OH state contract law, buyer signed contract to buy car, but loan wasn't approved, is the contract still binding

The contract is binding unless the contract says otherwise. The contract probably has a clause saying that it may be terminated if the loan is not approved, or will automatically terminate if the loan is not approved, or is condiitonal upon approval of the loan.

This answer must not be relied on as legal advice for the reasons posted here: http://mcgyverdisclaimer.blogspot.com . And I am not your attorney.

David

Car dealers do this sort of thing so often that they have a special slang term for it. It's called a yo yo or a spot delivery and the sales tactic can violate a number of state laws and even a federal law or two, depending on how it occurs. First of all, look at your finance contract. If the dealer's name is identified on it as the Creditor on the loan, then the only way the dealer can get out of the sale is if there is something printed on the finance contract that gives it an escape hatch, and there usually isn't. Of course, the dealer is not going to tell you that they have no right to later tell you the loan wasn't approved because if they did then you would realize that you were lied to in the first place and you might begin to wonder what else they did to you that you don't realize yet. Most of the time dealers use a separate one page form that is often called a Spot Delivery Agreement that attempts to say that the dealer has the right to cancel the deal if financing is not approved within a certain number of days, often 3 to 30 days. But being on a separate piece of paper usually won't work. There has to be a clause like that in the finance contract itself. I know most of the dealers in the Montgomery County-Dayton area and there is only one dealer I know of (in nearby Springfield) who actually has the up to date form. If the clause is not on the finance contract itself, then the dealer is probably stuck with the loan and has to accept your monthly payments if they can't get your loan approved with some bank or finance company. Second, look on the finance contract to see if the "federal box" (that's the boxed in area usually near the top half on the front side of the form, says that the amount being financed in less than $25,000. If it is, and the dealer is trying to cancel the deal, then in each of those little boxes (there should be a row of 4 of them across the top of the federal box area) has to have a small letter "e" in them. If it doesn't (and most often it doesn't), then the federal Truth In Lending Act is probably violated too. The law in each state is different, but in Ohio if a car dealer tells you your deal is approved or final and then sends you home in the shiny new car they just sold you, then if they try to make you sign a new deal later or bring it back to the lot, claiming financing wasn't really approved, then that can violate Ohio's Motor Vehicle Sales law. What you need to do is see a Consumer Law lawyer (not a general attorney because Car Law is a special area of the law) right away so immediately call your local attorney Bar Association or you can look for a local Consumer Protection lawyer in your state and near you by reading this 50-state National List of Consumer Lawyers on this web site page: http://ohiolemonlaw.com/locate-a-local-attorney.html