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Category: Consumer Protection Law
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Experience:  Consumer Lawyer
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I live in California. I put a down payment (credit card) on

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I live in California. I put a down payment (credit card) on a used car 5 days ago and signed a purchase contract, but did not take possession of the vehicle. As the car was not detailed and ready to go, I told the independent used car dealer I would pick up the vehicle in 7 days (when I returned to that city). Since then I have had second thoughts about purchasing the vehicle. Since I did not take possession of the vehicle, can I cancel the contract? And what about the credit card down payment? Can I have that refunded or is it going to be a problem?

LADY LAWYER : Hello! I am happy to provide you with legal information today! Please give me a moment to review your question and to answer you.
LADY LAWYER : The deal is not complete until you take possession of the vehicle. The dealer might try and tell you everything and then some to convince you otherwise and may even threaten you with a lawsuit, but the fact is, the contract is not complete until "the tail pipe leaves the driveway."
LADY LAWYER : If the dealer will not refund the money you paid, you should be able to receive a reversal from the bank. If the bank refuses, you can sue the dealer for a return of the deposit.
LADY LAWYER : If you have any further questions about this, please just let me know. I am happy to keep assisting you. If you do not have any further questions at this time, would you kindly leave me a positive rating for the service I have provided you today? This will cost you nothing further to do, but it is the only way that the site will pay me for my time spent with you. Thank you so much!

So I am not legally bound by the contract? Do I just call the dealer and tell them I no longer want the car? What about the credit card down payment? Should I contact my credit card company and dispute the charge?

LADY LAWYER : I am not sure if you saw all my responses, but that is correct. You are not bound by the contract until you take possession. Yes, you call the dealer and tell them you spoke to a lawyer and know that you are not liable and have changed your mind and want a return of your funds.
LADY LAWYER : And then if they do not return the money, yes, you would seek a reversal with your CC company.
LADY LAWYER : You can also file a claim with the CA attorney General before you sue as they may mediate your claim so that you never would have to sue.
LADY LAWYER : Can I answer any further questions for you at this time?

Thank you. No I did not see all of your previous response (I had to scroll further). Since it has been almost 6 days, if the dealer has already started and/or completed DMV paperwork for transfer of title, will I be liable for any fees?


Is the "until the tailpipe leaves the driveway" rule listed in any California motor vehicle code or some other reference that I can refer to?

LADY LAWYER : No, it is based in common law and contract law. The dealer knows this is the law, but they will try telling you everything they can to make you think otherwise.
LADY LAWYER : If the dealer is out any fees, yes, you would be responsible for them. But they haven't submitted anything yet so you don't have to worry about that.

Thank you for your help. I will call the dealer tomorrow and tell them I no longer want the car and to refund my deposit.

LADY LAWYER : Very good. And if you need more help with this, just sign back onto the site, click on the "My Questions" tab and then come back and ask me anything you need to.
LADY LAWYER : happy to continue to help at no additional charge.

Thank you.

LADY LAWYER : Sure! If you would kindly rate my service before you go, I would appreciate it. You will be able to still ask follow up questions.
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