When you finance with a car dealership, you are giving them consent look at your credit reports and to try to assign your contract to a more traditional financial institution, such as a bank, credit union, or motor vehicle financing group that regularly does business with the dealership, which also has the right to check your credit reports to determine if they are willing to accept its terms.
If all of them reject the buyers' credit application and contract with the dealer, the dealer would be advised of the rejection(s). Also, the financial institutions are required to send the buyers written notice by mail of taking an "Adverse Action" (a term from the Equal Credit Opportunity Act).
As stated in the standardized dealer purchase contract, the dealer may elect to rescind (cancel) the contract with the buyer(s), who must promptly return the vehicle to the dealer, which must promptly refund to the buyer all consideration paid, such as a trade-in vehicle and money. If the buyers fails to return the vehicle to the dealership promptly, the dealership will either repossess it from the buyer with a tow truck or sue for breach of contract and possession in Superior Court.
You should determine your legal rights specifically and find out if any laws were violated. Consult with a consumer lawyer who handles car dealer cases. I have linked below to the find attorney with the National Association of Consumer Advocates. Be sure you save all of your car documentation and notices of rejection (including the envelopes) in a safe place (neatly in a file or large envelope) at home or the office, not in the glove box of the vehicle, in case it is repossessed.
Robert Stempler (please see DISCLAIMER below)
NOTICE: The above statements are provided for general information purposes only and are not intended as legal advice or advice of any sort for a specific case or legal matter. If you do not have a signed attorney-client fee agreement with the Consumer Law Office of Robert Stempler, APC ("the Firm"), then until such written fee agreement is provided and signed by both a prospective client and attorney for a particular case, neither Mr. Stempler nor the Firm will represent you nor will they be your attorney in any matter and you remain responsible for retaining your own attorney and for compliance with any and all deadlines and for any statutes of limitations that may pertain to potential claims. Comments made on a public forum, such as Avvo.com, to not have any confidentiality because others may read them. If you desire a private consultation with Mr. Stempler that is confidential, please go to www.StopCollectionLawsuits.com and submit a free eCase Review. The result portrayed for a client was dependent on the facts of that case. Results will differ if based on different facts. The Firm and Mr. Stempler are a debt relief agency. The Firm and Mr. Stempler help people file for bankruptcy relief under the Bankruptcy Code.
The dealer has ten days to rescind the contract if it cannot be assigned. The dealer must notify you in writing of its decision to rescind. If more than ten days have passed and the contract is not assigned, the dealer is stuck. If you hear nothing, be sure and make your first payment to the dealer. You could also take this up with your credit union, since it pre-approved you.