If the dealer breached the contract or misrepresented the condition of the vehicle, then you can take legal action. If you signed a binding arbitration agreement, then you must first try to resolve this with the arbitration.
Arbitration is a process whereby the dispute between the vehicle manufacturer and the consumer is resolved by a neutral third party, an arbitrator. In California, many manufacturers offer a California state-certified arbitration program.
There are some benefits to arbitration if something goes wrong for you alone because it can be easier and faster to navigate than going to court. That being said, if you would prefer to have access to class action lawsuits, then opting out might be the better option for you.
Under Section 171.001 of the TAA, written agreements to arbitrate are generally valid and enforceable in Texas.
Arbitration might be the right choice for some cases. Limited discovery rights and costs might be useful when less is at stake. Arbitration might feel less adversarial, which could be an advantage where ongoing relationships are hoped to be preserved. Arbitration lends some confidentiality.
If neither party appeals the decision, it will be binding, like an order by a judge. However, a party unhappy with the arbitrator's decision can request a new trial before a judge.
Arbitration might be the right choice for some cases. Limited discovery rights and costs might be useful when less is at stake. Arbitration might feel less adversarial, which could be an advantage where ongoing relationships are hoped to be preserved. Arbitration lends some confidentiality.
If one party feels the decision is erroneous, there is very limited opportunity to correct it. There are many cases in which arbitration can become more expensive than court proceedings. Quality arbitrators can demand substantial fees that would not apply in court.
In some instances, you may be able to sue if you signed a valid arbitration agreement. While courts generally favor arbitration agreements, they will allow you to file a lawsuit if either you didn't understand your rights or your claims fall outside the arbitration provision's scope.
As a general rule, only strong evidence of duress or fraud are sufficient to invalidate an arbitration clause.