down to the wire

[Jacqueline Luthringer]

Jurisdiction

California

On 8/12/23 I purchased a used truck from a dealer in Sacramento, CA. I signed all paperwork and forms and took possession of the truck. On 8/24/23 my sister signed for a registered letter from the dealership. When I got home I opened the letter. It was a cancellation of contract. I know a dealer has 10 days to perform a cancellation of contract.The 10th day is 10/22/23 since the purchase date is 8/12/23. My question is this. If the cancellation is to be 10 days, how can I be notified of cancellation when the letter was sent on the tenth day. I wasn't notified of cancellation until the 12th day. Clearly two days after the legal requirement of notification. I have not talked to anyone as I wanted to find out what I can do. I did call the lender to find out if they cancelled anything. they said I should talk to the dealer because they didn't cancel anything.Even with that being said I believe that the dealer was wrong about sending that letter on 8/22/23 because I was unable to be notified by the tenth day. Please help me to understand what to do.

 

[army judge]

Please help me to understand what to do.

You should IMMEDIATELY, as in WITHOUT hesitation or further delay, make arrangements to RETURN the vehicle to the dealer.

You might also reach out to an attorney or the CA AG for real legal guidance and assistance.


Contact Us


If you fail to do so, you might end up being criminally charged with motor vehicle theft or a serious financial fraud crime.

Dealer's Right to Demand Return
The standard California car contract only allows the dealer 10 days to find financing. If the dealer cannot honor your agreement, they must notify you that they are cancelling the contract. You must return the vehicle to the dealer. The only thing the dealer can do is take the car back, refund you 100% of your money, and return your trade-in vehicle, if you had one. The dealer cannot charge you for mileage. Sometimes a dealer will try to blame you, telling you that your bad credit is to blame, or that you must sign a new contract, or pay more money down, or pay a higher payment. These are all lies. Worse, dealers will threaten to keep some or all of your down payment, or to put a repossession on your credit. This is against the law.

0-10 Days

Dealers regularly sell vehicles without first getting consumers approved for a loan. This is called a "spot delivery." In order to protect themselves, dealers insert fine print on the back of the contract that allows them to demand return of the vehicle if they cannot find financing. However, this right is limited.

Over 10 Days

After 10 days, the dealer cannot demand that you return the vehicle, unless you provided incorrect information on your credit application.

****::::****@@@@%%%%@@@@

Cooling-Off Periods | 10-Day Rule — Glassey | Smith
!!!!!!!!!!!!!!!!!!!!!!!!


Before You Walk Onto a Car Lot, Beware Yo-Yo Financing

 

[army judge]

The Federal Trade Commission is drafting new rules for car dealers in an effort crack down on so called a "yo-yo" sales that can entrap people in bad deals.

A MARTÍNEZ, HOST:

Cars are the second-biggest purchase most Americans ever make. But some car dealers engage in a practice called a yo-yo car sale that can entrap people in bad deals. Right now, the Federal Trade Commission is drafting new rules for car dealers, so it has a chance to crack down. NPR's Chris Arnold has been investigating all this. He joins us now. So yo, Chris, what is a yo-yo car sale?

CHRIS ARNOLD, BYLINE: (Laughter) Nice one. A yo-yo car sale is called that because after you buy a car, the dealer pulls you back like a yo-yo and changes the deal. And this can happen when you finance a car through the dealership. And here's how it works. So when you buy a car, you sign all the paperwork. The dealer hands you the keys. And you drive off. And you know that feeling when you're like, this is my car now, you know? Wow. You've probably felt that.

MARTÍNEZ: Oh, yeah. I mean, it's an awesome feeling because you got something new, and it's yours.

ARNOLD: Right? So that is how Kaitlyn Arland (ph) felt, too. She's a car buyer that I spoke to. And she's an Army service member stationed at Fort Riley in Kansas. She was 19 years old, and she bought a new, little Kia sedan.

