I assume this is a used car dealer, and not a new one?
They make money off playing the financing games.
Then, have your financing in place before you go to the next place, and don't discuss financing with them, nor prices above your approval.
Since you have financing lined up you are not really damaged by these sharp sales tactics because you do not have to accept what the dealer says--you can just use your external financing. The dealer is, however, required to provide you certain information pursuant to the Fair Credit Reporting Act. The dealer must supply the name of the credit bureau they contacted. Some dealers send these notices by mail a few days after a denial. You also have the right to get a free copy of your credit report (the one they pulled). If you don't receive either of these after request, you might have a cause of action. I know of no requirement in the law that a dealer provide you "proof of denial" but I agree with you that these types of practices are suspect. It sounds like you are an educated consumer and will end up getting the financing you desire.
This answer is for informational purposes only. This answer does not constitute legal advice, create an attorney-client relationship, or constitute attorney advertising. We are a debt relief agency. We help individuals and businesses file for bankruptcy protection under the Bankruptcy Code.