Tips on Buying Cars: Can I cancel a signed contract without penalty if I have not received the vehicle?, insurance cards, government reimbursement

Question
We just purchased a new vehicle yesterday using the cash-for-CARS program, but since the car is being shipped from out of the area, we have not taken possession of our new vehicle.

We left our trade-in "clunker" with the dealer, along with the title, registration, and insurance cards he would need to get his 4500 government reimbursement.

We also signed a contract, including financing through the dealership.  The dealer told us we would need a signed contract so we could lock in the CARS deal before it runs out of funds.

However, after arriving home, I've realized the dealer has not been honest with us on several points (nothing illegal, since none of the lies appeared in the contract) and I would like to cancel my contract and take my business elsewhere.

Am I under any obligation?  Or can I cancel the contract, void the financing, and receive my clunker back?  Also, is there any way of making sure the dealer doesn't get credit for my clunker (so that I'll be able to use the credit elsewhere)?

Thanks!

Answer
Emily,

Thanks for your question.  You can cancel the contract at any point unitl you take delivery of the new vehicle.  You are entitled to any and all funds back, and the title to your vehicle back.  Now keep in mind that dealers are required to write "junkautomobile.gov" on the front of the title which will deface the title.  If they have done this, you will need to get what is called a statement of fact/correction so that you can get a new title.  

Hope this helps.

Thanks - JB