Can a signed auto contract be canceled by the auto dealer after the deal is supposed to be complete?

UPDATED: Mar 7, 2012

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Can a signed auto contract be canceled by the auto dealer after the deal is supposed to be complete?

I purchased a used car at an auto dealer, after driving for 3 weeks I get a call from the salesmen saying that he was unable to get financing and now I need to return the car. I looked over the contract and there is no contingency clause. I called the sales person back and suddenly they have found someone to finance me; they still have my trade for sale but I’m uneasy about signing a new contract.

Asked on March 7, 2012 under General Practice, Tennessee


MD, Member, California Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Re-review your contract. You must have signed a spot-delivery form. If you signed a spot delivery form, that means the company can take your car back if it could not find financing for you but must give you back the car you traded in (if applicable) and / or any monies you paid as a down payment. It basically makes everyone whole and allows everyone to go back to zero. If the company has found new financing, you should review it and see if you prefer it or if you should file a complaint with the state attorney general about this transaction.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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