Non-existent car deal on credit report?

June 19, 2006 10:45 AM

Does backing out of a car deal affect your credit?

My boyfriend recently visited a car dealership with his brother, with no intention of buying a car. [The trip was for his brother to look at cars.] Somehow, this ended with my boyfriend signing a "Retail Buyer's Order Form" on a car that he was going to extended test drive. Still, he had no intention of buying the car. However, in the non-reality of the car deal, this is what was going to go down:

My boyfriend's car would be offered for trade-in. The down payment would be 300 additional dollars. The dealership told him the "down payment" was only added to give him a loophole to get out of the deal--if he didn't like the car, he could simply not pay the down payment and the deal would not go through.

Upon returning the new car to the dealership the next day, they would not give him his car back. They told him he hadn't tried hard enough to get financing [since he hadn't tried at all] and they couldn't give his car back. Finally, his older sister and brother-in-law came to the dealership and told them firmly to give him his car back. They finally did, after trying to talk all parties involved into buying the car.

Important notes: The financing was never final, the down payment was never paid, my boyfriend was lied to--a lot.

So we now have a cancelled Retail Buyer's Order Form. I have been told that because he backed out of this deal, it can go on his credit report negatively. I am hoping that this makes no sense, but don't know enough about credit to know the truth.

If it does, in fact, go on the credit report, is this the type of thing he can talk them into removing, or is this just a mistake he has to learn from that can't be corrected?

Thanks in advance.

posted by starbaby to grab bag (21 comments total)

I agree that it makes no sense (to me). In my personal experience, securing financing occurs before signing the buyer form.

Since he never secured financing, I'm not seeing how it could impact his credit score. There was no borrowing that took place. Maybe someone else could answer with authority on the subject, though. Maybe this is a new scam with complexities that I'm mssing.
posted by empyrean at 11:02 AM on June 19, 2006

Here's where I get confused--although the financing was never secured, they did print him out a payment offer. He was given a print-up stating his payments would be $279 a month, given his credit. [He brought it home, I saw it.] I don't understand how they even gave him a quote without the financing going through.

I'm hoping you're right--it shouldn't be on his credit if he didn't borrow anything.
posted by starbaby at 11:06 AM on June 19, 2006

Many, maybe most states (assuming you are in states) have a 48 or 72 hour contract cancellation law that applies specifically to big ticket items like cars, etc. You might want to check if such a law exists in your state. It should give you the legal cover you need to back out of a car deal in 24 hours with no negative repercussions.
posted by COD at 11:09 AM on June 19, 2006

I'm not familiar with how a Retail Buyer's Order affects your credit. However, here's the truth of the matter: the salesperson who told you that this was the deal for an "extended test drive" was full of crap. You should at no time have to state you intend to buy a car in order to evaluate it. I can understand the dealership wanting some sort of collateral, but in reality if they let you go home with the car they expect you'll buy it (this has been mentioned on AskMe before). In your boyfriend's case it wasn't to "seal the deal" -- if he'd signed the paperwork, the deal was as good as done for them.

I would bet that the dealership will not report anything due to the fact that it will only shed light on their shady practices. In reality, the dealership could have attempted to claim that they sold him the car with good faith that he would secure financing. By signing the paperwork, he agreed to buy the car.

I would recommend letting the dealership know that you will contact the Better Business Bureau if they do any sort of credit reporting, and I would recommend you do it anyway. This sort of high-pressure, lying about paperwork, deal is the lowest tactic in car sales.
posted by mikeh at 11:10 AM on June 19, 2006

There is a former policeman who works with me, and his wife is still with the force. I immediately asked them, and they told me we [Arkansas] have a 72-hour one. They said that's even if he *had* actually bought the car. When he claimed this to the dealership, they told him that only applied to buying cars online. Obviously, this is a lie.

That's how I plan to get it *off* his credit, if it actually goes on. Assuming, of course, I can actually find this law.
posted by starbaby at 11:11 AM on June 19, 2006

i wouldn't think it would affect it at all, but give it a couple months and have him order his credit report for free online. www.annualcreditreport.com. he is entitled to a free credit report once a year from each of the credit bureaus. sounds like a good reason to take advantage of that, but he should probably go ahead and do all three now or within the next few months if he wants to be absolutely sure.

if for some reason it does show up, it would be easier to dispute now rather than later. even if it just shows up as an inquiry i would probably dispute it, or atleast make a notation.
posted by domino at 11:14 AM on June 19, 2006

mikeh--this is what I told him. I wasn't consulted in any of this, and he has his younger brother trying to talk him into it. So the dealers were dealing with a 23-year-old guy and a 21-year-old guy. As soon as his 30-year-old sister and her 40-ish husband got there, they changed their tune. That's enough right there to piss me off.

