Often a customer will not qualify for financing upon the terms on the first contract. The customer may be required to increase a down payment, higher APR, etc. in order to qualify for a loan. The dealership has the customer come to sign a second contract with the different terms but backdates the second contract with the date of the first contract. This affects the finance disclosure laws in that the customer is being charged interest for a time period in which the contract is not yet in effect, etc. In addition to making a material misrepresentation regarding when the customer takes the obligation of the new contract, a backdated contract often also violates the single document rule because another form (usually called Acknowledgment of Rewritten Contract) has the actual date when the contract was signed. Further, many customers are not told that they do not have to sign a second contract, instead they can choose to cancel the contract and return the new vehicle and have the down payment and trade in vehicle refunded. Finally, a dealership only has 10 days to tell you they want to make changes to the contract or cancel the contract. After the 10 days, the dealership cannot change the deal.
OFFICE ADDRESS
The Law Offices of Hovanes Margarian
13425 Ventura Blvd.
Suite 303
Sherman Oaks
CA 91423
818.990.0418
I just bought a toyota corolla on may 3 2010. They offer a 0% APR deal special. They approved me with a $1500 downpayment. I signed the contract and i have my car with me but yesterday the financial guy called me and told me they want $2000 more. If a do not have the money. what can they do??? Are the going to take my car away?? Can they do that?
Thank you
Thank you for the comment. Generally, there is a ten day grace period within the agreement during which time if the dealership fails to secure financing it has the option to cancel the sale. This means they get to take the vehicle back and refund your entire down payment. Note that this is regardless of how many miles you have driven the vehicle. Please read your contract to find out if such a ten day provision was included therein. If so, notify the dealership of the miles driven and the fact that you cannot afford to pay more. They will assess their circumstances and often times let you keep the vehicle according to the original agreement. If they opt to take it back then you must either return it or negotiate a new deal. Note that if they are proposing to keep the same purchase price and accordingly reduce your monthly payments in correlation to the extra $2,000 then perhaps they are being genuine. However if they are attempting to increase the sales price in order to get you approved then they are simply trying to defraud you. Feel free to call our offices if this matter does not get resolved amicably and promptly.
I recently bought a 2010 Dodge Challanger two days ago. They told me I was being given a 2.99% Interest Rate, which was a special deal they were only allowing to give to few customers. Well today I was just notified by the dealership saying I didn’t get the 2.99% interest rate that they have to increase it to a 3.99% interest rate. I asked what does this mean and why now are they discovering I dont qualify. The guy responded saying the 2.99% was for only a 5yr loan not a 6yr which is what I had. He told me not to worry that my payments won’t go up b/c they are going to change the trade in value that they gave me to a higher amount so my payments stay the same. I dont know if this is shady or some sort of scam, b/c I find it odd that they didn’t have this info from the beginning. Im now thinking they told me I could have the car for a 2.99%IR just to reel me in. Anyway let me know if this sounds suspicious b/c if so I’m going to cancel the contract and give back the car for my old one.
Your situation is fairly common. Sometimes it is a way to induce a sale. In most of those cases they call back and say instead of 3 percent the rate is now 10 percent. In reality they never had a means to give the low rate. Your case could be the same. However, since they are only increasing the rate one percent it is possible that it was an oversight on their behalf. I know that the longer the finance term the higher the rate. So it is very plausible that they did mix up the two available rates. From a legal stand point you do have a binding agreement and if they wish to change any term then you may opt to refuse and thereby force them to cancel the transaction all together. In CA in this situation they will be forced to either honor the terms or refund you all your payments and/or trade-in regardless of how many miles you put on the new vehicle. However, from a practical perspective if they are willing to increase your trade-in value enough to compensate for the higher rate that means that your loan amount will be reduced. This means if you make your payments over a period of six (6) years you will end up paying the exact same amount. If you end up paying off the loan sooner then six (6) years you will end up spending less on the vehicle. So if they do reduce the loan amount you will be advantaged by this change. However if you want to use this as an excuse to get out of the deal all together or if they try to increase your monthly payments or the term of your payments then simply refuse to sign any new agreements. I presume you are in CA and the above discussed laws apply in CA. If you are out of state you should take the basics on my analysis and consult with a local attorney to make sure you cover possible local state variations in the law. Thank you for the comment. Please do comment back regarding your results so that I and my readers may know what happened. If this matter does escalate and you are in CA, please do call me at my office.
