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CalAttorney2, Lawyer
Category: Consumer Protection Law
Satisfied Customers: 10244
Experience:  I am a civil litigation attorney representing individuals and businesses.
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Purchased a vehicle in Californa, put $1500 down. Dealer arranged

Customer Question

Purchased a vehicle in Californa, put $1500 down. Dealer arranged financing through a local bank, was given payment info etc, everything seemed fine. A month later the car disappears, the dealer repossessed it. Apparently the financing fell through that the dealer was working on with a local lender. The company holding the car would not respond neither will the dealer. My property and the $1500 are gone.
What should I do?
Submitted: 2 years ago.
Category: Consumer Protection Law
Customer: replied 2 years ago.
This was 2 weeks ago from 7/17/2015
Expert:  CalAttorney2 replied 2 years ago.
This is referred to as "yo yo financing" - it is illegal. The dealership will sell a vehicle to the consumer under specific contract terms and conditions, then use a pretense (such as the interest rate is no longer available, the credit check came back different, or some other excuse) to threaten the customer into either refinancing the auto under less favorable terms, or into returning the auto and purchasing a more expensive one. This is a form of fraud. The terms of the contract that you agreed to at the time that you purchased the vehicle are controlling, and both you and the dealer are bound by those terms. If the dealership cannot find a lender to take over the loan, they must service it themselves. You can (should) report this to the State Attorney General's Office, Consumer Complaints/Protection division (online reporting) so that the attorney general can investigate and take criminal or administrative action against the dealership. California AG: Also contact local law enforcement (police or your District Attorney), they may state that this is a "civil matter" but some departments will actually help you (particularly DA's offices). If law enforcement is unwilling to help you, you will then need to file a civil suit against the dealer (fortunately CA has a very high small claims limit, and the California Courts have an extremely helpful self help guide for filing a small claims suit). You can find information (and forms) to help you file here: