Skip to main content

Can the finanace company change the amount financed after I signed the contract?

Chicago, IL |

I just bought a used car from a dealership and traded in my old car for down payment so it's been 3 weeks I have had the car and I have just received my payment booklet plus a letter stating I was not approved for the loan amount but for a low amount

Attorney Answers 1


Most car dealers in Illinois have "yo yo" provisions in their contract, making their obligation to sell conditioned on a finance company agreeing to purchase the contract. They do this so they can give immediate possession of the car to the consumer, in the hope that they will go along with any changes in the deal. Illinois courts have upheld such deals, although they are inherently overreaching and rife with deception. The problem is that the dealer keeps part of the "finance charge" you agree to pay, so that the dealer's alleged inability to sell the contract often means that the finance company thinks the dealer wants to put too much in its pocket. Sometimes the dealer just tries to hold the consumer, who has taken a liking to the car, up for more money. Often this is compounded by a claim that the tradein has already been disposed of.

Legally, if the dealer cannot sell the contract, it can either (a) ask that you return the car and get back any downpayment/ tradein, without deduction of any sort, or (b) waive the provision and accept your payments yourself. The one thing that the dealer cannot force you to do is sign a new contract with more onerous terms.

I assume that what you meant by "change the amount financed" means that the finance company wants to reduce the amount it is willing to pay the dealer. "Amount financed" also has a technical meaning; it is one of the disclosure boxes on a Truth in Lending statement.

If the dealer is willing to give you a credit for the difference between what the finance company was asked to pay and what it was willing to pay, thereby reducing the price and payments, without a higher annual percentage rate, the contract probably allows the dealer to do this. But if any significant term of the contract is changed to your disadvantage, you cannot be compelled to agree to the new terms.

At this point, you should consult a consumer lawyer familiar with this sort of issue. They will want a clear copy of the frong and back of all papers you signed or received from the dealer. You should consult an attorney before agreeing to anything with the dealer.

Mark as helpful

1 found this helpful

3 lawyers agree




So even after I signed the term and conditions and got the approved rate have the car they can just change the amount they want to finanace

Daniel A. Edelman

Daniel A. Edelman


Only in your favor. Typical Illinois car dealer contracts state that the deal is conditioned on the dealer being able to sell the contract to a finance company, and that if it cannot be sold the dealer has the option to void the contract. They also will often contain your agreement to immaterial changes in the contract (such as use of a particular form prescribed by a finance company). But they cannot change the substance of the deal to your disadvantage. So if the dealer in effect wants to reduce the price, reducing your payments and annual percentage rate to correspond, it can do so. Whether the dealer is doing something it is not permitted to do requires that you show the papers to an attorney, who can see what the dealer is doing and check the annual percentage rate.



Well I haven't heard anything from the dealer just the finance company it self and I do believe the car I traded in has already been sold

Daniel A. Edelman

Daniel A. Edelman


Have a consumer attorney review your papers

Business topics

Recommended articles about Business

What others are asking

Can't find what you're looking for?

Post a free question on our public forum.

Ask a Question

- or -

Search for lawyers by reviews and ratings.

Find a Lawyer

Browse all legal topics