What will happen regarding the termination a motor vehicle installment sales contract?
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What will happen regarding the termination a motor vehicle installment sales contract?
I signed a motor vehicle retail installment sales contract couple of weeks
ago. I made a down payment of $5000 as it stated in the contract. Now I
want to terminate this contract and return the motor vehicle. Can I take
back my down payment, at least part of it?
Asked on November 4, 2018 under Business Law, Illinois
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 5 years ago | Contributor
No, you may not. Once you sign the contract, your are obligated for the full amount. There is no legal right to cancel early or return the vehicle. The dealership (or whomever sold you the vehicle) is under no obligation to take it back; they can refuse your attempted return of the vehicle and hold you to the contract. Even if they choose to take the truck back--which would be voluntary on their part, since they don't have to do that--they would then sell the vehicle at auction and apply whatever they receive they receive to the full purchase price and hold you liable for the rest. Example: you purchased the vehicle for $30k (full purchase price you agreed to pay). They agree to take it back and sell it for $20k (combination of depreciation and things always sell for less at such auctions, because whomever buys it bids a low-enough amount they can sell it for more and make a profit). That $20k, plus the $5k you already paid, is $25k. A $30k purcahse price less $25k in total proceeds, leave another $5k; in this example, you'd owe them another $5,000.
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