Dealer sells car but changes mind

Every so often The Watchdog hears from people who regret buying a car. Maybe they drove home and realized the price was too high. Or they bought the wrong car.

They go back to their dealer and try to return the car. Too bad, so sad. There’s a legal contract, pal. And don’t even think about leaving the car.

If an upset buyer ditches a purchased car, a tow truck comes from the financing company. A black mark for repossession goes on the buyer’s record. But what if it were to happen the other way?

What if a dealer sells someone a car but then a day later gets seller’s remorse? What if a dealer signs a sales contract with a customer and then backs out after their lender doesn’t like the terms?

That’s what’s happening to Sandra Baker, an Arlington resident who works two jobs to save enough money to buy a car. She thought she found her ideal ride at Patterson Kia of Arlington — a 2012 Nissan Sentra for $15,000 that includes an extended warranty.

High interest at 18 percent, but the best part is no money down. She signed the deal and received the congratulations of the sales staff. When she went back the next day to get it, they wouldn’t give her the car. She was asked to sign a new deal.

The good news was her payments dropped. The bad news was that she was now asked to make a $2,500 down payment and find a co-signer. Baker turned the deal down. A contract is a contract, she said firmly.

The Watchdog discussed the matter with Joe Johnson, general manager at Patterson Kia, and another staffer in the finance department who handled the deal. I learned from them that the documents Baker signed were not final sales agreements but conditional on the availability and approval of outside financing, they said.

The deal was completed late at night after their lender closed. The finance officer guessed what terms would work. But the guess was wrong. They told me that after the lender’s rejection, they were allowed to put the original deal aside and seek a new one.

There was no intent to hurt the customer, Johnson said. “We do everything here by the book.” After we talked, Patterson Kia called Baker and offered her a third deal. This time the offer was a $1,100 down payment. She rejected that offer, too. She likes her original deal with no money down.

“They should honor this,” she says. “It’s not my mistake. If it’s a mistake by their financial officer, I hate it. I’m sorry. But I think they should honor the deal.”

Both sides are at a standoff now. In a phone interview, the dealership’s GM pointed out places in his contract that show Baker didn’t own the car. One document signed by Baker is called a conditional delivery agreement.

It states the deal hinges on whether “final approval of financing is granted by a financial institution.”

That seems clear enough. But North Texas consumer lawyer Jerry Jarzombek reviewed the document for me. He described the language used as “flaky” and pointed to inconsistencies that he said were enough to get the agreement tossed.

Elsewhere in the contract, it states in capital letters, “THIS CONTRACT IS NOT VALID UNTIL YOU AND WE SIGN IT.” Baker signed her name.

But the GM insisted that his dealership did not sign the contract. He’s right. There’s no signature with a pen. But someone stamped the dealer’s name on the line beside the words “Seller signs.” Under federal law, a stamped company name is as good as a signature, Jarzombek said, adding: “They rubber-stamped it. They’ve obligated themselves to deliver the car. They established mutual obligation.”

What can a consumer do? File a lawsuit for breach of contract and possible violations of deceptive trade practice laws.

If a consumer wins, a settlement may include additional money for damages and legal fees. GM Johnson says the language used in his documents is clear. “All I can tell you is, I’m in the car sales business. I’m not a bank. We offered her the terms that the bank made available to her.”

It could be worse. Under Patterson Kia’s conditional delivery agreement, if someone buys a car and drives it off a lot but a lender later doesn’t approve, the buyer has to return the car. If the buyer left a trade-in but that car is gone, Patterson Kia only has to pay the agreed trade-in value to make things right.

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