Dealer reneging on lease after the contract is signed

This is from a buddy of mine. Any thoughts if a dealer can do this?

Honda dealer offered to buy out my current leased Honda and lease me another vehicle. We agreed on a buy out price and lease price. The buyout for my vehicle was the amount of the down payment for the lease - so there was no money down. We signed the contract- which I have in hand.
They requested pictures of the exterior of my vehicle which I provided. A Honda sales man came to my home to drop off the new lease and picked up my old vehicle. He made no mention of any issues.
The dealer contacted me that the exterior of the car is in worse shape than the pictures show and are now trying to back out of the deal, or I need to pay them $6000 for the exterior damages.
I have signed lease docs. A Honda representative drove my old car off my property and mentioned nothing at the time.
The manager at the dealership said they wont honor the contract or complete the buyout of my current lease from Honda and threatened to reposes my new car.
Can they do this? What should I do?

Has dealership sent you some photos of the damages? it could be the rep took it for a joy ride and did a lil

3 Likes

If under 14 days, they can request / force you to unwind…after 14 days, that ‘oopsie’ is valid.
But there is no path where you must ‘pay the $6000’, either take the trade in back and give them a used car or they pound sand (Depending on the timing)

1 Like

Have the dealer return the trade, pick up the new car, and unwind the deal. Get some third-party offers on what the trade is actually worth and go from there

4 Likes

Update- dealer dropped the trade in car back in his driveway and dropped keys in his mailbox

3 Likes

He better return that car he leased back and I assume within 24 hours, or he can be charged with stolen property.

Is it in the same condition it left the house before?

Why? How can they go back on this? There’s a signed contract

I am sure there is language in the contract that gives the dealer an out.

If a ‘contract’ is not funded , the dealer has the authority to Unwind. (Note Only the Dealer has this authority, the buyer doesn’t)

But there is also language that says if you don’t contact the buyer within 14 days. You (the dealer) have to finance it.

When they took the car that’s not considered funded?

No, it’s considered funded when whatever loan your friend has on the new car is paid to the dealer by the bank. Sometimes loan’s don’t fund because of Dealer Error, User Exaggeration, Lost Mail, and there is language protecting the dealer.

If the trade in car paid for the new car 100%, well then the dealer just bought a stinker. But if this car has a loan then they have the right to unwind it.

1 Like

They cannot unless the bank declines the contract/approval.

Is this your buddy or you? lol

10 Likes

Agree w/ @forbs here.

These contracts literally have a whole paragraph that deals with these type situations. It’s basically a catch all clause, and your friend signed this contract including these paragraphs. No, just b/c it’s signed does not mean it is funded, etc…

Hehe good point. I would just give it back and move on. He’s stuck on the principal

Question - what photos did your buddy send to the dealer and are there actual exterior damages (worth $6k to fix / diminished value of 6k)?

1 Like

I’m guessing $6k is the equity from trade. Anyway, they dropped car back off; just tell him to return the car and find another dealer. If there is significant damage, have him go in to confirm the offer after inspection and after disclosing the damage.

We’ve seen plenty of people die on this hill, typically they get arrested before they die.

What was the difference between actual condition and the photos? We’re the photos when he first got it and years and a few fender benders later what he sent to the dealer? $6000 is a decent bit of damage to hide in photos even if the amount is exaggerated by a dealer.

1 Like

There is no principal. There is no contract unless its funded. In this case, its not funded. What he has right now is a piece of paper with signatures which mean absolutely nothing. As others have mentioned, I am sure there is a clause in the contract which says dealer has to find funding within x amount of days, otherwise buyer has to return the car or secure finding otherwise.

1 Like