Can a dealer withold tags after signing?


#1

Hi everyone. New member here- wish I joined for more positive reason!

The tl;dr: Can a dealer withold tags because they approvede for a rebate I wasn’t qualified for? Signed the papers and drove off the lot and everything. Now they want me to sign a different contract and have me eat the cost of the rebate

Story:
I bought a Hyundai two weeks ago. I had a recent college grad rebate factored in. I had the rebates get signed over to the dealer so it came off the out-the-door price pre-financing. I printed my transcript on the spot and got an A-ok from the dealer and drove the car off the lot.

Next day, the dealership finance guy emails me asking for my job offer letter. I had no idea what he was taking about. I’m in a fellowship and not allowed to apply to jobs before I finish; had he asked me the day before I would have told him that, but this was the first I heard of him requiring a letter. After some back and forth, he let up and said my fellowship stipend letter should be fine, so I sent that.

I got a call from him yesterday saying that Hyundai Motor Finance (HMF) called my school and my school misreported my grad date for 2015. This apparently caused them to take a closer look at my application and they told him that without a job offer letter the rebate and special 2.39 apr was rejected, but “good news” was that he got us a lower apr, from 2.39 w HMF + rebate to 2.19 from other lender and no rebate. All we need to do is to sign a new contract with 400 added back onto the out the door price.

I called my school’s registrar’s office, my grad program, and HMF to follow up and it turns out that none of this is true- HMF never called to inquire, my rebate app is still in process, no rejection, and I was approved for 2.39. I suspect that my finance guy messed up by giving me the rebate without making sure I had an offer letter and is now trying to cover his mistake by having me eat the cost of a future rebate rejection. I think he made up some BS story about HMF to justify this new contract. He said he can’t mail us our tags until we sign this new contract, which is a big problem for us as we now live out of state and my fiancé needs the car to get to work. Our temp plates expire March 27.

My question: Can I argue that by not doing his due diligence to know the terms of the rebate before factoring it into the cost, he misrepresented the price of the car at the time of purchase and therefore THEY should eat the $400? If I get the rebate I will fulfill my end of the deal and sign it to them. But if not, they gave me that price and they should stay true to it.

Also, can they do that? Can they threaten to hold my tags in exchange for me signing a different contract?

Thanks so much for your help. First time car buyer, and it has turned into a nightmare.


#2

Sorry- no idea why that post became unformatted!


#3

Well I really have no idea. If you have a bank or credit union you deal with, I’d ask to talk to one of their VPs about it. You could also make a quick call to your state AG but they are not going to want to give a quick answer. Might be worth a quick consult with a lawyer on this one.

Now in general the way I see it is that they made an offer and you accepted it but they are not willing to abide by that contract. You can try forcing them but I suspect somewhere in that fine print on the back of what you signed is something to the effect it is contingent on all facts as presented. So It sounds to me like the original contract is void. So you take the car back, they rip up the agreement, and you go on your way to another dealer.

The other option is that they are now offering another contract that you can either accept or reject. People have walked away from deals for a lot less than $400. You could try splitting the difference and see if they go for the $200 additional or just tell them to stick it. I don’t know what HMF is and it may be possible that they make more money from that financing than through the manufacturer. But you’d sure want to make sure you know who you are dealing with and what the pitfalls might be with that company. Normally though you don’t get out the door without meeting with the finance folks to make sure everything is in order.

You can go get yourself a Mitsubishi for zero interest for 60 months and most have a recent grad promotion now. So up to you but I doubt you are going to win this one easily.


#4

.I agree with you, but that doesn’t mean anything since neither of us knows what the law says on this matter.

What I’m pretty sure it doesn’t do is let him hold your tags hostage. That’s a matter between you and your state. The dealer acts as the middleman to ensure that the license fees get paid. If they submitted them to the state and got the tags, I think they are in no position to legally hold them. But that’s still just an educated guess based on the role dealers play in the licensing process. They know they have you in an awkward place, but a little legal research might put them in the even more awkward place of defending an illegal withholding of your tags (it may be legal.)

I hate to bring up another awkward issue, but am I right in understanding you bought a car in one state and immediately moved to another one? You probably had good reasons for doing it, but do read up on what your new state’s laws have to say about this. In many states you’d be responsible for paying additional taxes on the imported car.

Have you actually figured out how much that ‘better’ finance rate might save you? Counting all the fees and whatnot? It may be a better deal and they are hoping you’ll realize it and go away happy.


#5

Thanks so much for the thoughtful responses.

Bing- HMF is Hyundai Motor Finance, which I believe is a separate entity from the dealer. We met with the finance person and he preapproved the rebate when he got my transcript (in office) and factored it into the Out The Door price. Per your advice I checked out the fine print on the contract- I saw in the Hyundai Cash Incentive Instruction form that the dealer is responsible to assess eligibility and that any unpaid (rejected) rebates are charged to the dealer, not consumer. It also seems like it would be off if a consumer protection clause like this didn’t exist- I imagine that without it, dealers could apply bogus rebates to the base prices of cars, get the shopper to agree, then pull the rebates out from under them on the premise the shopper didn’t qualify and blackmail them into paying extra by threatening things like withholding tags… Kind of like the dealer I’m working with now, unfortunately. I wish I knew about the Mitsubishi deal before working with this horrible Hyundai dealership. Thank you for sharing!

