Under Arizona contract law and Arizona consumer fraud statutes, it is a breach of contract and a violation of the law (fraud) to make someone pay any money to the dealership to get your car back (the car you traded in), if the dealership is unable to perform under the sale/purchase contract. The dealership is the party to the contract who assumes all risk of not being able to get you financed. This is a common problem in Arizona -- dealerships allowing customers to leave the dealership, then making customers either return the car or contacting customers and forcing the customers to accept a much higher interest rate or different contract terms, under threat of not getting the trade-in back.
Answered on Oct 25th, 2011 at 2:16 PM