Can car dealer back out of deal once contract has been signed?

January 21, 2016 13:11 by Consumer Ed

Dear Consumer Ed:

Yesterday afternoon I purchased a new car and was able to get a great deal.  However, today I received a voicemail from the dealer, asking me to come back in to discuss the deal.  From his tone, I assumed they didn't make any money on the deal.  Regardless, the contract was signed and accepted.  I took delivery of the vehicle and paid them on the spot, with a check from my bank. Can the dealership back out of this deal or demand more money?

Consumer Ed says:  

This sounds like a case of “seller’s remorse.” Generally speaking, there is no “cooling off period” – i.e., a legal right to cancel a vehicle purchase contract for either the buyer or the seller. Once all of the requirements for completion of the transaction are satisfied and you have signed the necessary paperwork, you have bought the vehicle. However, it is important that you read all of your vehicle purchase documents carefully. Although unlikely, if the dealership retained the right to back out of the contract, if the contract provides a basis for modifying certain terms later on, or if some event or act must occur in order to finalize the deal, the wording of the contract should include those provisions.  If such provisions are not contained in your contract, it would appear that your transaction is complete, and therefore the seller should not be able to change the terms of the agreement once it has been signed.  If the seller tries to change the terms, you need to consult with an attorney before agreeing or taking any action.


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Odometer and dealer sticker did not reflect true mileage on used car

October 27, 2015 16:00 by Consumer Ed

Dear Consumer Ed:  

I bought a car at a used car dealership. The sticker on the window read “89,000 Miles” and the odometer reflected the same number.  The paperwork the dealer gave me had the same mileage but also had “TMU,” which means “true miles unknown.”  I now want to return the car because I discovered through an AutoCheck vehicle report that the car actually has 300,000 miles on it.  The dealer is saying I can’t return it. Help!

Consumer Ed says:

Under these circumstances, you may have limited options in returning or refunding your vehicle if, as appears to be the case, the dealer correctly disclosed information regarding the vehicle mileage. Federal law requires sellers to disclose the miles on the odometer, and, if the seller knows that the odometer reading is different from the number of miles the car has actually traveled, include a disclosure indicating the true miles are unknown.   It appears that the dealer who sold you this car made the appropriate disclosure to ensure that you knew the 89,000 miles odometer reading was inaccurate. 

You may still have some recourse, however, if you can show that the dealer knew the actual vehicle mileage at the time of sale.  If the dealer knows the real mileage, then he or she must disclose that number and is not lawfully able to hide a higher odometer reading by using the “TMU” designation.  

Clearly, at some point, the vehicle odometer was altered.  Although not necessarily suggested by these facts, it is possible the dealer may have unlawfully manipulated the odometer reading.  AutoCheck may be helpful in determining the approximate time the odometer discrepancy occurred.   If the appearance of this discrepancy coincides with the dealer’s purchase or acquisition of the vehicle, this could suggest the dealer unlawfully altered and/or replaced the odometer and then disclosed the mileage as “TMU” in an effort to cover its actions.  The law prohibits sellers from changing the odometers in this fashion and misusing the “TMU” disclosure.  Both of the instances above would be an unfair and deceptive practice under the Georgia Fair Business Practices Act as well as under applicable federal law.  You may have a claim under these laws if you can prove the dealer engaged in these practices.

With very few exceptions, however, purchasing a used car is an activity that is almost always at the buyer’s risk.  Unless you can show that the dealer knew the real vehicle mileage or altered the odometer to begin with, you may be stuck with your higher-mileage vehicle.  You can visit the website of the Department of Law’s Consumer Protection Unit at www.consumer.georgia.gov to learn more about your rights in these situations or to file a complaint against the company.

 

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Used car dealer won't refund money for faulty vehicle

August 6, 2015 21:41 by Consumer Ed

Dear Consumer Ed:  

I bought a car at a used car dealership.  When I drove off the lot, I noticed the transmission slipping. When I took it to my mechanic, he said the car needed a new transmission, which would cost about $2,000. I took the car back to the dealership, but they said I purchased it “as is,” and they refused to give me my money back or to repair it.  What are my rights?

Consumer Ed says:  

When a car is sold “as is”, the car is sold in its current condition, which means the buyer accepts the car with all known and unknown problems at the time the car is purchased.  So, if something goes wrong or breaks down after you purchase the car, the cost of any repairs is almost always the buyer’s responsibility.  Generally, unless the dealer made a representation about the condition of the vehicle that he knew to be false, “as is” pretty much covers the dealer on any faults the car has.

Contrary to popular belief, there is no “cooling off” period when it comes to car purchases. Further, when cars are sold “as is”, verbal promises usually don’t apply (see the exception above).  

However, there is information that offers buyers some protection, and which is required by law to accompany every sale of a used car by a dealer.  It is contained in the Federal Trade Commission’s Buyer’s Guide, which must tell you:

 

  • whether the vehicle is being sold “as is” or with a warranty;
  • what percentage of the repair costs a dealer will pay under the warranty;
  • that spoken promises are difficult to enforce;
  • to get all promises in writing;
  • to keep the Buyer’s Guide for reference after the sale;
  • a brief description of the major mechanical and electrical systems on the car, including some of the major problems you should look out for; and
  • a reminder to ask to have the car inspected by an independent mechanic before you buy. 

 

Whenever you purchase a used car from a dealer, you should receive the original or an identical copy of the Buyer’s Guide that appeared in the vehicle that you bought.  The guide must reflect any changes in warranty coverage that you may have negotiated with the dealer.  It also becomes a part of the sales contract, and overrides any contrary provisions that may be in the contract.  If the dealer promises to repair the vehicle or cancel the sale if you’re not satisfied, make sure the promise is written on the Buyer’s Guide. If the promises are not written on the Buyers Guide, you will have a hard time getting the dealer to make good on his word.  

Consult your copy of the Buyer’s Guide to determine if the vehicle was in fact sold “as is.”  If the dealer failed to provide a Buyer’s Guide or to indicate that the car was being sold “as is,” with no warranty, you may have recourse against the dealer and may be able to return the vehicle.

For more information on purchasing a used car, visit www.consumered.com


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