He also threatened to call the Attorney General's office on them [at my behest], and they said it wouldn't do any good because he had agreed to buy the car.

[I'm not claiming my boyfriend's actions were anything but stupid in this situation, I am just trying to help him learn from them.]
posted by starbaby at 11:14 AM on June 19, 2006

Needless to say, your boyfriend should write letters to the BBB; whatever state/county agency oversees/licenses the car delearship; whomever runs their financing; whichever manufacturer they sell for; and local media outlets.

Make life hell for them.
posted by nathan_teske at 11:15 AM on June 19, 2006

His case might not be enough to open a case with the state Attorney General, but it might be enough for them to open a file and start gathering evidence. My mom actually volunteers at our state AG's office and there are a number of open cases that they collect evidence for until there's a pattern of fraud or negligent sales practices. Contact the BBB and the AG just in case, it might not help him but others down the road may appreciate it.
posted by mikeh at 11:17 AM on June 19, 2006

Shouldn't be a problem for him. Sounds like a real hard sell tactic though. I'd have called the police ASAP and claimed that the Dealership had stolen his car. In fact I'd have used the manager's phone to do it. Gahd i hate car salespeople. Lowest of the low.
posted by Gungho at 11:17 AM on June 19, 2006

They're likely just bluffing. Even so, I'd write the BBB about them, and if they try to ding his credit report at all, dispute it and contact a lawyer.

Unless he signed all of the necessary paperwork, he doesn't owe them squat. I've heard of this before, it's nothing more than a high pressure sales tactic.

Tell the dealership to sod off, and inform them that you will never buy a car from them and will inform everyone you know to not consider buying there as well.

And keep the boyfriend away from car dealers in the future. :-)
posted by drstein at 11:19 AM on June 19, 2006

Oh--just in case people are misunderstanding, the dealership is not telling us it will go on his credit. Other people we know have mentioned this to us--though they weren't sure because I am sure it depends on how far the deal gets before he backs out.

[And I definitely intend to keep my boyfriend away from car dealerships. I have kept a copy of this "Retail Buyer's Order Form" to remind him of this mistake.]
posted by starbaby at 11:24 AM on June 19, 2006

I have nothing else to add to the situation, other than -- man is he going to regret this. =)
posted by empyrean at 11:27 AM on June 19, 2006

I've had some bad experiences at car dealerships on both sides of the river. This wasn't at the hyundai one was it? I remember them being really shady.
posted by bigdave at 11:39 AM on June 19, 2006

No, it was Ford, actually.
posted by starbaby at 11:46 AM on June 19, 2006

I have kept a copy of this "Retail Buyer's Order Form" to remind him of this mistake. - starbaby

To me, this sentence sounds like you don't think he'll learn from his mistake on his own. Don't you think this whole ordeal and the pain in the ass it creates for all of you is sufficient for him to be more cautious in the future? I understand you're frustrated and likely upset, but it's unlikely there's any reason to lord this over the guy.

Maybe I'm reading you wrong, but that line really threw up red flags for me. Be thoughtful about how you bring this up with him in the future. He's probably embarrassed, and if you bring it up again and again, it will make him feel bad but probably not accomplish anything positive.
posted by raedyn at 1:30 PM on June 19, 2006

Okay, let's put it this way:

When he came home from the dealership, after finally getting his car back, he remarked how when he finally is able to afford a new car, he will be using these guys because they were going to give him "such a great deal!"
posted by starbaby at 2:03 PM on June 19, 2006

They were completely willing to screw him over by telling him he was doing an extended test-drive and then having him sign an agreement to buy the car. Does he have any clue how close he was to being in deep financial trouble? If they're pulling this kind of crap I don't even want to know how many "courtesy charges" and other schemes they would have tried to pull after he came back in wanting to buy.

If he thought it was a good deal due to the amount taken off the sticker price, you might want to introduce him to the idea of comparison shopping or have him ask friends and family what they spent on their vehicles as opposed to the sticker price. He'll probably find out that he was, in fact, being given a horrible deal since it's common to bargain at least 10% off the sticker price, even more when cash back deals or financing deals are on the table.
posted by mikeh at 2:09 PM on June 19, 2006

Did he give them his social secutiry number at any point?
posted by 4ster at 7:14 PM on June 19, 2006

I cannot say for sure, but I would assume yes, since I am under the impression they ran his credit and everything.
posted by starbaby at 5:07 AM on June 20, 2006

COD writes "Many, maybe most states (assuming you are in states) have a 48 or 72 hour contract cancellation law that applies specifically to big ticket items like cars, etc. You might want to check if such a law exists in your state. It should give you the legal cover you need to back out of a car deal in 24 hours with no negative repercussions."

Mind the details, most of these laws only apply if you sign the contract in your home. If you sign the contract in the regular office of the business there is no take back.
posted by Mitheral at 7:12 AM on June 20, 2006