If you are someone who recently traded in your old vehicle as part of a dealership transaction and, for one reason or another, the deal suddenly fell apart, you’re likely now wondering whether the dealership can simply refuse to give you your trade-in back. While the answer will often depend on the specific facts surrounding the transaction, in most cases, the answer is no. Please continue reading and contact an experienced New Mexico car dealer fraud attorney from Feferman, Warren & Mattison to learn more about your rights if a dealership is refusing to return your trade-in. Here are some of the questions you may have:

Can a Dealership Refuse to Return My Trade-In?

Typically, the answer is no. While there may be situations where a dealership may lawfully retain a trade-in vehicle, there are many others where refusing to return it may create serious legal issues. Much will depend on whether the sale was actually completed, what documents were signed, whether financing was approved, and what happened after the agreement was made.

For example, many dealerships allow buyers to take a vehicle home before financing has been finalized. If financing later falls through, the dealership may ask the buyer to return the new vehicle. At that point, disputes sometimes take place over whether the dealership must also return the customer’s trade-in. New Mexico law states that under most fact scenarios, the trade-in must be returned. Some of the factors that may become important are as follows:

  • Whether the purchase contract became legally binding.
  • Whether financing was ultimately approved.
  • Whether the dealership has already sold the trade-in vehicle.
  • The language contained in the sales agreement.

What if the Dealer Already Sold My Trade-In?

Unfortunately, this situation is not as uncommon as many people believe. In some cases, a dealership sells or transfers the trade-in vehicle before the transaction is completely finalized. If the deal later falls apart, the consumer may discover that getting the original vehicle back is no longer possible. If this happens, several important questions may need to be answered, including the following:

  • Did the dealership have the legal right to sell the trade-in?
  • Did the dealership misrepresent the status of the financing?
  • Is the consumer entitled to the value of the trade-in instead?
  • Did the dealership violate New Mexico consumer protection laws?

These transactions can involve other abusive conduct, for example when the dealer has held the trade-in for a period of time but has failed to pay off or make payments to the creditor for the trade-in. When the trade-in is returned, the loan is in default.

What Should I Do if a Dealer Will Not Return My Vehicle?

If a dealership refuses to return your trade-in, it is generally best to avoid assuming there is nothing you can do. Many consumers mistakenly believe the dealership automatically has the final say simply because it is in possession of the vehicle. Fortunately, that is not always the case. If you find yourself in this situation, you should do your best to take the following steps:

  • Keep copies of every contract, receipt, and financing document.
  • Save any emails, text messages, or written communications with the dealership.
  • Make notes regarding everything that occurred during the transaction.
  • Avoid signing additional paperwork.
  • Speak with an experienced New Mexico consumer protection lawyer as soon as possible.

The bottom line is that a dealership cannot simply ignore the law because a dispute has arisen over a vehicle purchase. If your trade-in is being wrongfully withheld, or if the dealership sold it before the transaction was properly completed, you may have legal options, and our team can help you explore them. Contact Feferman, Warren & Mattison for a free initial evaluation today.