Can a car dealer cash your down payment check with no signed paperwork?

I currently am in the process of buying a car. I have the vehicle but am waiting for the dealer finance dept to send me a revised version of the contract with no extended warranty. I have not signed any paperwork of any kind. Can I still return the vehicle if needed and I just found out they have already cashed my down payment check. Can they legally do this and if not what can I do about it?

Asked on November 3, 2011 under General Practice, Texas


B.H.F., Member, Texas State Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Much of what you can and cannot do depends on what type of preliminary paperwork you have signed.  When you write someone a check, they can always deposit the check--because the check by the very nature of the instrument allows them to do so.  However, if the check is contingent upon some other performance-- like a contract being agreed to and signed-- then you would be entitled to a refund of the down payment check.  You seem to be stressing, rightfully so, over the check being cashed.  However, the greater stress point should be the contract.  Many people have signed documents that purport to be authorizations for credit checks, when in fact they were signing purchase contracts.  It's a deceptive trade practice used by some car dealers.  This may or may not be the situation with the dealer that you are working with.  But you can ask to see copies of all of your paperwork to this point-- and that will give you a better idea of what is going on with your purchase.  If you have not signed anything, then you should be able to return the car and back out of the deal.  Before you do anything, though, ask to see your paperwork first so that you don't miss any fine print details that may be applicable to your situation.  If you know that you want out of the deal, and they have not cashed your check, consider giving them written notice that you do not want to purchase the car and then place a stop-payment on the check to insure they cannot cash it, especially if they are refusing to return the check.

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