MarkM- your assumption is correct- we bought the car in NJ but moved to MD shortly thereafter. Because I am a permanent resident in MD and aimed to register it at my address, we calculated the cost based on MD sales tax. I think it’s a great point to check the laws to see if it is legal to withhold tags and titles after signing- I have checked the DMV website but I’m not seeing anything conclusive. Do you have any suggestions as to another resource I could check out? Thank you!


#6

I won’t attempt to address the legal aspect but here’s what I would do-

Call the finance manager and tell him you called HMF and they contradicted his story. They say I’m qualified for the loan at the agreed upon rate and that the rebate has not been rejected. Therefore- pound sand. If you want to continue on this track, I will call the AG office in your state this afternoon to discuss these business practices with them and see what they say.

Likely, they haven’t even sent in your registration money yet. They would need approval on the financing to move forward with the title, right? You need a title submission before registration, right? One other thought, your temps are for the selling state, right? Your plates should be for your current residence state, right? Why would the dealer receive plates anyway? Everywhere I’ve done something similar, the state sends me the plates in the mail…


#7

A guy named Denny Hecker used to be a big auto dealership mogul where I live. He’s now in federal prison for 10 years for screwing with people’s registrations and committing fraud with his car company’s loan arm. If you signed the contract and the registration is paid for (which it is, if you drove it off the lot) then you’re in the clear. Tell them if you don’t have your registration and plates within the normal time frame, you will be talking to the attorney general.

As a student, btw, your university probably has free or low cost legal counseling available. You should run this situation by them.


#8

The dealer is responsible to give you the window sticker sale price and proof you have paid the sales tax as well as title application if applicable. From there, it’s your responsibility to register the vehicle. The dealer gives you tempory plates for you to drive the car until you can register it yourself. If they are refusing to give you the temps but you have all the other material, you will have to register the car before you can take it or have it towed at you expense. This assumes the dealer has also given you the necessary paperwork to register the car yourself.


#9

I suggest that you contact the district attorney where the dealer is located. He is breaking the law. Once the criminal trial is over, then you can sue him for losses in a civil trial if you wish.


#10

On second thought, a call to Commerce or whatever agency in NJ licenses the dealers might be helpful. Now we’ll see if they are just political hacks or protecting the consumer.


#11

Hi all,

Again thanks so much for your replies and insight. Update: dealer is insisting I get a letter from my school re:graduation date, but I’m not sure i can get one within 4 business days, and my temp plate expires in 6 business days. It is also not clear if this letter will stop the shady shenanigans. I think short term I will contact the general manager tomorrow to demand my title and registration and agree to furnish the letter when my school gets it to me. I will also reach out to the NJ AG office in the hopes I can eat more info on my rights in this situation.

Ill keep the thread updates as I learn more but please feel free to continue leaving any suggestions. Thanks!


#12

My oh my. Welcome to America I guess. Oh, when you buy a house one day, this will look like child’s play!

I think you’ll have better luck resolving all this if you visit the dealership every day. No yelling and screaming, just persistent. Eventually they’ll decide having a customer there taking time away from what they are supposed to be doing – selling cars – it’s better to finalize the transaction as first agreed to. I think if you go to the dealership every day, within 3 or 4 days you’ll get your tags.

Don’t phone. Go there in person.


#13

Since you are in MD and the dealer is in NJ, this can turned out to be a drawn-out battle. Be prepared to stop driving the car until it is resolved.

Some options:

  1. Send a demand letter where the focus is delivery of either the title or manufacturer’s statement of origin (MSO) so that the vehicle can be properly registered in MD. Send it certified, return receipt. Include whatever documentation that shows you graduated and are currently employed, which would justify approval of the rebate in question. I wouldn’t fool much with phone calls at this point. Start documenting the issue from your perspective.

. I don’t understand the job offer letter part, because I have never been provided a job offer letter when I was fully employed, either initially when I left college or later when I changed jobs.
2. See if you can get a second year law student help you write the letter.
3. See if MD can provide you with a temporary license plate, based on the signed contract you have, Not sure this is possible, but probably should not be ruled out without research.


#14

My strictly gut feeling is that while this seems distasteful the dealer may be on solid ground. Then again, I’m not familiar with state law there.

It’s not uncommon for someone to drive off in a new purchase and have the game plan change due to any one or more of a number of reasons. There’s often a “contingent upon…” often buried in the legalese.
This is the risk one runs when going through dealer financing and not having everything etched in stone before leaving the lot.

The only suggestion I can make is what others have said; contact the AG and see where that leads.


#15

.The complicated part is that you have two states involved. You bought it in NJ, but paid for MD registration and taxes? I guess that isn’t too uncommon back there. The dealer was just fine with that and knew how to do the paperwork?

The problem is which state’s laws apply. The purchase was in NJ, but you paid to get it registered in MD. Is that right? So it seems the laws of either/both states could apply. Whether he can withhold the tags seems like a MD issue, as they are the state you have it registered in. But the sale was in NJ, so their laws on auto sales would also apply. Ugh. This additional complication may be why they think they can jerk you around. But it sounds like you need some legal advice on which state’s laws apply.

Good luck straightening this out. I’m very happy with our Hyundai and the dealer. Maybe you’ll have a closer one that’s a gem.


#16

You don’t have a car problem. You have a legal problem. None of us here are qualified in law. You need to speak with a lawyer. ASAP. A simple letter from a lawyer just might be all you need to resolve the problem.

Should you at some point develop a car problem, please post here and we’ll be happy to offer our expertise. I doubt if a legal forum would be able to.