Full question:
My friend bought a Volkswagon Jetta from a dealership in Boise. She bought it for $10,000 with zero percent interest per signed contract. Then the dealer said that she had to pay 4.9 percent interest after the contract was signed because of her credit score and because they said she worked a month and a half less than they originally thought. When she asked if they can do that they said yes because of her credit history and convinced her to sign the new contract. Can they do that? Is that against the law?
- Category: Contracts
- Subcategory: Recission
- Date:
- State: Alaska
Answer:
The legality of the dealership's actions depends on various factors and may require a court's determination. Key considerations include whether the dealership made an innocent mistake regarding the employment length and if they should have known about it. A common practice called yo-yo financing occurs when a dealer delivers a car before finalizing the contract and later changes the financing terms. This practice may violate unfair trade practice laws in Idaho.
In Idaho, a contract can be rescinded for reasons like fraud, duress, or mistake. To rescind a contract for fraud, it must be shown that the deceptive party acted with wrongful intent. Rescission restores both parties to their original positions before the contract. Specific performance is another remedy that compels a party to fulfill their contractual duties, but it's only available when monetary damages are insufficient.
Often, customers may not qualify for the initial financing terms and may be asked to sign a second contract with different terms. If the dealership backdates this second contract, it can violate finance disclosure laws and misrepresent when the consumer is obligated to the new terms. Idaho law prohibits misrepresentation regarding financing qualifications, particularly in yo-yo financing scenarios (Idaho Stat. § 48-603). Dealers must not mislead consumers about why financing cannot be completed as originally offered.
In summary, if the dealership misrepresented the financing terms or pressured your friend into signing a new contract without proper justification, they may have violated Idaho's unfair trade practices laws.
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.