Dealer won’t pay the two (thousand) dollars… ordered to pay $37,881.38

Representing victims of bad car deals often brings to mind that old vaudeville routine with the punch line,  “Just pay the $2!” *

These cases often start out as disputes over relatively little money.  The customer typically learns that the car won’t pass inspection or has serious problems that weren’t evident during a short test drive.  The customer asks — begs–  the dealer to just cancel the deal and give back her deposit.  The dealer won’t do it.

The dealer will insist that you don’t have the right to cancel a car sale just because you realize afterwards that it was a bad deal.  That’s true.  That’s the law. Contrary to what many people think, there is no three-day “cooling off period” in car sales.

But it’s also the law that you do have the right to cancel the deal under a variety of circumstances:  if the dealer lied about something seriously wrong with the car,  if the car wasn’t fit to drive or lacked clear title at the time of sale, or if the car fails its state inspection right after being sold.  And in such cases, if a dealer ignores your entreaty to cancel the deal and refund your money, he acts at his peril.

I recently concluded a case with just this set of facts.  When the car failed inspection, the dealer insisted, over the customer’s objections, that he had the right to repair it so that it would pass.  As a judge later found, he plugged up the muffler with putty so it would pass.   He then left the car in a parking lot of a nearby Chinese restaurant and threatened that if the customer didn’t retrieve it, it would be towed away, but she would still be responsible for making the payments.

The customer had to put more than $2000 of her own money into repairing the car while continuing to make weekly payments.  Eventually she got fed up and filed a case in small claims court, hoping to get her $2,000 back.  Then, in a true illustration of the state of mind of the guy who won’t pay the two dollars, the dealer and his lawyer removed the case from small claims to regular court.  Evidently they bet that the consumer, who didn’t have a lawyer, would be unable to represent herself in the more complex environment of regular court sessions, and would either give up or lose on a procedural technicality.

Instead, the customer redoubled her effort to get a lawyer…. and found me.  I found, in addition to the defects in the car itself, some illegality in the financing — violations of the Truth-in-Lending law, and a usurious finance charge.

Two years later, after a bench trial, the car dealer was ordered to pay my client $37,881.13, which included a fee for my services.  After briefly considering an appeal, the dealer relented and we settled for a prompt payment of something less than the judgment amount.   You can read the decision and judgment here.

I’d like to think that next time a customer complains that her car has serious issues, or even failed inspection, and asks for her money back, this dealer will remember what happened to him and “pay the two dollars.”   We shall see.


* One version appears here:

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