The Car Dealer Stole My Down Payment or Trade In

Watch the Video Below: When a car dealer steals or keeps a down payment after financing was not approved, Maryland buyers can get help.  Whitney, LLP’s dealer fraud lawyers help buyers when the dealer does not return the down payment or trade in after financing is not approved, and the dealer wants their car back.

Maryland’s Spot Delivery Law protects consumers when financing is not approved, which is a common dealer problem that consumers find themselves dealing with in Maryland.

Whitney’s LLP’s attorneys have experience recovering down payments and trade-ins for buyers after financing was not approved and the dealer wants their car back. Consumers have more legal rights than they realize, and we help buyers fight back against dishonest dealers.

 Click Here to Read about our Top 10 Most Common Types of Cases against Car Dealers.

Click Here to read about past car dealer fraud settlements.
Click Here to read blogs about our other car dealer cases, including settlements and other lawsuits we filed.

We offer Legal Consultations. Call Whitney, LLP at 410 583 8000, or use our Quick Contact Form, to discuss your potential case.  Here is our YouTube Channel  for more videos on car dealer legal issues.

The Car Dealer Stole My Down Payment or Trade In

Edited Transcript is below:

Hi, this is Dan Whitney with the Whitney Law Firm in Towson, Maryland. Today, we’re going to talk about The Car Dealer Stole My Down Payment. So, the question is why would a car dealer steal somebody’s down payment? Do they hate their customers? Maybe. More likely they’re just greedy. And the fact is, they think they can simply get away with stealing the down payment. So I’ve sued many car dealerships here in Maryland, and they are capable of anything. One of the most significant problems that my clients run into here in Maryland is that dealers will steal a down payment and they’ll also sell trade-ins when financing is not approved. And then they leave the customer holding the bag, and they say, “We’re not going to give your down payment back,” or “We’ve already sold your trade in. You’re not going to get it back.” And customers have no idea what to do. It’s such a terrible situation. It’s completely illegal. It’s totally unfair. Yet many dealers do this.

Spot Delivery Is When Financing Has Not Been Approved

Now, in Maryland, there’s something called a spot delivery. And what a spot delivery simply means is a car was delivered to a customer by a dealer and financing has not yet been finally approved. So why is that important? Well, if financing is not finally approved, that means of course it may fall through. And if financing falls through, that means that the customer is not going to be able to finance that car with the bank. And what the dealer’s probably going to do is you’re going to call up the customer and say, “Hey, bring the car back. The deal fell apart. We need our car back.” And that’s it.

Now, in Maryland, when a dealer finds out that financing has not been approved, they have four days from the time of delivery to notify the customer in writing that financing has not been approved. A notice is also required to be given to customers at the time of delivery if financing has not been finally approved at the time of delivery, laying out the customer’s rights. It’s generally called a spot delivery notice. And what the notice sets forth is the customer’s right to be notified within four days, whether or not financing has been approved or if it has not been approved. And if not, the customer has the right. As soon as they return that vehicle to the dealer, they’re entitled to immediately, and that’s in the law, immediately get back their down payment and their trade. And they get back 100% of the down payment.

Dealers Must Provide Notice of Financing Decline Within 4 Days – But Don’t.

Now, dealers almost never provide written notice within four days. Customers usually find out two, three, four weeks. Sometimes it could be even be months. They find out that financing has not been approved. Now, why is that a problem? That’s a problem because in really in the scope of a week, if somebody turns the trade-in in, they still have their tags. And of course, well, at least in Maryland, if you don’t turn in your license plate, you’re going to start getting fined if the car is no longer insured. So people trade their car in, they think financing is done, they turn their plates into the MVA. And then when they get a call from the dealer saying, “Hey, come get your trade,” they say, “Well, I’ve already turned in my tags. I thought everything was done. You told me financing was approved.” And the dealer says, true to form, “Whatever. I don’t care. Just come get your car or we’re going to have it towed somewhere else.” They don’t care.

Dealers Cannot Keep the Down Payment After Financing is Not Approved

Now, regarding down payments when financing is not approved, what dealers will often say is they’ll call the customer and say, “Okay, financing has not been approved. Bring our car back.” And the customer will say, “Okay, here’s your car. Now give me my trade and give me my down payment.” And the dealer often says regarding the down payment, “Look, you drove our car for free for two, three, four weeks. You put a hundred miles on it. We have to reinspect it. We have to do some touch-up work.” Whatever, none of it matters. They’re required to give a hundred percent of the down payment back, but they will start to come up with excuses as to why the customer is not going to get their down payment back immediately.

For example, in a  case we have against a car dealer here in the Baltimore area where somebody put $5,000 down, our client got called about three weeks after the purchase to come back. And instead of getting their $5,000 down payment back immediately, about three weeks later, they got a check for $135. And the check actually itemized what the deductions for, which doesn’t matter because they’re all illegal deductions. All the down payment has to be refunded immediately after the customer brings the vehicle back when financing is not approved.

Dealers Cannot Sell a Trade Before Financing is Approved

Now, what also happens often is when the dealer actually sells somebody’s trade in before financing isn’t approved. And you would think to yourself, “What kind of wretched organization would do such a thing?” And I would say, drive down a busy street and look to your left and right, and that’s probably who’s going to be doing these things. The new dealers do them, the used dealers do it, they all do.  It’s just a fact of life that dealers sometimes sell the car before financing is approved.

Now, this leaves the customer in a terrible spot. They have a car that they don’t have financing for. The dealer wants it back. The trade in is gone and they don’t know what to do. And often that’s when they call a dealer lawyer or a dealer fraud lawyer like myself to say, “Can you help me?” And the answer is yes, we can probbaly help sue the dealership, and the result will depend in part on where your trade is. Has it really been sold? Is it just waiting at auction to be sold? Sometimes dealers will buy it back from a customer who they sold it to in order to give it back.  And sometimes it shakes out where the customer may be compensated the retail value of the trade that was illegally sold.

Daniel W. Whitney, Sr. and Daniel W. Whitney, Jr. of Whitney, LLP

Lawyers for the Dealer Keeping the Down Payment or Selling the Trade

If you were the victim of a spot delivery fraud or the dealer sold your trade or kept your down payment after financing was not approved, give us a call.

Customers have many legal rights that dealers count on the customers not knowing.

We offer Legal Consultations. Call Whitney, LLP at 410 583 8000, or use our Quick Contact Form, to discuss your potential case.