KAITLYN ARLAND: Oh, I was so excited 'cause I remember asking the gentleman, like, I'm good to go? And he was like, you're good to go. How do you feel? And I was like, I feel great.

ARNOLD: But a lot of the time, in the fine print, car dealers reserve the right to cancel the sale if the dealer has trouble with the car loan financing, even after the fact on their end. And this can be days, even weeks later after you drive off the lot, and you've shown the car to your friends and your family. And this happened to Arland. The dealer called her back and said, oh, the financing has fallen through. You need to come back and make a bigger down payment. They wanted $2,000.

ARLAND: I straight up told them, I'm sorry. I don't have $2,000. They proceeded to ask me if I had a credit card that I could pay it on. And I said, I'm sorry. I'm not comfortable paying $2,000 on my credit card. Financially, like, I can't do it. I'm sorry.

ARNOLD: Sometimes, at this point, the dealer will tell you, you know, oh, it's too late to get your trade-in car back. We already sold it. So people can end up really over a barrel and get pushed into worse deals.

MARTÍNEZ: Oh, my God. People make plans when they got a new car. I mean, they structure their lives based on the new cars. OK. So what happens, though, if the car buyer pushes back and says, basically, look. Hey, you sold me the car, and I'm not going to bring it back?

ARNOLD: Well, people try that, as you might imagine. But there can be some pretty bad outcomes. The dealer will often just repossess the car. And I talked to two different people where the dealership actually reported the car stolen. And that's what happened to Kaitlyn Arland.

ARLAND: So the brigade commander reached out to my commander and said that the dealership said that I had stolen this car. I was already new to the unit, and I had just found out I was pregnant. So I was already super worried about what everyone was thinking about me. And I was bawling my eyes out in front of my entire unit.

ARNOLD: And she was worried this was going to mess up her career in the military. And after all of that, the dealer took the car back, and she didn't get a car.

MARTÍNEZ: Wow. Now, I know you dug into this, Chris, to find out how often it happens. And what'd you find?

ARNOLD: Right. So we surveyed consumer attorneys around the country who deal with auto cases. And just a few dozen attorneys say that they've gotten calls from nearly 900 car buyers in just the past year. So this appears to be happening pretty regularly. And they said half the time, the car buyer is told it's too late to get their trade-in vehicle back, and people end up feeling really stuck.

MARTÍNEZ: What are the car dealers saying?

ARNOLD: Some dealers say the current system works really well. Customers can drive off in a car right away, which they like, even if the financing's not finalized on the dealer's end. The industry says changing the rules would cause delays. And they say dealers don't want to have to call the customer back and cancel the sale or change the deal. Consumer attorneys say, though, that some dealers use the current system to take advantage of car buyers and sometimes with really bad outcomes. We talked to one car buyer who actually got arrested when the car was reported stolen and spent two nights in jail.

MARTÍNEZ: So, Chris, is there anything the FTC can actually do to stop that from happening?

ARNOLD: Well, it appears so. We looked at the state of Maryland, which passed a law in 2015. And we got complaint data from the AG's office and found that complaints fell by half after the law was passed. So it appears to be really making a difference.

MARTÍNEZ: That's NPR's Chris Arnold. Chris, thanks a lot.

ARNOLD: Thanks, A.






https://www.npr.org/2023/02/07/1155...come-entrapped-in-whats-known-as-a-yo-yo-sale
............ :::::::::::://////))))))

 

[army judge]

What is a "Yo-Yo" Sale?
Believe it or not, it's quite common for California car dealerships to sell or lease a vehicle to a consumer who the dealership believes will not be approved for financing. In these cases, car dealers usually assure their customers that approval is "guaranteed" or has already occurred, even though they know otherwise. Dishonest car salesmen who engage in this practice do it because there is a clause in virtually every California auto purchase or lease contract which states that the dealership has up to ten days to cancel and rescind the deal if it is unable to find financing. This type of devious sales practice is referred to in the automobile industry as a "yo-yo" sale.