- Hovanes Margarian, Attorney At Law
818.990.0418
I just bought a new car, i signed the papers and everything. i got my monthly payments plus my my first payments amount and due date. and took the car home 13 days later i get a phone call saying the bank did not approve the 6 yrs, only 5 yrs and that i had to come in and sign new contracts. he even told me the guy who financed me is no longer with the company. what am i to expect? Thanks.
This can be brilliant reports. Are grateful for discussing this with united states!
Cheers.
Fantastic write-up ! I want to know once you update your site, where can i subscribe for a blog?.The item helped me a good deal. I’d been small amount aware about that although your post provided distinct idea
Hey mate, thanks for writing but this article isn’t viewable when using IE it is is overlapping.
Good job!
Why’s generally there a really good article!
I used to be very happy to search out this internet-site.I wanted to thanks on your time for this wonderful learn!! I undoubtedly having fun with each little bit of it and I have you bookmarked to take a look at new stuff you blog post.
well view in which time most people liveAs your Novice, I will be generally searching online intended for reports which will help everyone. Thanks a ton
Pretty nice post. I recently found your web site and wanted to point out that Ive truly enjoyed browsing your site posts. In any event I will be subscribing to your feed and that i i do hope you write again immediately!
Great post, I’m sure blog owners should acquire so much from this web blog its really user friendly .
I have been studying your entries all through my morning break, and I will have to admit the whole article has been very enlightening and rather well written. I believed I might help you understand that for some reason this blog does not view neatly in Web Explorer 8. I wish Microsoft could stop converting their software. I have a question for you. Would you thoughts exchanging blog roll hyperlinks? That may be truly neat!
I recently want to complete a quick comment in order to express gratitude back for the people wonderful pointers you might be posting here. Time consuming internet investigation has in the end during the day been rewarded with quality means to offer my guests. We would state that many of us readers are very endowed to take place in a wonderful network with the greatest marvellous people who have useful hints. I feel quite privileged to acquire used your webpages and look forward to really more fabulous minutes reading here. Thanks again for several things.
I merely wanted to complete a quick comment to be able to express gratitude for you for people wonderful pointers you’re posting at this site. Time consuming internet investigation has towards the end throughout the day been rewarded with high-quality ways to tell my guests. I’d personally state that a lot of us readers are really endowed to appear in a wonderful network with the greatest marvellous people who useful hints. I am quite privileged to have used your webpages and show off forward to really more fabulous minutes reading here. Thanks again for lots of things.
I adore what you posted. I seriously concur with whatever you wrote.
Just desire to say your article is s astounding. The clearness on your submit is just excellent and that i could assume you’re knowledgeable on this subject. Well along with your permission let me to snatch your feed to stay up to date with forthcoming post. Thanks a million and please carry on the gratifying work.
Amazing art!
I like the helpful information you provide in your articles. I will bookmark your weblog and check again here frequently. I’m quite certain I’ll learn many new stuff right here! Good luck for the next!
Nice! Just wanted to respond. I thoroughly loved your post. Keep up the great work.
Maybe you have thought of including way more movies for your blog site posts to maintain the readers significantly more entertained? I necessarily mean I just learn via the whole piece of writing of yours and it was somewhat decent but considering that I’m significantly more of a visible learner,I uncovered that to become much more practical very well let me understand how it turns out! I enjoy what you guys are continually up also. These kinds of intelligent deliver the results and reporting! Preserve up the amazing operates guys I’ve additional you guys to my blogroll. This can be a very good posting thanks for sharing this helpful tips.. I’ll go to your blog site routinely for some recent submit.
I think that is an interesting point, it made me assume a bit. Thank you for sparking my pondering cap. From time to time I get so much in a rut that I simply really feel like a record.
I’ve read through 10 different blogs on this and this is easily the best. Thanks!