Legal Question in Consumer Law in California

I purchased a car from a used car dealer based on a pre-approval from my credit union. the credit union gave a verbal approval to the car dealer and the car dealer sold us a car. When I went to the credit union to sign loan documents, I was advised the loan was not approved. I have had the car for a week now. I don't mind returning the car to the car dealer, but will this be reflected on my credit? Can I return the car and not be legally bound to the car dealer with the purchase contract?


Asked on 6/05/11, 3:30 pm

1 Answer from Attorneys
Stephen Barnes Barnes Law Firm

If the dealer accepts return of the vehicle it would be considered an unwind and should not be reflected on your credit.

However, whether or not the dealer will accept the vehicle back depends on the contract you signed. If you signed a 1 pay contract (essentially cash from your credit union), based on the CU's verbal representation, the dealer could hold you to that agreement. If you signed a finance agreement, i.e. monthly payments etc., and the dealer is unable to get you financing then they may be required to take the vehicle back.

I would talk with them and try to work it out. Most of the time they would rather have the car back and stay away from a legal dispute.

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Answered on 6/09/11, 2:52 pm


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