I purchased a vehicle 3 weeks ago at a car dealership. The financing was pre-approved, a contract was signed and I took home the vehicle. Approx. 3 days ago the dealership called and asked for the vehicle back because the bank loan wasn't approved. Is this legal? Is the contract void if the bank doesn't approve the loan?
Happens all the time here in CA and throughout the US. It's an old trick that dealers call a "yo-yo" sale. They bring you in, take your down payment and/or your trade in (call "de-horsing" you, that's how old the trick is) and then when you are at your most vulnerable, they change the deal on you, feeling they have the power.
The interesting thing is that often, as in your case, they do not even do it by the tricky/false rules they set up. In the long yellow sheet of paper you likely received, they have reserved a "10 day right" to do this. But, these folks have gone long past the ten days.
Feel free to contact me directly for a no cost document review.
You're essentially asking "what does my contract say," and that's a question no one who hasn't reviewed your contract can answer.
You need to review the contract you signed and agreed to, and see what it says about financing contingency. If you can't figure it out yourself, then you may need to hire a lawyer for help.
And NEVER sign any document you haven't read and don't fully undertand.
Avvo doesn't pay us for these responses, and I'm not your lawyer just because I answer this question or respond to any follow-up comments. If you want to hire me, please contact me. Otherwise, please don't expect a further response. We need an actual written agreement to form an attorney-client relationship. I'm only licensed in CA and you shouldn't rely on this answer, since each state has different laws, each situation is fact specific, and it's impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue.
The answer is probably yes, especially if the sale was contingent on loan approval. As the others have said, looking at the loan documents will be critical.
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