I just bought a new car and traded in a 15 year old car. The sale completes in two days. Although the dealer gave me $2700 for my old car, I think he’s really would have taken $1700 off the purchase price for cash. This means, he’s really only giving me $1000 for my car. (It’s a diesel. If it were a gas car, it would be worth $500). My son has expressed an interest in my old car as his spare, so I’m about to approach the dealer and ask him if he would take $1000 more in lieu of the trade-in.
But it got me to wondering … What happens if the trade-in vehicle (which has no collision insurance) is in an accident between the negotiated deal and the actual exchange of new-for-old?
Maybe I’m naive, but I’ve never heard of a car sale taking two days. All the deals I’ve ever made have been done the same day. I didn’t even know that was possible. Can someone still come in and buy the new car out from under you?
New cars often require prep before sale. You don’t always test drive the one you plan to buy. Most dealers keep one car for that, so the rest don’t get extra mileage put on them. That one may be sitting on a back lot, still covered in plastic. It needs to be cleaned, washed, tested, checked out by a mechanic. Nobody will buy that particular car but you, but that doesn’t mean it’s ready to drive off the lot.
And the answer to the OP is yes. If something happens to your car in the interim you’re SOOL. It’s happened to me.
Go for it. Until you’ve all signed the contract, you can renegotiate as much as you want.
Clearly, you wouldn’t get the previously-agreed-upon deal, since I’m sure it requires the trade-in vehicle to be in essentially the same condition it was as when the agreement was made.
Basically, you’re asking what happens if one party doesn’t go through on a contract. If the other party can show damages, then you have to make them whole. If you haven’t gotten the new vehicle yet, I doubt there are any damages. You either renegotiate a new, lower value for the wrecked trade-in, renegotiate without it, or both walk away.
I have except for one time when they had to order one from another dealer, because I wanted certain things on it ,and that did take a couple of days, so I did have the trade-in for longer. I forgot about that one.
I’ve wound up with cars that had to be manufactured at the factory to get the items I wanted, and that took months. You don’t see that very much any more because almost everything is bundled into packages and those few variations can almost always be found on some dealer’s lot. It used to be very common, especially for foreign cars.
I thought the couple of days of prep was standard any dealership large enough to have inventory. I’m surprised that you would walk out the door with something you tested.
OP here. As an FYI, to buy back my trade in (and pay for the new car with cash), they wanted more than I was willing to pay so I told them the old car would return on Thursday when I pick up my new car.
The red tape at the RMV in Massachusetts is never a same-day process. I had to contact my insurance company who had to stamp my registration application. Thence a trip to the RMV by the dealer’s runner, etc, etc. In my case, I negotiated the deal on Sunday and Monday was a holiday. I was the one who requested four days because I use my own bank for financing and they were closed until this morning.
Dealer prep usually takes a day. However, I always drive the car that I intend to buy. I had a car buck once on a test drive. The dealer told me that the car hadn’t been prepped and that a tune-up would take care of the problem. After purchase, the car ran flawlessly for four months and then started having minor problems frequently. Ever since then, if there is any problem whatsoever on the test drive, no matter how minor, I move on to another car.
Who has possession of the trade in vehicle during the 2 days? If you, then you are certainly responsible for any damage that occurs and it may affect the deal. If the dealer has it it gets a little murkier. It would depend on things like negligence, date on bill of sale, etc.
This very thing happened to me in 1987. I had just negotiated a desk on a new Porsche 944, trading in my 1986 Toyota MR2. I was on my way to the dealer to drop of my trade and pick up my new Porsche and I was rear ended. The accident squished an already tiny car. The damage was repaired and the car accepted for trade, but I had to come out of pocket with another $2500 to cover lost value of the Toyota. Insurance covered the repair, but I’m wondering if insurance should have also covered the diminished value. I hues not because they didn’t, but I was young and wanted my new Porsche, so I didn’t sweat the details. Yeah, I was young, young and stupid.
It would depend on the form of the agreement between the buyer and seller, whether the jurisdiction has adopted certain portions of the Uniform Commercial Code, and if not, how the law of the jurisdiction treats executory sales and requirements for perfecting title.
Look up res perit domino (“the thing is lost to the owner”, or more idimatically, “the owner bears the risk of loss”), or if you’re feeling adventurous, this law review article by Professor Williston (discussing the law as it stood pre-UCC):
I was specifically addressing the case where the dealer (seller) already had possession of the trade-in vehicle, even if the sale had not been completed - for example, I left the trade vehicle with the dealer while he prepped the car I was buying. Even if the final sale is not completed until delivery of the purchased vehicle, the dealer is obligated to at least “ordinary care” standards in regard to the trade. If the dealer is negligent in storing my car they can be held liable for damage incurred due to their negligence.
Yes, but that doesn’t affect the underlying sale. The negligence claim would exist independent of the sale, because that would be a trespass to chattel.
For what it’s worth, I had a crappy trade-in, but it was running when they agreed to give me $500 for it. It fell apart on the way to the dealer to pick up the new car, and I had to tow it to the dealership. They still took it though, no questions asked. Not sure how that would have changed if they had offered me more for what they thought was a car in good shape.
I had something like this come up as a question. I traded in my old car, bought a new one. I was heading out on vacation, abck in 2 weeks. The dealer wanted to close the deal, get it on the books before month end. So I signed and paid for a car with the intent to pick it up on return from holidays, so why bother registering it until then?
My father-in-law, the insurance salesman, says “who pays if it’s damaged on the lot?” God question. It’s my (brand new, exensive) car and the dealer’s insurance would only kick in if they were negligent. If a hailstorm came along, or a plane fell out of the sky onto it, or some kids broke into it and hotwired it, well, that’s me parking my new car at the dealer’s lot. My problem, my insurance. So I insured it right away.
In the OP’s case, the answer is logical. You contracted to deliver a car in X condition, or X value. You can’t deliver, you make it right. The dealer can be a dick about it, or more likely try to accomodate you; but you agreed on a price of $Y worth of trade-in you meet that price.
Two contracting parties can re-arrange the contract to meet circumstances however they want, provided they both agreee. If they don’t, that’s what courts are for.
They might be happy to take cash of $Z<$Y since cash simplifies their life, but they don’t have to. In a lawsuit, no judge is going to make you find an identcal car. There likely will be no penalties if there is not deliberate intent to ruin the contract. However, he will fix a dollar amount that is fair to both parties.
There are never penalties for breach of contract, unless liquidated damages are specified by the contract. To claim “penalties” you need an independent tort.
I bought a new car, and planned immediately to go away for 2 weeks. I didn’t want to leave a new car in an outdoor parking lot for that time, so the dealer loaned me my old car - papers were already done, so he took the risk. I thought it was generous of him.
Also, and this did surprise me when i bought a new car, there is a clause in the contract that the dealer can void the contract after you’ve signed it. It doesn’t seem legal to me, but IANAL.