Do I have a case if I sue an auto dealer for not returning a deposit due to my canceling the sales contract?

UPDATED: Aug 2, 2011

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Do I have a case if I sue an auto dealer for not returning a deposit due to my canceling the sales contract?

I purchased and vehicle and then I got buyer’s remorse. So I asked the dealer to cancel the contract. They said no and then I told the finance company that I wouldn’t be able to pay. The dealer then called and left a voicemail stating that they were going to cancel the contract and give me a refund. I then called back and we agreed that I would bring the vehicle back the next morning. They repossessed the car the same night and stated it was because I didn’t pay the rest of the deferred downpayment (deferred payment was not in contract). They are refusing to give my $2000 back.

Asked on August 2, 2011 California


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

First, you need to be aware that as a general matter, there is no right to "buyer's remorse": once you agree to the purchase (e.g. sign the contract or purchase agreement), you are obligated to go through with the transaction. If you choose not to, the dealer is under no obligation to return your deposit, but rather may keep it.

That said, if there was an agreement between you and the dealer that you would return the car, the sale would be voided, and you'd get that money back, that agreement is enforceable; if necessary, you could sue to make it happen. The traps, however, are:

1) If it was an oral or verbal agreement (e.g. a telephone call), it can be very difficult to prove the existence or terms of the agreement, especially if the other side has a different recollection or story.

2) In line with the above, since the norm would be that they don't have to return the deposit (and they are holding their money), to get the money back, you will have to sue them--which means you'll incur the cost of a lawsuit (though you may be able to represent yourself in small claims court) and also will have the burden of proof--i.e. you will have to prove by a preponderance of the evidence the existence and terms of the agreement and your entitlement to the money.

3) Even if there was an agreement, if there was some term of it which you can be shown to have violated, they would not need to return the money to you.

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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