Dealer Wants Car Back - Wants More Money Arkadelphia AR
Siloam Springs, AR
Dealer Wants Car Back - Wants More Money
It happens every day. You buy or lease a car from a dealer. He calls you a few days or a couple of weeks later and wants his car back, or asks you to sign a new contract with higher payments. Is this a scam? Is it legal?
First, let's understand some fundamentals of car financing. Car dealers don't finance or lease cars. When you sign a contract to buy with a loan, or to lease, the dealer attempts to find a finance company or bank that will approve you under the terms you agreed to in your contract. Somewhere in your contract or in a separate document, often called a bailment agreement, this condition is spelled out.
Essentially, it says that you agree to let the dealer arrange your car financing on your behalf, and that, if he can't find a finance company or bank to approve you and accept your loan or lease, then the deal isn't final. In this case, you will either be asked to return your car, get a co-signer, or sign a new contract for new terms that are acceptable to a finance company the dealer has contacted. Most likely, the option to return your vehicle won't be mentioned because the dealer does not want to lose this deal.
This is perfectly logical since the dealer wants to paid for his car and if a finance company can't be found who will accept the deal and pay him, the car still belongs to the dealer.
We often get emails from consumers who are in this situation and they frequently ask if they can simply keep the car and refuse to sign a n...