However, if the car dealer does sell your trade-in, at the very least, you should tell the car dealer that it has to give you whatever is the highest value for your trade-in out of either (1) the value of the trade-in as listed on the purchase contract, (2) the fair market value, or (3) what the car dealer received when it sold your trade-in. The language of the purchase contract does not appear to give the car dealer this option. Sometimes a car dealer may tell you that it already sold your trade-in, and will offer you the value of the trade-in as listed on the purchase contract. If you gave a $2,000 down payment and a car as a trade-in, the car dealer must give you back both the $2,000 and the trade-in when you return the car you purchased. The purchase contract requires the car dealer to return to you all consideration (i.e., everything) given for the purchase.

If the dealership cancels within 10 days, you get your down payment or trade-in back. Every purchase contract relating to a car purchase in California that I have reviewed has included this provision in it, and our firm has seen thousands of purchase contracts. If it does not, then the purchase is final and cannot be cancelled. But, the car dealer must notify you within 10 days of the date on the purchase contract. However, if the car dealer cannot find someone to buy your purchase contract, it can cancel the purchase contract. This language gives a car dealer the opportunity to find someone to buy your purchase contract.

So, this box advises you that after you sign the purchase contract and leave with the car, the dealership is going to find a finance company or bank to buy your contract. Turn to the back of the purchase contract, and find the box that says “Seller’s Right to Cancel.” It is at the bottom of the second column.Ĭar dealers are in the business of selling cars to consumers, not financing cars that consumers buy. That’s the long yellow document that says “RETAIL INSTALLMENT SALES CONTRACT” at the top. If you buy a car that is financed through the dealership, the dealer CAN cancel the contract, but only if it notifies you within 10 days of the date on the purchase contract. This type of financing is sometimes called a “spot delivery.” It is based on the language of the purchase contract.

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