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Dwayne B.
Dwayne B., Lawyer
Category: Consumer Protection Law
Satisfied Customers: 33926
Experience:  Practicing for over 20 years and handled many cases and trials for consumers.
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Can a dealership keep your down payment if your loan wasn't

Customer Question

Can a dealership keep your down payment if your loan wasn't finalized and you don't have the car in your possession and it was less than one week?
Submitted: 1 year ago.
Category: Consumer Protection Law
Expert:  Dwayne B. replied 1 year ago.

Hello and thank you for contacting us. This is Dwayne B. and I’m an expert here and looking forward to assisting you today. If at any point any of my answers aren’t clear please don’t hesitate to ask for clarification. Also, I can only answer the questions you specifically ask and based on the facts that you give so please be sure that you ask the questions you want to ask and provide all necessary facts.

Were you going through the dealership for financing?

Customer: replied 1 year ago.
I decided I didn't want the vehicle after it ran hot within the first day.I did sign the bill of sale but I didn't get the loan finalized because something is wrong with the vehicle. The company insist on keeping my entire 2700 downpayment but they have had the car in their possession for 7 days.I have only had it in mines for 4days.I was going through them but the finance company did not finalize my loan because I informed them I was not going to get the car because something was wrong with it.
Expert:  Dwayne B. replied 1 year ago.

In a case like that the dealership has at least an argument that you are still responsible to pay them the entire amount and take the vehicle since the financing wasn't completed due to your actions. That is different than a situation where the financing just failed to get approved or failed to get approved at the rate you were promised.

In the facts as you gave them the dealership can argue that the contract was completed other than your final payment and that you breached the contract by stopping the financing. Using their argument they actually would claim they are entitled to the entire value of the vehicle, not just the down payment amount.

Your argument will have to be that the contract was never completed and therefore it couldn't have been breached and they have to give you back the money you gave the car back to them.

This is one of those issues where there are arguments both way and no clear answer on what a judge will rule because it is a judgment call on the part of the judge. Some will say that the contract was completed and you are in breach and some will say it was not.

The dealership is unlikely to just voluntarily give you back the money since they do at least have an argument so what you should do at this point is hire a local lawyer to send them a demand letter and see what happens. I suspect you're going to have to sue them to get the money back.