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Car dealership sales tax mishap

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jsquared90

Junior Member
I recently purchased a used vehicle with a trade in. I live and purchased the vehicle in Illinois. We owned the trade in vehicle outright, and the point of the visit to the dealer was to get some cash back from the trade in, as we were ultimately trying to convert credit card debt into a lower interest rate car loan while getting a vehicle more appropriate for our family. We signed the contract for the car, that specified the sales tax and $17K that we were to get back in the form of a check. They told me that they would mail the check out next business day. A few days later, I get a call from the dealer saying that they did not collect enough sales tax (they miscalculated) and that they would need to deduct the difference from the $17K that they owe us. What are my legal options?
 


Zigner

Senior Member, Non-Attorney
I recently purchased a used vehicle with a trade in. I live and purchased the vehicle in Illinois. We owned the trade in vehicle outright, and the point of the visit to the dealer was to get some cash back from the trade in, as we were ultimately trying to convert credit card debt into a lower interest rate car loan while getting a vehicle more appropriate for our family. We signed the contract for the car, that specified the sales tax and $17K that we were to get back in the form of a check. They told me that they would mail the check out next business day. A few days later, I get a call from the dealer saying that they did not collect enough sales tax (they miscalculated) and that they would need to deduct the difference from the $17K that they owe us. What are my legal options?
Assuming that they are correct about the miscalculation (which you don't deny):

You could take the additional money for the sales tax in to them and then they could write you a check for the full $17k. I have to admit, that seems a bit silly, but it's an option.

Either way, you will need to pay it.
 

jsquared90

Junior Member
Assuming that they are correct about the miscalculation (which you don't deny):

You could take the additional money for the sales tax in to them and then they could write you a check for the full $17k. I have to admit, that seems a bit silly, but it's an option.

Either way, you will need to pay it.
So even though they presented the deal with the miscalculated sales tax as a tax savings in a manner of false advertisement? I specifically asked them if they were sure about the sales tax and they said yes. They used the incorrect sales tax info as a selling point. I assume that is false advertisement at the very least. If I have them on record admitting that, do I have a case?
 

jsquared90

Junior Member
How much money are we talking about here?
About $1000 - $1500 is my guess. When they pitched the deal, they said "although you may be able to get $30K from Auto Trader for your trade in vehicle, we can offer you $26K right now + $2500 in tax savings since you will be buying a vehicle from us". It is sounding like they were wrong on the $2500 in savings, because they did not factor in giving me back $17K in cash.

So does this mean any salesperson can lie about things like tax savings? Or provide erroneous information on how much you are liable for sales tax in a transaction? With zero consequence?

If I have no legal options, what would you do? Report to the BBB? Provide a review to cars.com?

Thanks again for your help. I truly do appreciate it!
 

justalayman

Senior Member
so, tell them you want to rescind the deal since the figures on the contract are incorrect and you would not have accepted the deal with the correct numbers. Other than that, it sounds like an error, not a sneaky tactic, especially since they do not get to keep the sales tax anyway. It is forwarded to the state.
 

davew128

Senior Member
So does this mean any salesperson can lie about things like tax savings? Or provide erroneous information on how much you are liable for sales tax in a transaction? With zero consequence?
Did you bother to check on the sales tax laws yourself? Do you always obtain tax law information from a SALESMAN?
 

jsquared90

Junior Member
so, tell them you want to rescind the deal since the figures on the contract are incorrect and you would not have accepted the deal with the correct numbers. Other than that, it sounds like an error, not a sneaky tactic, especially since they do not get to keep the sales tax anyway. It is forwarded to the state.
Thank you very much for your help. So one more question and then I will stop bothering you... legally speaking... are the obligated to honor my request if I tell them I would like to rescind the deal? Not sure how that works with plates already transferred, etc... They are basically using my $17K check as hostage...
 

justalayman

Senior Member
legally speaking... are the obligated to honor my request if I tell them I would like to rescind the deal? Not sure how that works with plates already transferred, etc... They are basically using my $17K check as hostage...
They have a few choices

1. rescind the contract
2. complete the contract as written
3. argue there is a mistake and it should be allowed to be corrected without recourse by you




the first 2 are obvious

the third one is the really messy one. If they want to attempt to enforce the contract with an amendment, if you do not agree, the only choice is this goes to court. who would file is also up in the air but given they have your money and will likely intend on keeping the additional amount, it would likely be you.
 

Dave1952

Senior Member
Mistakes happen but you are suggesting fraud. You believe that they routinely use the wrong tax tables to make their deals look better. Am I right?
If that's the case you should talk with the State AG. They handle consumer complaints. If this dealership has a bunch of "tax" complaints then they may take notice
 

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