i bought a new car Saturday 6/6/15 traded in my 2012 took possession that same day of my new 2014, signed contract finance manager said he would submit me that Monday to the bank, but the car was mine and plates transferred etc, received call on Tuesday saying i was denied the loan, but trying to get me financed through another bank they have a relationship with, they already sold my car at auction and I've already put on 300 miles on the new one, can they take away the new car and leave me with nothing, i have a signed contract is that considered binding? can they repossess in the middle of the night, my first payment was suppose to be due 7/22/15, i'm confused, last car i bought was with a cosigner( my husband) and i don't have more money down or cosigner this time around. Please Advise!
This scenario is all to common. They call it yo yo financing. They tell you everything is all set and then call you later telling you the bank denied the deal. They will offer different financing which is always at a higher interest rate. The documentation you signed will determine how you deal with this scenario and whether you have any awesome claims or not. If the agreement clearly indicates that the transaction is subject to financing-which many do not-then you may have a problem. If no such contingency exists then in my opinion there is a binding contract. You should scan all the documents relating to the purchase and financing of the vehicle and meet with a lawyer who deals with these cases.
If you signed a Retail Installment Sales Contract, you will see that it says up in the upper right corner that the Creditor/Seller is the car dealer. That means the dealer has agreed to extend credit to you on the terms you signed for. It's binding on you and on the dealer.
While the dealer intends to sell the contract to a bank, it's not your problem whether or not the dealer can do so on profitable terms. However, dealers simply refuse to recognize this legal reality and act as though the contract is just a rough draft which they can rewrite at will.
Although the dealer cannot legally repossess the car unless you fail to make payments as scheduled, I can't promise it won't happen. Anticipate this possibility by not keeping any personal property or papers, especially papers related to the car purchase, in the car.
Contact a qualified consumer protection lawyer immediately because you will probably need help. You can contact my office for an appointment if the dealer was in Massachusetts. You can also find a practitioner near you through the National Association of Consumer Advocates, consumeradvocates.org.
Disclaimer: This site exists to provide information only. It is not legal advice. Answering your question does not create an attorney-client relationship. I am a Massachusetts lawyer. Any information provided on this site does not, except as explicitly stated, imply familiarity with laws or procedures peculiar to your state which may differ from those where I practice.
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