Yesterday, we discussed what to do when a dealership cancels your car contract. However, it is important for you to know of a few things that car dealerships cannot do. For instance, the car dealer cannot charge you for using the vehicle you purchased from them. It also 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. Again, a car dealer cannot force you to sign a second contract. If the car dealer cancels the purchase contract within 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 also cannot cancel the purchase contract after the 10-day period has expired. If a car dealer tries to do this, you should inform them 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 still can.

Unscrupulous dealers prey upon consumers’ misunderstanding of the contracts they have signed. If you believe that a dealership violated California lemon law in your last car purchase or has mislead you about your purchase contract, contact our office today for a free evaluation. Our California lemon law lawyers have successfully litigated cases of auto dealership fraud cases for more than two decades.

Rosner, Barry & Babbitt, LLP — California lemon law attorneys

Yesterday, we discussed how dealerships are allowed to cancel your car contract, but only if they do so within 10 days of the date on the purchase contract. 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 everything that was 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:

• The value of the trade-in as listed on the purchase contract
• The fair market value
• What the car dealer received when it sold your trade-in

Tomorrow we will discuss what car dealers CANNOT do with your car contract. If you believe that a dealership violated California lemon law in your last car purchase, contact our office today for a free evaluation. Our California lemon law lawyers have successfully litigated cases of auto dealership fraud cases for more than two decades.

Rosner, Barry & Babbitt, LLP — California lemon law attorneys

Our law firm helps many consumers looking to get out of bad car contracts, but it is important for everybody to know that car dealers can also cancel a car contract. If you buy a car that is financed through the dealership, the dealer is allowed to cancel the contract. However, it can only cancel the contract if it notifies you within 10 days of the date on the purchase contract. If you look at the back of your purchase contract, you will find the box that says “Seller’s Right to Cancel” at the bottom of the second column.

The “Seller’s Right to Cancel” 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. While most of the time this is not a problem, the car dealer can cancel the purchase contract if it cannot find someone to buy your purchase contract. However, 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. The dealership is then the finance company for the contract and you can make your payments to it.  Every purchase contract relating to a car purchase in California that we have reviewed has included this provision in it, and our firm has seen thousands of purchase contracts.

Tomorrow we will discuss what to do if the dealer does cancel within the 10 days. If you believe that a dealership violated California lemon law in your last car purchase, contact our office today for a free evaluation. Our California lemon law lawyers have successfully litigated cases of auto dealership fraud cases for more than two decades.

Rosner, Barry & Babbitt, LLP — California lemon law attorneys