How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Lucy, Esq. Your Own Question
Lucy, Esq.
Lucy, Esq., Lawyer
Category: Consumer Protection Law
Satisfied Customers: 29579
Experience:  Lawyer
Type Your Consumer Protection Law Question Here...
Lucy, Esq. is online now
A new question is answered every 9 seconds

I purchased a used car from a dealer. i made a down payment

Customer Question

i purchased a used car from a dealer. i made a down payment of $3,900 and the dealer told me that i got approved for the loan and congratulated me for the car. Then, 5 days later the dealer called me and say that the loan was declined. and i have to return the car. i returned the car and he told me he will mail me a check of 2,800 and he will keep $1,000 for depreciation because i drove the car and for financing fees.
i just think it is unfair to pay 1,000 for nothing. And it wasn't my fault. also i had to miss work to drive 5 hours from and to the dealer couple times.
is the dealer right in this situation and i have to pay him 1,000?? if no. can i sue them? and what documents will i need?
thank you
Submitted: 5 months ago.
Category: Consumer Protection Law
Expert:  Lucy, Esq. replied 5 months ago.


I'm Lucy, and I'd be happy to answer your questions today. I'm sorry to hear that this happened.

The dealer is wrong. If your contract was contingent upon you obtaining financing for the vehicle, then the contract failed when the loan was declined - and that means each party must be put into the position they'd be in if the contract hadn't occurred. You get your money back, they get the car back. They could charge you a reasonable fee for use of the car - but that's typically about $15/day. Charging $1,000 for using a used car for a week is ridiculous and excessive. There shouldn't be any financing fees if the loan was denied. People don't pay to get declined for loans.

You can sue in Small Claims Court for the money they're keeping, plus your filing fees. You'll need a copy of the original contract, a copy of the cancelled check showing what you paid, and any documentation that shows you were declined for the loan. You do not need a lawyer. Here is more information on the process:

Another option is to send a demand letter, via certified mail, letting the dealer know that you'll be suing if they do not return the rest of your money. If there is someone higher up at the dealership, you could try talking to the owner or manager to see if they'll give you the extra $1,000 to avoid the bad press of a lawsuit. But you're allowed to go to court and sue if they won't give you the money back.

If you have any questions or concerns about my response, please reply WITHOUT RATING. It's important that you are 100% satisfied with my courtesy and professionalism. Otherwise, please rate my service positively so I am paid for the time I spend answering questions. If you are on a mobile device, you may need to scroll to the right. There is no charge for follow-up questions. Thank you.

Expert:  Lucy, Esq. replied 5 months ago.

Did you have any other questions about this?

Related Consumer Protection Law Questions