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sounds like a "buy here pay here" place. shiesty places many times that prey on poor and unknowledgeable people...
while there's a potential for fixing this, i think the outcome is skewed in the 'dealers' favor. if she doesn't have any paperwork, he can generate anything he wants whenever he wants to justify whatever works to his benefit legally..
definitely calmly talk to the guy about it, see what, if anything can be done. being that it's throwing a code, and the laws in your area, it might work to her/your advantage.
i don't know how your family is financially--obviously, she didn't have the money, but if someone in your family is financially capable and willing to help with a no-interest loan, another consideration is to 'pay it off' (we can agree it's not worth it, but she made an agreement on it's worth, so it's past that point already), and then immediately sell it off at a loss, and she'll need to eat the difference...
i give her credit for attempting to handle things herself, now take the opportunity to teach her the proper way to handle it-- what paperwork she should expect, if she doesn't know much about cars show her a shop you trust that she can have a vehicle taken for a pre-purchase inspection--the vehicle she got is a perfect example of a vehicle that wouldn't have passed this step(many places around me that i know of doing pre-purchase inspections would have outright told her not buy it simply off the price and mileage, before they even got it into the tech bay), and walk her through the deal-- if a dealer outright refuses to allow for a pre-purchase inspection, or ever seems to start fudging numbers, or gets unnecessarily pushy, the best thing she can ever do is walk away. there's too many cars for sale everywhere that would suit her needs to ever need to deal with that.
contrasted with the expectations of 20 years ago, it's much more common for women to do the entire deal on a vehicle these days. some places respect that, some places still operate like it's 1960, she's got to find a place that respects her.
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