January 21, 2016
Can car dealer back out of deal once contract has been signed?
Dear Consumer Ed:
Yesterday afternoon I purchased a new car and was able to get a great deal. However, today I received a voicemail from the dealer, asking me to come back in to discuss the deal. From his tone, I assumed they didn't make any money on the deal. Regardless, the contract was signed and accepted. I took delivery of the vehicle and paid them on the spot, with a check from my bank. Can the dealership back out of this deal or demand more money?
Consumer Ed says:
This sounds like a case of “seller’s remorse.” Generally speaking, there is no “cooling off period” – i.e., a legal right to cancel a vehicle purchase contract for either the buyer or the seller. Once all of the requirements for completion of the transaction are satisfied and you have signed the necessary paperwork, you have bought the vehicle. However, it is important that you read all of your vehicle purchase documents carefully. Although unlikely, if the dealership retained the right to back out of the contract, if the contract provides a basis for modifying certain terms later on, or if some event or act must occur in order to finalize the deal, the wording of the contract should include those provisions.
If such provisions are not contained in your contract, it would appear that your transaction is complete, and therefore the seller should not be able to change the terms of the agreement once it has been signed. If the seller tries to change the terms, you need to consult with an attorney before agreeing or taking any action.