The purpose of a yo-yo sale is to convince a customer to buy or lease a vehicle even though they can't afford the credit terms. The way it works is that the dealership tells the customer that the financing has been "approved," the customer signs the contract, and then takes the vehicle home and shows it to his or her family and friends. Dealers know from experience that people quickly become attached to new cars, and that when the dealer calls in ten days to cancel the transaction the consumer is more likely to want to come in and sign a new second contract – which will be on more expensive credit terms – than to want to return the vehicle and then explain to his or her family and friends that the car had to be returned because of the consumer's poor credit. Yo-Yo car sales raise (at least) six potential legal issues.

Backdating Vehicle Purchase or Lease Contracts
Dealers will sometimes illegally backdate the second purchase contract to the date the first contract was signed. This is illegal under both state and federal law, and results in the consumer paying interest on the transaction that he has no legal obligation to pay. Federal and state financial disclosure laws treat this as a serious legal violation. Backdating a vehicle purchase or lease contract is usually a sufficient basis, by itself, for permitting the consumer to later cancel the deal, return the vehicle, and get their money back.

Consumers should bear in mind that applicable laws may in some instances require that the consumer act promptly to rescind the transaction if backdating is the basis for the deal's cancelation. So if you discover that your motor vehicle purchase or lease contract has been backdated, you should contact an attorney to discuss your legal rights at your first reasonable opportunity.

Attempting to Rescind a Deal AFTER the Ten Day Deadline Has Expired
Sometimes car dealers who engage in this practice make a mistake, and fail to cancel the deal prior to the ten-day deadline. After ten days, the transaction can no longer be canceled by the dealer, unless the consumer also agrees to cancel the deal. In these situations, it is not uncommon for dealers to falsely threaten customers. Some threaten repossession, some threaten to "call the cops," and some threaten to ruin the customer's credit rating. All of these threats are baseless. The dealer can do none of these. The contract was signed, the period for canceling it expired, so, as car dealers are fond of saying "a deal is a deal."

One extremely important fact of which consumers should be aware is that in these situations car dealers frequently send a letter to the consumer that is dated on the tenth day after the transaction (i.e., within the cancelation deadline) but which is actually mailed later, after the deadline has expired. IF YOU RECEIVE A LETTER LIKE THIS, IT IS CRITICALLY IMPORTANT THAT YOU KEEP THE ENVELOPE IN WHICH THE LETTER WAS SENT. The post-mark on the envelope can prove that the dealer falsified the date on the letter.

Finally, because consumers (with the assistance of California lemon law attorneys, like the author of this Web site) started noticing the post-marks and keeping the envelopes in which these letters were sent, many dealerships have started using their own postage meters to backdate the post mark by a few days in order to claim that the dealer complied with the deadline. These situations present significantly greater problems in proving that the dealer missed the deadline, but it is not necessarily impossible to do so. Contact an experienced California lemon law attorney immediately if you receive a backdated cancelation letter to discuss your legal rights.

3. Threatening Customers Who Want to Return the Vehicle Instead of Signing a Second Contract
Some car dealers outright lie to their customers and tell them that they HAVE TO come back and sign a second contract, rather than returning the vehicle if the customer chooses. Our law firm has heard reports of car salesman threatening everything from "not following through on the deal will ruin your credit" to "since you took the vehicle without paying for it we will call the cops and have you arrested." Of course, neither is even close to true. If the dealership cancels a transaction, then you have done nothing wrong, and always have the option of returning the vehicle and canceling the deal.

