COST; everything has a price. I find it so interesting that a lot of people automatically say, "get a lawyer!" They cost money so don't throw money at a problem. I work with many attorneys and can tell you that most will tell you, "oh, yea you have a case" just to to get your money (unless you have a family member that's a lawyer, and even then...) You have to look at cost-what are you going to pay for either information (from an attorney) or to fight it vs what is the dealer going to have to pay to fight you. For instance, the dealer probably would have the finance bank withdraw the loan and therefore no loan, no deal. But if you paid cash and the dealer came after you, they would have to take you to court (how much would it cost them) or just get a debt collector after you (that's what they would probably do). Eventually you could have taken them to court to get your credit cleared up.
My suggestion would have been to re-negotiate and discuss what costs you would each incur then settle on a fair dollar amount and both acknowledge mistakes were made. If the deal still didn't seem fair then you estimate what it would cost you to fight it and see if it would be worth it (most likely not).
The only ones who make out in a court battle are the attorneys! Unless the fight pertains to a very large sum of money or your freedom, you can typically negotiate on your own. You are rid of the dealer and can now find a better deal somewhere else without worrying.