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What Fees Can the Car Dealer Charge On a Return or Default? - YouTube
Channel: unknown
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today we're going to talk about the
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issue of
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car dealerships and when they try and
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charge fees that are not allowed
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under the contract
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so my name is dan whitney i'm an
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attorney i handle a lot of car cases
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involving suing car dealerships and
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finance companies on the never ending
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variety of scams and frauds that they'll
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try to do to anybody
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but today
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i've had an arbitration representing a
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consumer who bought a car
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and the dealership tried to charge him
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fees and charges
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that it was not allowed to
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so here's what happened
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um
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a a man goes to buy a car he looks at it
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likes it
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ends up buying it puts 5500 down and
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signs a
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signs of finance contract like
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many of us do
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when we buy a car because 20 or 30 grand
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is a lot to get together and put down
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so he signs a finance contract
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now
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uh about 35 days go by and the car has
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problems and he decides that he does not
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want it anymore and he calls the lender
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and then he calls the dealership and
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they're freaking out because the first
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payment has not been made which means
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the lender is going to make them buy the
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car back under the deal agreement
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so
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what happens but he taught he's talking
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to the dealer and the dealer says
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you know you need to bring that car back
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or we're going to repo it from you so he
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thinks
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all right i'll bring the car back i'll
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get my down payment back and you know
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that'll take care of it
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so he brings the car back the problem is
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once he brings the car back the dealer
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says guess what now you have nothing you
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don't have the car and we're keeping
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your down payment he says why are you
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keeping my down payment
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they say because you've defaulted on the
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loan and we're keeping your down payment
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in other words it's a default charge of
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course
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that's not what he expected he got upset
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they refused to give it back and
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eventually he obtained counsel
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so
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in reviewing the case we end up filing a
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lawsuit and we say to them you know
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what's your basis for not returning this
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gentleman's down payment after you got
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your car back
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and they said
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they said we have a sign on the wall
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we have a sign on the wall that sets
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forth all the fees we can charge when a
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loan is canceled
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which
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they're saying is what happened here the
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loan was cancelled when he brought it
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back and they bought it back so it
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wasn't really cancelled it was a buyback
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but they're saying we have a sign on the
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wall
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that says
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these are the cancellation fees we can
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charge and when he was in the dealership
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he saw the sign on the wall
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and because he saw the sign with these
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charges on it we're going to hold him
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accountable to these charges
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now
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they also gave him a piece of paper when
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he made his
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down payment and the piece of paper said
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this down payment is non-refundable
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and that's one of the other reasons they
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relied
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um on and decided to keep his down
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payment and not give it back
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but here's the problem with all that
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so there's something called an
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integration clause and you might say
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well why does anybody care about what an
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integration clause is it sounds like a
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racial thing it has nothing to do with
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race i mean if anywhere you're not going
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to get discriminated against it's at a
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cardio shift they're going to cheat you
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whether you're white
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black brown any other color anybody
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should identify with
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if you want to feel not discriminated
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just go to a cardio ship don't cheat
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anybody but
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the integration clause in the contract
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simply refers to
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that the entire contract is contained
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within the contract itself there's no
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other documents
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other than the contract that was signed
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by both parties that includes the
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agreement in other words this contract
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is the only contract that
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is going to control the terms of the
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deal so importantly in all finance
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contracts pretty much every contract
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i've seen there's something called
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there's something called the integration
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clause
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and what the integration clause is
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is a clause that simply says
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entire agreement
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you and our and your and our entire
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agreement is contained in this contract
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there are no unwritten agreements
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regarding this contract
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any change to this contract must be in
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writing and signed by you and us
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now
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so the evaluation and the assessment of
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this case
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significantly turned on what are their
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remedies
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under this contract for a default
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when
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the first payment is not made and the
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customer ends up giving the car back
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so we simply turn to that provision of
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the contract default you'll be in
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default if you
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fail to perform any obligation such as
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making a payment
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and then there's a remedy section
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and the remedies include we can ask you
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to bring the car back which is what
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they did under threat of repossession
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but they brought it back and there's a
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list of other remedies simply meaning
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what the dealership is allowed to do
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under the contract if there's a default
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so he said okay
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what i'm what i'm seeing here is you
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you've kept his down payment
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and you've told him that's
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non-refundable
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and you've charged him a total of three
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thousand four hundred and fifty three
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dollars in other fees that you say
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he has incurred including
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39 dollars a day for the days he had it
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49 cents a mile for every mile he drove
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it a restocking fee of 200 a 500 dollar
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dealer processing fee which by the way
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was already charged when he bought the
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car
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and so the question is
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really what it boils down to are dealers
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allowed to charge customers fees
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based on signs
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they
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i don't want to show because it's got
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the it's got the dealer's name on it but
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based on signs that they hang on the
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wall
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there's no written agreement to it but
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it just hangs on the wall and they can
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say the customer customer you saw this
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because you saw it you have to pay these
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fees even though it's not included in
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the language of the contract and the
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short answer the short and sweet answer
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is no
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if the if the contract that you've
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signed and it most likely is going to be
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if it's a finance contract
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if it's fully integrated that contract
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contains all of the
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fees charges whatever else that the
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dealership is going to be allowed to
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charge you now
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what it may say is
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um you know in your particular state the
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dealer has opted into you know the
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closed-end credit grantor provisions and
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certain fees are allowed under that
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provision well that's fine you just have
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to look up that provision and see what
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they're allowed to do
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but the point is
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a dealership
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in my experience cannot hang
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a list of fees on the wall
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and then force a customer
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to pay those fees and withhold their
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down payment because of those fees or
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because of something that writes on a
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receipt
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that is not then incorporated into the
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final contract
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so
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to do the analysis you just have to read
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your contract carefully if you have a
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question of course you probably want to
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seek somebody
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out who's got experience looking at this
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but the bottom line is if if there's
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charges hanging on the wall in a car
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dealership and they're trying to force
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you to pay or withhold your money
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because of that there's a very good
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chance um they're just trying to cheat
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you and they're not going to be allowed
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to do it
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i mean basically and the example that i
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use to illustrate this to the judge in
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the case today
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was
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what that dealership is trying to do
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is essentially the same thing
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as if i were to say which i said to the
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judge
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you know take a look at this your honor
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i know that you know how to read you
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probably can read pretty well and i've
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got bad news for you
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because the sign says by reading this i
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agree to pay 3453.66
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to the owner of the sign
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that's essentially what that is what the
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dealership is saying to the client now
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of course this is preposterous if
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everybody who read this
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sign had to pay
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uh considering this is going to go on
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youtube you know
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i'd have millions of dollars and
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everybody else will be out but of course
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that's preposterous and that's not the
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way it works in the world what happens
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is when parties sign a contract
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those terms apply
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so
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i hope this has been interesting the
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moral of the stories read your contract
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very carefully and that will guide you
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as to what fees the dealer is able to
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charge you so i hope it's been helpful
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if you like this please leave a thumbs
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up subscribe
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if you have any questions leave them in
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the comments thanks for watching and
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take care
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