I was told that my car loan was approved signed all paper work, then over three weeks later told the loan was denied trade invol

Asked almost 4 years ago - Miami, FL

what should someone do if the were told that their car loan was approved they picked up the vehicle signed all paper work. Three weeks later they called and told me the loan was now denied. There is a trade involved

Attorney answers (1)

  1. Ronald Lee Burdge

    Contributor Level 20

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    Answered . Odds are, you may be getting ripped off. As hard as it seems to believe, many car dealers will sell a car to you and not have any idea of whether or not your loan is "really" approved or not. They do it because they know that if they can put you in their car and take you out of your old car, then they also take you out of the shopping market and that keeps you from buying somewhere else. They worry about setting up the financing later and if they can't set up a loan, then they may call you back and say they need more money down or the lender requires you to have a service contract as part of the deal or some other excuse. They may even say you have to sign a new contract for one reason or another (such as, a better loan rate, you don't qualify with that lender, etc) and it may be just a lie to get you into a more expensive loan that costs you more money. In many states, that can be illegal. Look at your sales paperwork for a document that is often called a “Spot Delivery” or “Bailment” Agreement. That's a paper that says what how long the dealer has to set up the loan and what happens if they don't get it done on time. It usually says they have 3 to 30 days (usually on the short side of that total) and that if they can't set up a loan then you have to give them back the car and maybe pay for the mileage you drove on it. Whether or not you get your trade in or down payment back should also be covered. This whole process is called "dehorsing" by the car dealers themselves (you can read a Car Dealer's Slang Dictionary at this web page: http://ohiolemonlaw.com/car-dealer-dictionary.html) and doing it can be a violation of most state Unfair & Deceptive Acts and Practices laws (these are called “Udap” laws by Consumer Law lawyers). If your amount being financed is less than $25,000 (to find out just look at your finance contract's "federal box" where key finance numbers are stated) then doing this to a consumer very likely is also a violation of the federal Truth In Lending Act too (that’s a consumer protection law that deals with financing). Some states (like Ohio) also have a law that specifically applies to car dealers doing this sort of thing. If you don't have any spot delivery document in your deal and there is nothing on the finance contract that says it is contingent on financing approval and it says on it that the dealer (by its name) is the "creditor", then your deal may be a final contract and if the dealer can't get a lender to finance the sale for you then legally the dealer is probably stuck having to take your loan payments or else let you out of the deal, but of course they won't tell you that and they, in fact, will probably say they don't have to at all. You need to talk to a local Consumer Law attorney who deals with this kind of case (it's called "autofraud" or car sales fraud). Call your local attorney's Bar Association and ask for a referral to a Consumer Law attorney near you or you can go to this web site page for a Free Online 50 State National List of Consumer Law Lawyers (http://www.ohiolemonlaw.com/ocll-site/ocll-loca...) and find one near you (lawyers don’t pay to get listed here and most of them are members of the only national association for Consumer Law lawyers, NACA.net). But act quickly because for every legal right you have, there is only a limited amount of time to actually file a lawsuit in court or your rights expire (it's called the statute of limitations), so don't waste your time getting to a Consumer Law attorney and finding out what your rights are. If this answer was helpful, please give it a thumbs up below. Ron Burdge, www.CarSalesFraud.com

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