Lindsay Kuhn said the offer 5 Star Auto Sales gave her and her boyfriend for the used 2003 Volkswagen Jetta seemed too good to be true.
After calculating their budgets, they determined they could afford a monthly car payment up to $250, and when they walked onto the preowned car dealership lot a few weeks ago, they asked if any vehicles were available for that monthly rate or less.
“They said, ‘yes,’ and went up to $265,’” said Kuhn’s attorney, Jimmy Brown, of Brooksville. “And she said, ‘OK, I’ll come up with the extra $15 a month.’”
Kuhn said that, for the verbally agreed price of $265 a month, 5 Star Auto Sales would also give her $2,200 for her trade-in vehicle, and the pre-owned, $5,700 Jetta could be hers. But Kuhn and her boyfriend would first have to put down $1,000 toward the car purchase to hold the sale, she said, $500 of which they would have to surrender if they decided to back out of the deal.
And if they agreed to put the $1,000 down right then, Kuhn said, 5 Star Auto Sales said she would get free oil changes on the Jetta for life.
“That was already in the Volkswagen deal,” Kuhn said about the lifetime oil-changes. “They didn’t even let us test drive or anything, they just said, ‘Put down $1,000 and the car is yours.’”
A March 23 receipt for a partial non-refundable deposit toward the purchase of the vehicle shows that Kuhn’s boyfriend did just that, and that he understands, acknowledges, and agrees if he fails to pay 5 Star Auto Sales the remaining down payment (specified as $0) by the above date, then half of that $1,000 “shall be forfeited.”
But Kuhn said the only reason her and her boyfriend agreed to put $1,000 down, and sign the nonrefundable $500 deposit form, was because 5 Star Auto Sales told them, and not in writing, that the monthly payments on the Jetta would be $265.
“When they went back the next day, $265 had been changed,” Brown said.
Now it was $282 a month, Kuhn said.
“They said, ‘Wait a minute — it was $265,’” Brown said. “There was a disagreement on it, and I guess (5 Star Auto Sales) was saying, ‘No, we never said $265. We always said $282.’”
Kuhn said she could not afford to pay $282 a month — initially she could only afford a car for $250 a month but reluctantly agreed to $265 — and now she wanted her deposit money back. But it was too late, Brown said: the young couple was already locked-in for having signed the nonrefundable deposit form, and backing out of the car purchase now would entail breaking contract, and they’d have to pay the company $500.
“Lindsay and (her boyfriend) came to me and said, ‘Is that right?’” Brown said. “And I looked over the contract and I said, ‘No, that is not right.’”
“There’s a reason why contracts should be drafted by lawyers.”
Brown, who is now representing Kuhn in a pending civil suit against the company, said he’s seen situations like this before in his 37 years of practicing law.
“There’s a line where you can insert a figure saying, ‘If you don’t pay this deposit before this timeframe you forfeit $500 to (5 Star Auto Sales),’ and the amount written in that line by (5 Star Auto Sales) is zero,” Brown said. “From a common sense standpoint, if you fail to pay $0 before such and such date, then it’s, ‘We’re keeping this $500 anyway, so sue us.’”
This isn’t the first time a disgruntled customer has tried to take the company to court over the nonrefundable deposit form, said 5 Star Auto Sales Manager John Hoogasian.
“It’s a safety net for us,” Hoogasian describes the deposit. “We’ve had people in the past do the same thing, and someone tried to get a lawyer and whatnot, and the document I’ve provided is a binding legal document, which says basically in three places that if you’re going to walk away you’re going to have to pay $500.”
“It’s just to protect us,” Hoogasian added. “To be for real, people lie.”
Everybody has the option to change their mind, Hoogasian said, and if a customer puts that deposit money down, they can apply it to any other vehicle on the lot for 90 days.
But taking a car off the market to hold it for a customer can be costly if the deal never goes through, Hoogasian said, which is something many customers don’t sympathize with.
“People don’t care what we’ve incurred, or the time and effort of staff,” Hoogasian said. “I may have 16, 18 hours to get one loan for somebody jumping so many hoops, and that’s the nature of the business to try and keep customers happy, but not all customers are going to be happy.”
Kuhn and her boyfriend were among the unhappy ones, and they protested recently outside of the pre-owned car dealership. Kuhn said she had to wait two weeks before she could receive the other half of her deposit, which was $500, or about a week’s pay. But when she went back to the dealership, she said, she was told they had a trespassing warrant against her, and had her removed from the property.
“That’s when he waved the cash and said, ‘I’m going to have a steak dinner with your money,’” Kuhn said. “Because me and my boyfriend are young, they tried to take advantage of us. I don’t want to happen to (others) what happened to me.”
Hoogasian said the young couple is way off base with what they’re saying about payments being altered, since they never went into the finance office to sign a payment contract prior to putting a deposit down to hold the vehicle.
“How could your payment change if you never sat down and saw a contract and signed a contract?” Hoogasian said. “I work a deal right on this computer screen, and it’ll pop up what their monthly payments are going to be. It could change if you put a two-year warranty in there or something like that. They never even signed anything. They don’t have any copies. The paperwork is done in the finance office.”
But that’s where the problem lies, Kuhn said: the rate Kuhn says she was told by the dealership, and permitted to sign a deposit for, is not the same rate that ended up on paper.
“I don’t think they were being truthful with us from the beginning,” Kuhn said.
In essence, Kuhn and her boyfriend signed a binding contract agreeing to put $1,000 down on a car with no documented monthly pay rate. And if, for reasons anticipated or unanticipated, that monthly rate were to fluctuate $204 more a year beyond what someone believed or was lead to believe they were going to pay, as appears to be the case for Kuhn, the situation narrows drastically between one of two options: take the deal and leave in a car, or pay $500 and leave empty handed.
“What we lawyers so frequently do is encourage people to read what they sign, and if there is a question in their mind, then contact a lawyer,” Brown said. “It’s a lot less expensive to ask a lawyer in advance then try and have a lawyer straighten something out in the backend, and in Lindsay’s case I don’t think she did anything wrong, but I hope (5 Star Auto Sales) will voluntarily refund Lindsay her $500.”
“If not, then we may very well see them in court.”