From: dman@netcom.com (Dallman Ross)
Newsgroups: ca.driving
Subject: Re: Contract cooling off period
Date: 30 Dec 92 07:20:39 GMT
Organization: Netcom - Online Communication Services  (408 241-9760 guest)
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Thomas Marvan (tmarvan@sdcc3.ucsd.edu) wrote:

: I just bought a new car and, having signed and driven off in my new
: (used) Ford Escort 1990, I went over the papers in the calm
: atmosphere of the local Denny's and realised that I'm not quite
: happy with the numbers.

: Basically, because I agreed to pay over a two year period, it's
: gonna cost me extra.  I now realise that I could almost pay the
: whole thing off straight away which would save me over a thousand
: bucks.

: Is it easy enough to go back and change the contract without
: penalty?  I know in Australia there's a ten day cooling off period
: within which if the purcahser chooses, he may return the car and
: cancel the contract without penalty.

: Are there similar cooling off laws in California (I bought the
: vehicle from a reputable dealer, BTW)?


My qualifications for my answer: from 1977 to 1980 I sold new and used
cars, and was briefly the finance manager (like the guy that wrote
up your contract and negotiated the terms with you).  I am currently
in my final year of law school.

That said, I have not looked any of this up, and the laws in this
area are prone to change all the time.  So this should not be advice
that is relied upon without consulting further sources.

The "cooling-off period" in consumer contracts usually applies only to
items you buy in your home.  Example: a vacuum-cleaner salesman shows
up at your door and sells you an $800 system.  3 days, is the cooling-
off rule.  Statutes in California extend the time that you can back
out of a contract in certain other specified areas, such as contracts
for repair work by certain licensed professions.  This period is
also 3 days.  But car sales are not covered by any of these specific
statutes, as far as I know; and if you consummate a deal at the dealer-
ship under fully-disclosed terms and take delivery of the vehicle,
the contract is arguably binding.

That said, there are usually arguments to be made that strengthen your
position, and deals can sometimes be cancelled even when there is
araguably not a good reason for the dealer to do so.  Sometimes the
dealer will do this out of good will.

However, consumer loans such as auto loans can always be prepaid with
no interest penalty.  You don't need to cancel any contracts.  Just
read the fine print of your installment loan agreement.  You can go
to the institution and prepay the whole thing.  At most, there might
be a $25 or $50 minimum underwriting "fee" that you would pay.

If it's just the interest rate that you're unhappy with, and if you
have good credit and stable employment and the dealer financed the
car for you through his (her) bank, you may also be able to get the
dealer to renegotiate the terms for a better rate.  The dealer would
rather finance you at a lower rate than have you pay off the balance,
since s/he makes some money on the financing.

Once again, this is all opinion, not legal advice.  If it happened to
me, my reaction would be that I didn't need to worry about reneging
on any agreements.  I'm sure you can pay off the loan whenever you
want.

I will email this, as well.

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