What is my right to the returnof adownpayment that I gave to an auto dealership ifI submitted fraudulent financial infornationand wasturned down for a loan?

UPDATED: Aug 13, 2011

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What is my right to the returnof adownpayment that I gave to an auto dealership ifI submitted fraudulent financial infornationand wasturned down for a loan?

I went to a ma and pop to dealership to purchase a car and I gave them a $2000 down payment. However, I provided false pay check stubs to get the loan approved. The fiance company did not approve me due to the false check stubs so no money was exchanged between the dealership and the finance company. Now the dealership will not return my down payment saying that it didn’t have to because I submitted false documentation. Can the dealership do this?

Asked on August 13, 2011 Texas


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

That is correct; the dealership does not need to return the deposit when the reason the deal falls through is your own wrongdoing, just as they would not have to return it if the reason the deal fell through was you changed your mind. Unless specified otherwise in the contract or agreement--i.e. unless this dealership specifically stated that you could get a refund or cancel the deal for *any* reason--deposits like this are only returned if the deal falls through do to something the dealership did. However, in this case, you breached the agreement by using false information, and since you breached the agreement, you cannot recover the deposit, unfortunately. Try negotiating with the dealership; maybe they will allow you to apply the deposit for a car which you could afford based on your income, but note that any agreement would be purely voluntary on their part.

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