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Loren
Loren, Lawyer
Category: Consumer Protection Law
Satisfied Customers: 20544
Experience:  30 years experience in general legal matters.
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My nephew received a 10-day letter from a car dealership canceling

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My nephew received a 10-day letter from a car dealership canceling the contract. So, he purchased another vehicle. He now wants to return the first vehicle, but the dealership is insisting he can't because he didn't sing a rescission contract? Isn't the 10-day letter sufficient for him to just return the car?
Submitted: 1 year ago.
Category: Consumer Protection Law
Expert:  Ely replied 1 year ago.
Hello friend. My name is XXXXX XXXXX welcome to JustAnswer. Please note: (1) this is general information only, not legal advice, and, (2) there may be a slight delay between your follow ups and my replies.

Can you please clarify what the 10-day letter actually states? Does it give him 10 days to cancel, or, does it CANCEL the original purchase all-together (i.e. a release from the contract)? Did he ask for this letter?

This is not an answer, but an Information Request. I need this information to answer your question. Please reply, so I can answer your question. Thank you in advance.
Expert:  Loren replied 1 year ago.
Thank you for using JustAnswer. I am JudgeLaw and I will do whatever I can to answer your question and provide you excellent service.

I am sorry to hear of your dilemma. I realize how frustrating this is for you, but I believe I have information which you will find helpful.

Your options are not as limited as you may think in this situation. This situation is created when a dealer performs a "spot delivery," which is a sometimes risky venture on everyone's part. Essentially, the dealer obtains your credit report (with your permission), and you and the dealer agree to terms for a vehicle that you want to purchase. The dealer, wanting desperately to sell you a car, will often just delivery the vehicle and "guess" at the finance rate. If the dealer gets it wrong and the lender requires different terms (which might include more money down, a higher interest rate, and/or a shorter term loan), then they guessed wrong and have to give you the bad news. The letter you received in the mail is referred to in the industry as a "10-day letter," because a provision in the letter allows the dealer to rescind the contract within 10 days if they are unable to obtain financing on your behalf. When you receive this letter or phone call, you may be getting set up for the "yo-yo contract," which is a type fraud where the dealer delivered the vehicle at terms that you thought were favorable but the dealer acted in bad faith. In this instance, the dealer may have already sold the vehicle you traded in., and then you get the call telling you they need another $1,000 or more down in order to get you financed. Now you are stuck - either agree to whatever the dealer offers or return the car and be without transportation because they sold the car you traded in. This type of consumer fraud should be reported to the California Attorney General. Additionally, you may find that retaining local counsel to threaten the dealership with litigation will get the dealership to back down.

It is my privilege to assist you. Let me know if you need further information.  I hope I have helped you beyond your expectations in the service I have provided to you.  I am here for you.

Please remember to rate my answer when our communication is completed so I will be compensated for my time in providing you with the information you requested.

If you feel the need to provide a low rating, please stop and reply to me via the REPLY button with whatever issue or clarification you may need. I will happily answer your follow-up questions and assist you until I am able to explain the answer to your satisfaction. Please also remember that I cannot control whether the law is favorable to your situation, so please do not penalize me for having to deliver bad news.

Thank you.

JudgeLaw
Customer: replied 1 year ago.

I do have a follow-up question. My nephew is a 22-year old college student and not very business savvy. I told him to return to Santa Barbara Toyota, talk to the dealership manager, and simply attempt to return the vehicle based on the fact he received their 10-day letter. Thus far, the dealership has threatened to blemish his credit and report the car as a repossession if he returned it. I just want to know, is he within his legal rights to return the car this morning based on the 10-day letter? Is it true that he can not so unless he signs a rescission contract as claimed by their finance department?

Expert:  Loren replied 1 year ago.
There are two different issues in play within your question. California law allows a car purchaser to also purchase the option to be able to rescind the contract. This is a separate option which a car buyer would pay for at the time of purchase. That is the recission contract which the dealer keeps referring to that, apparently, your nephew did not purchase.

The recission the dealer gave has to do with the fact, probably, that the financing was not approved after he took possession of the car. It is a provision in the contract which may be exercised by the dealer, but the way it is being done appears to be fraudulent.

That is why I am suggesting that your nephew involve an attorney. The dealership is going to run rough shod over him because they can. If he has a lawyer, his rights will be better protected and the dealer will be more intimidated into treating your nephew correctly and according to law. Right now, they are counting on him just going away.

I hope this clarifies my answer.

Thank you.

JudgeLaw
Loren, Lawyer
Satisfied Customers: 20544
Experience: 30 years experience in general legal matters.
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