A COUPLE TRICKS YOU CAN EXPECT FROM VALLEY CAR DEALERS

A COUPLE TRICKS YOU CAN EXPECT FROM VALLEY CAR DEALERS

Recently, I’ve received more calls about car purchases gone wrong than any other subject.  These are calls I did not receive before the economy began to suffer.  But some car dealers have, unfortunately, resorted to taking advantage of the consumer in response to the recession.

I will tell you about two such practices.  The purpose of both is the same: getting the consumer into the car, allowing her to drive it for a few weeks until she is attached to it, then calling the car back citing some problem, in the hope that the buyer will have become so attached that she will comply with the new condition, which usually means paying more money.

The first practice is informing the buyer, a few weeks after the transaction, that the dealer could not get financing from the usual sources, and that the buyer must come in to sign a new contract, which invariably will include tougher terms, usually regarding interest rate.

At first, dealers were doing this without the support of any language in the contract.  But once lawyers started getting involved, the dealers started including language with the other boilerplate saying that the deal is contingent on the dealer finding appropriate financing.  The language was usually too small to read and incomprehensible even if you could read it.  Consumer lawyers got involved, claiming this practice was unconscionable and possibly fraudulent.  So the dealers finally went to their lawyers who drew up a separate document that had the contingent language in bigger, more readable print and requiring the buyer’s initials.  This document is probably enforceable in court.  So when you’re handed a sheet calling for your initials, be sure to read it closely.

One more thing . . . If you decide to let the deal go and demand your trade-in back, and the dealer says it is already gone, know that the dealer has broken state law, which requires it to keep the trade-in available until all contingencies are met.

The second practice – less frequent and more justifiable – relates to your trade-in. The salesman will usually ask you a number of questions about the car, which you should answer honestly.  But what about the things they don’t ask you about.  Are you off the hook?  No.  That same list requiring your initials which I discussed above will also include a provision stating:

“I understand that the amount showing as Trade Payoff is my responsibility, an estimate only, and subject to verification by my lien holder for a minimum 10-Day payoff.”

This means that, if the dealer within the first 10 days discovers a problem with the car which it believes affects its value, it can rescind the transaction unless you pay for that difference in value.  Since you probably made the deal only because of the amount you were getting on the trade-in, this can be a big problem.  You may love the car enough to pay the difference, but before doing so, require the dealer to verify his assessment of the decrease in value.

It may be possible for you to handle this negotiation on your own, but I don’t advise it. The dealer will be more responsive to a lawyer’s letterhead.

WORKING WITH A LAWYER: WHO IS THE GREEDY ATTORNEY’S FAVORITE CLIENT?

Let me tell you about two of my past clients.

Romero was a legal immigrant who had pulled himself up by his bootstraps to a place where he was ready to buy his first apartment house.  But he had three problems.  First, he spoke a little English, but not a lot.  Second, because he had done well, he thought he was smarter than his problems and the people he was dealing with.  Third, as a result of number two, he negotiated the contract himself.  Three  months later, the deal fell through because the other side had defrauded him and the language of the contract had taken away his protection. Within another month, he was involved in litigation which lasted two years and forced him to pay the firm I worked at over $200,000.

 

George was an astute businessman and a veteran of past litigation. He wanted to buy a struggling company and turn it around, but he had to deal with an ornery seller who, it seemed, would rather see the company go down than make a deal which would fill his pockets. George did not try to handle the problem himself.  He knew he needed an Arizona Business Litigation lawyer, so he came to us.  We developed a number of strategies to determine just how difficult the seller would be. We found out that there could be no deal without George making sacrifices that destroyed the attraction of the company.  So he walked away, probably saving himself hundreds of thousands of dollars chasing after the company, and paying us less than $10,000.

The first scenario brought the firm a lot of money. The second was far more satisfying for the client and for us.

The message is clear. When you sense a problem ahead, see an Arizona Contract Lawyer or Business Litigation Lawyer. You don’t have to commit. You can take the time to decide what is best for you . But at least you will know your options and, perhaps, avoid a much larger problem.