The dealership has just demanded that I immediately return the car I just bought back to them because they couldn't get me financed. Is that legal?

The short answer is, yes. If you took delivery of the car with the understanding that the sale was being financed, the dealer has the legal right to demand the car back if the dealership has been unable to secure financing for you at the agreed terms. In such a case the contract is deemed to be automatically cancelled, and both the seller and purchaser are obligated to return all consideration given to the other. This means the dealer must return your down payment, and you must return the car. In many cases, the dealer may attempt to convince you to change the contract terms, perhaps increasing the down payment or interest rate, or maybe changing the length of the contract. There is however no obligation to do this. Finally, if part of your down payment was a trade-in, your vehicle must be returned, or if already sold (as sometimes happens), the greater of the fair market value or trade-in value, must be returned.

Call Smith and Garg today at 1.877.517.4275 or complete our contact form and let us assist you with your consumer defense needs.