a full time job and raising...

Comments

Darryn WilliamsReply

Posted Oct 02, 2020 at 01:13:28

I purchased a trucking on The 6 of September paying $6,800 down, I sighed dealership contract, arbitration agreement,title transfer, Gap coverage, payment amount, and was told until they secured financing and proof of insurance I could not leave lot with truck .finally they provided me with keys to truck and deal was done . After 2 weeks driving the truck paying for repairs and maintenance I received a text saying contact financing company to do a “welcome interview” there the bank verified my down payment and confirmed my monthly payment obligation and date due. at this point I further felt this was my truck then making upgrades to truck spending $5,000 on truck. Days later I saw my credit being hit with car financing inquiries, I immediately called dealership to see why , he then explain finding fell threw and he’s getting me a new deal , and then asked me to send in a (pay sub) so I used my real employer and (created a stub with more income ) and sent it in as weeks continued to go by I hear nothing from dealership I reached out to them numerous times to see if I was ok with my truck , finally someone there told me to contact original financing manager at 11am 9/28/20 he then told me he found me a new deal with Lowe interest rate to come sign. On 9/30/20 I arrived only to find they blocked the truck in told me they could not get me financing with bank first because of my false pay stubs but only later to find out that it was credit wasn’t strong enough so they asked me for more money down and/or a co signer so they begin to run my wife’s we the. Provided them with more documentation as well as had my employer send them my pay info directly they told us the same bank approved my wife , and to bring both are stubs and proof of home etc , on 10/1/20 we returned with everything they re submitted us to same banks and told me minutes later no luck that I have to leave truck , I asked what about all the money I put In including repairs and all out money down he said they’ll have to activate the”bailment agreement” this was the first time I’ve ever heard of this I asked what’s that he the. Went and typed up an agreement with my name dated 9/6/20 as if it’s something i had originally I refused to sign explaining my risks and guidelines this should have been given to me originally ! I would if never pulled off knowing the risks , now I’ve lost almost 13,000 I had the car 23 days never any communication or notice if a bailment agreement

Samantha Embry Reply

Posted Oct 28, 2020 at 10:25:42

Hi Darryn,

Thank you for contacting Embry Legal. We regret to hear that you have gone through such an tremendous ordeal. If you would like to schedule a consultation, please contact us directly at 678-631-7744 or via email at [email protected]

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