The following situation seems all too common: you signed a retail purchase/financing agreement to purchase a car, and then the dealership calls you back to sign a new contract. This arrangement is commonly called a “yo-yo” or “spot delivery” sale, where you thought everything was final, but suddenly the dealership says otherwise. What rights do you have in this situation?
Firstly, understand that your contract with the dealership governs your rights and obligations. For instance, the usual form contract in Nevada will include a “Notice of Rescission Rights” provision on the first page of the contract. That provision will indicate that if the buyer signs that section, then the “Notice of Rescission Rights” will apply. Those rights are usually outlined on the second page of the contract and, in sum, indicate that if the dealership can’t assign the contract to a bank with your agreed-upon financial terms within 20 days, then the dealership must mail you a notice that it is rescinding the contract. In other words, if the dealership mails you the notice within that time, then they are using their right to cancel the contract and to get the car back from you. You are entitled to a refund of any down payments and a return of any trade-in vehicle, but may be liable for any damages the car may have incurred while in your possession.
Note that if the dealership follows the aforementioned practice, they are acting legally. Sometimes people are surprised and/or upset when they have already taken the car home and have had it for around 20 days when the dealership suddenly asks for the car back. They assume that because they drove the car off the lot, the dealership cannot ask for it back, but that unfortunately is not the case if they signed a Notice of Rescission Rights.
However, if the Notice of Rescission Rights does NOT apply to your contract and the dealership is pressuring you to sign a new contract with different terms, understand that they could be acting illegally. Their conduct could constitute a “deceptive trade practice” or other illegal practice under state laws, entitling you to recover any actual damages, attorney’s fees, and court costs. The form contract will always identify the dealership as the “creditor” in the agreement that you signed. Thus, they are technically and legally the creditor to which you own payments in the event they do not assign the contract to a financial institution. Thus, you can proceed with the contract that you signed with the dealership.
Or even if the Notice of Rescission Rights applies to your contract, the dealership could still be illegally inducing you to sign a new contract with less desirable terms, such as higher interest. Thus, you should be extra vigilant about what you initially signed and any new documents the dealership is presenting to you. If you feel like what the dealership is doing is wrong, your instincts could be correct.