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Hello and thank you for contacting us. This is Dwayne B. and I’m an expert here and looking forward to assisting you today.
I read your facts, is there a specific question with which I could assist?
There is nothing in your facts to suggest anything was done that was illegal. The part about repo'ing the car, auctioning it and him being responsible for any deficiency is the way the system works in Texas, so that's accurate.
The only thing I see that raises a question is as to whether he is disabled to the point that he couldn't adequately negotiate a deal or handle his own matters. The fact that he i a disabled veteran, the fact that he has medical issues, etc. aren't relevant unless they rise to the level of him being "incompetent" or "incapacitated" and unable to take care of his own financial affairs.
If that's the case, and he is incompetent, then someone would need to hire a lawyer for him and they could then file a lawsuit seeking to have the sale voided.
There is no three day rule in Texas as to car sales. The only exception is if the car sale was made somewhere other than the dealer's place of business (such as an auto show).
The Attorney General has a page on their website which discusses this and I'd be glad to try and find it for you if you like but the "3 day rules" is very limited in Texas and usually only applies to door to door sales.
It looks like they have reworded the page a little but if you read it then it is clear that a vehicle sold by a dealer on their lot is not covered. The web page is at https://texasattorneygeneral.gov/cpd/the-3-day-right-to-cancel-a-purchase
If your question has been answered then I'd offer my best wishes to you and ask that you please not forget to leave a Positive Rating so I receive credit for my work. Of course, please feel free to ask any follow up questions in this thread. I want to be sure that all of your questions are answered.
The statute themselves are at http://www.statutes.legis.state.tx.us/SOTWDocs/BC/htm/BC.601.htm
You're very welcome and best wishes to your father in law and yourself.
There should be a location there on the page that has stars or it may just ask if you want to accept the answer.