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Consumer: I recently bought a car. But then the dealership called and said I needed to come in and sign another contract – with higher payments. Can they do that?
Attorney General Rob McKenna: A Washington law allows car dealers four working days to find financing and finalize a sale after you’ve signed a contingent contract. If the financing falls through, the dealer must call off the deal, return your down payment and your trade-in and start negotiations from scratch.
A dealer can’t change the terms and force you to sign a new contract that requires more money, higher interest rates or a co-signer. This switcheroo is known as “bushing” or “yo-yo sales” and the practice is illegal under a Washington law, RCW 46.70.180(4).
Nonetheless, the Attorney General’s Office received nearly 300 bushing complaints from consumers between 2003 and 2007 and the numbers have been rising. The Consumer Protection Division is working to educate both dealers and car buyers about the law and stands ready to take enforcement action against sellers who deceive consumers.
Buyers can help protect themselves by knowing how much a car is worth and exploring finance options before making an offer. You may be able to get a better loan from your bank or credit union. The Attorney General’s Web site offers advice for buying a new or used car.
If a dealer contacts you within four working days and calls the deal off, your options are to accept a new offer, if available, or walk away. If the dealer can’t find financing that meets your needs, you must return the new car. That can be tough to do if you’ve already become emotionally attached to your new wheels, but the dealer is not obligated to maintain the contract.
Dealerships often sell trade-ins within 24 hours. If that happens, then the dealer must refund you the trade-in value in cash, even if the dealer over-valued your trade-in.
If more than four working days have passed before the dealer calls you about renegotiating financing, then the original deal stands.
Want more consumer advice? Check out the Attorney General’s All Consuming blog at www.atg.wa.gov/allconsuming.aspx.
Attorney General Rob McKenna offers this public service to help consumers avoid fraud and to promote a fair and informed marketplace. If you have a consumer complaint or inquiry, contact theConsumer Protection Division. To suggest a future topic for this column, write to “Ask the AG”, Attorney General’s Office, 800 5th Ave. Suite 2000, Seattle, WA 98104-3188.