Do I have to sign a vehicle purchase agreement a third time after the dealer upped the interest rate and monthly payment?

Asked about 1 year ago - Peosta, IA

I recently purchased a van from a local dealer. I was approved, signed all the papers ( including the title) and have had the van for 2 weeks. Now they say the bank is backing out of the loan and they want me to sign a new agreement with a higher interest rate and a higher monthly payment. Is that legal? Since I already have my plates on it and have been driving the van for two weeks? Also, they already sold my trade in vehicle, so I can't even go back into that!

Attorney answers (1)

  1. Timothy John Schemmel

    Contributor Level 5

    Answered . The answer depends on all of the paperwork you signed. Sometimes, dealers make purchase agreements with customers that say "subject to credit approval" or "contingent on credit approval." They sometimes use separate forms saying the same thing. Look through your paperwork for those things. If they did not make the purchase subject to credit approval by the bank, then as a general rule they are out of luck. This happened to me when I bought my wife's van, and the dealership ended up signing a guaranty with the credit union saying they would be responsible for the loan if I defaulted.

    If they did make the purchase agreement subject to credit approval, things get trickier since your old vehicle is already gone. If they change the terms in this situation, you have the right to back out of the deal. If this turns out to be the case, I would consult with a local attorney about your options.

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