4. Refusing to Refund the Entire Down Payment
Another type of illegal conduct occurs when the dealer tells the customer that he or she is not entitled to a full refund of their down payment. Some dealers claim that there is a "re-stocking fee" or that they cannot refund the sales tax or the price of optional equipment purchased with the vehicle. Again, none of these are true. California law clearly states that if a car dealer rescinds a vehicle transaction because of an inability to obtain financing, then the dealer must repay ALL amounts that the consumer paid, including sales tax and any optional items that were included in the purchase contract. The dealer is not even allowed to impose any charge for the mileage that the customer put on the vehicle – no matter how many miles were driven.

5. Not Returning & Refusing to Pay Required Compensation for the Trade-In Vehicle
Sometimes car dealerships cancel a deal after they have already sold the customers trade-in vehicle to someone else. Unfortunately, California's Automobile Sales Finance Act (California Civil Code Section 2981 et seq.) currently allows them to do this. However, if a dealer cancels a deal after disposing of the customer's trade-in vehicle, then the Automobile Sales Finance Act also specifies that the dealership must compensate the customer for the trade-in vehicle by paying the GREATER of the trade-in vehicle's fair market value or the trade-in vehicle's value as stated on the purchase contract.

This can be important because in some cases (in an attempt to get the deal financed) dealer's structure transactions by either over-valuing or under-valuing the trade-in vehicle. So, if they over-valued the trade-in on the purchase contract the customer should not accept less. Similarly, if the trade-in vehicle was under-valued on the purchase contract the customer should not accept less than the vehicle's fair market value. Consumers should refer to vehicle valuation services like Kelley Blue Book to determine the market value of their vehicle prior to accepting any payment from the dealer.

6. Dealer Knew Customer Had No Real Chance of Getting Financed
In some instances, a "yo-yo" sale itself may be illegal under California consumer protections statutes such as the Consumers Legal Remedies Act (California Civil Code Section 1750 et seq.) and the Unfair Competition Law (California Business & Professions Code Section 17200 et seq.). In order to make it worthwhile for a consumer to proceed with this type of claim, a consumer would essentially need to be able to prove that: (i) the "yo-yo" sale caused monetary damage to the customer in some manner; and (ii) that the dealer had a specific reason to know that financing would be denied (e.g., poor credit score, insufficient income, etc.).

In any event, if you been the victim of a yo-yo transaction, and it resulted in monetary damage, then you should contact an experience California lemon law attorney for advice.

"Yo-Yo" Car and Truck Sales - Vachon Law Firm
//////------______\\\\\\******++++++

 

[doucar]

On 8/12/23 I purchased a used truck from a dealer in Sacramento, CA. I signed all paperwork and forms and took possession of the truck. On 8/24/23 my sister signed for a registered letter from the dealership. When I got home I opened the letter. It was a cancellation of contract. I know a dealer has 10 days to perform a cancellation of contract.The 10th day is 10/22/23 since the purchase date is 8/12/23. My question is this. If the cancellation is to be 10 days, how can I be notified of cancellation when the letter was sent on the tenth day. I wasn't notified of cancellation until the 12th day. Clearly two days after the legal requirement of notification. I have not talked to anyone as I wanted to find out what I can do. I did call the lender to find out if they cancelled anything. they said I should talk to the dealer because they didn't cancel anything.Even with that being said I believe that the dealer was wrong about sending that letter on 8/22/23 because I was unable to be notified by the tenth day. Please help me to understand what to do.

Back to your original question, Calfornia, like most other states, has the mail box rule. Notice is timely if it is deposited in the mail box by the deadline.

 

[adjusterjack]

I believe that the dealer was wrong about sending that letter on 8/22/23 because I was unable to be notified by the tenth day.

Here is the CA statute that explains the "mailbox rule" referred to by Doucar.

https://codes.findlaw.com/ca/code-of-civil-procedure/ccp-sect-1013/

The date of mailing is the effective notice.

Please help me to understand what to do.

Well, if you want to keep the truck, get yourself a loan for the full contract price and bring a cashier's check for that amount to the dealer ASAP.

Otherwise, return the truck immediately and get your money back.