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Bought a car, had it for 3 weeks, lender wants to back out because I hav'nt filed last 2 years of taxes. Can they switch /

Roanoke, VA |

Have had this car for 3 weeks and received a call yesterday from the salesman saying since I hav'nt filed this year or last years taxes the lender will not back the loan. The dealer will but it may be higher payments. I have a contract, have made my down payment,and have been driving this car for 3 weeks. Do I have any bargaining power?

Attorney Answers 3


What they are afraid of is whether or not you end up with a Tax lien being filed against your assets, which can include your car. FILE YOUR TAX RETURNS! There is no reason not to have done so, and every year you delay you are facing potentially larger and larger penalties.
As to your contracts question, you need to have 'loan approval' so the loan would be conditional upon such criteria as they specify. If you cannot get a good loan, then you need to accept the higher-payments loan.
Bottom line- file your taxes, get copies to the lender, and be done with it.

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It is never a good idea to ignore your tax filing responsibilities. Are you aware that there is a failure to file penalty of up to 25% of your liability. And this is in addition to the failure to pay liablility. Why anyone would not at least file a return timely even if they cannot pay one cent is beyond me. That is just giving money to the government.

Hope this helps.

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Mr. Fromm is licensed to practice law throughout the state of PA with offices in Philadelphia and Montgomery Counties. He is authorized to handle IRS matters throughout the United States. His phone number is 215-735-2336 or his email address is , his website for more tax, estate and business articles is and his blog is

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The advice above regarding you taxes is accurate.

With regards to the purchase and financing of the car:

Obtain your own financing,(your bank or credit union, most likely wont be a strict with the document requirements if you have a good relationship with them) pay cash or Work WITH the dealer, provide them everything they need to get you acceptable terms. Do NOT delay or go in with an attitude, you are in the wrong here, THEY are the Victim.


1. If you look through your paperwork, it probably says that this is a convenience delivery agreement, and that the transaction is contingent upon financing.

2. The dealer quoted you financing based on what you presented to them as your financial condition, one of the boxws on the application probably also stated that you are current with your and have filed your taxes.

3.Then then likely received a stipulated approval which reuired you to submit proff of income, by way of your tax return.

4. When you were unable to provide the tax returns, they lost the approval, and now have propsed alternative financing. If you dont like it you likely dont have to take it.

5. The convenience delivery agreement most likely has a security interest retained by the dealer, and the right to reposses.

So your bargaining power is low, because of your financial condition.

If you don't want their new financing terms, TAKE THE CAR BACK NOW! Wash it and make it perfect before you give it back. The convenience agreement probably allows them to keep your deposit if the vehicle is damaged, may even have a mileage penalty. And Get a release from the dealer BEFORE you leave.

I represent car dealers, they always call me with this same scenario, and where the buyer either won't bring the car or has damaged the vehicle. What you have to be worried about is what you represented to the dealer on your financing application, if it is misled them, and they get upset, they have rights that they can pursue against you. This could have even more serious consequences to your financial position.

Good Luck and if you need further information, feel free to contact me.

Sam Mansoor, Attorney
Mansoor Law Firm, PLLC
50 Catoctin Circle NE #301
Leesburg, VA 20176
(703) 404-7733

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