If you had a signed set of sales and financing paperwork, generally the only way the bank can back out of the deal, or the dealer can back out of the deal, is if there is a valid "spot delivery" form that was signed as part of the transaction and even then they may not be able to back out. It sounds like you drove off thinking you had a "done deal." An auto sales fraud or Consumer Law lawyer is who you need to see. Let me explain the legal end and then give you a link to a page where you can find a lawyer who handles this kind of case. As hard as it seems to believe, many car dealers will sell a car to you and not have any idea of whether or not your loan is "really" approved or not. They do it because they know that if they can put you in their car and take you out of your old car, then they also take you out of the shopping market and that keeps you from buying somewhere else. They worry about setting up the financing later and if they can't set up a loan, then they may call you back and say they need more money down or the lender requires you to have a service contract as part of the deal or some other excuse. They may even say you have to sign a new contract for one reason or another (such as your job, a better loan rate, your work doesn't qualify with that lender, etc). In many states, that can be illegal. Look at your sales paperwork for a document that is often called a “Spot Delivery” or “Bailment” Agreement. That's a paper that says what how long the dealer has to set up the loan and what happens if they don't get it done on time. It usually says they have 3 to 30 days (usually on the short side of that total) and that if they can't set up a loan then you have to give them back the car and maybe pay for the mileage you drove on it. Whether or not you get your trade in or down payment back should also be covered. This whole process is called "dehorsing" by the car dealers themselves (you can read a Car Dealer's Slang Dictionary at this web page: http://ohiolemonlaw.com/car-dealer-dictionary.html) and doing it can be a violation of most state Unfair & Deceptive Acts and Practices laws (these are called “Udap” laws by Consumer Law lawyers). If your amount being financed is less than $50,000 (to find out just look at your finance contract's "federal box" where key finance numbers are stated) then doing this to a consumer very likely is also a violation of the federal Truth In Lending Act too (that’s a consumer protection law that deals with financing). Some states (like Ohio) also have a law that specifically applies to car dealers doing this sort of thing. If you don't have any spot delivery document in your deal and there is nothing on the finance contract that says it is contingent on financing approval and it says on it that the dealer (by its name) is the "creditor", then your deal may be a final contract and if the dealer can't get a lender to finance the sale for you then legally the dealer is probably stuck having to take your loan payments or else let you out of the deal, but of course they won't tell you that and they, in fact, will probably say they don't have to at all. You need to talk to a local Consumer Law attorney who deals with this kind of case (it's called "autofraud" or car sales fraud). Call your local attorney's Bar Association and ask for a referral to a Consumer Law attorney near you or you can go to this web site page for a Free Online 50 State National List of Consumer Law Lawyers (http://www.ohiolemonlaw.com/ocll-site/ocll-locate_local.shtml) and find one near you (lawyers don’t pay to get listed here and most of them are members of the only national association for Consumer Law lawyers, NACA.net). But act quickly because for every legal right you have, there is only a limited amount of time to actually file a lawsuit in court or your rights expire (it's called the statute of limitations. If this answer was helpful, please give it a “Vote Up” review below. Ron Burdge, www.CarSalesFraud.com
This answer is for general purposes only and does not establish an attorney-client relationship. Click the link to find a Consumer Law attorney near you.
In Colorado the state law is that once the documents were signed and you took possession of the car, the "bank" can't back out of the deal and neither can the dealer. This is a common fraud in Colorado. It arises because what a car dealer does is get a "form loan agreement" from the buyer. The dealer then needs to sell that paper to a bank or loan company to get its money. If the dealer can't find a good deal with a bank, then what they do is claim that it was "rejected" and when you go back they tell you that if you put more down, or pay more each month, or raise the interest rate, or all three, then they can get the bank to "accept."
Do not return the car. If a repo man comes call 911 and say that the car is being stolen. Show the officer the paperwork and tell the officer that you are not behind on payments.
Call the dealer's bluff.
Finally, write a letter to the Colorado DEaler Board and set out the facts of the deal and ask them to investigate the dealer's practice of "bait and switch" on the financing deal.
Like many attorneys we will sit down and review your situation with you without charge. You can look online for a "car dealer" advertisement by a lawyer.
Your best bet is to find a good lawyer who provides advice on this kind of issue on a regular basis and review your specific facts; the lawyer will be able to give you an analysis of the law and your options.
By the way, some attorneys sell "unbundled" or "limited" legal services where you pay for just what you need and can afford. For example, some attorneys will prepare letters for you to sign, legal documents, or sell the paperwork for the court filings; then you can proceed on your own, but knowing that your paperwork is correct and having a road map as to how to proceed. Or who will attend a hearing for a flat fee even if they are not handling the whole case. Neighborhood Law Office is such a firm.
At Neighborhood Law Office we never charge for an initial consultation, and at that meeting we can go through your specific facts and give you options. Please call us anytime for an appointment.
Neighborhood Law Office
7225 E. Hampden Ave.
Denver, CO 80224
NOTICEâ€” This answer is based upon a partial understanding of the facts and may not be relied upon as legal advice. It does not create an attorney client relationship between the writer and the attorney. It is provided for general information. You should always consult an attorney about your important legal rights.
I agree with attorney Burdge.
Mr. Pascale is licensed to practice law in the State of New York. The response herein is not legal advice and does not create an attorney/client relationship. The response is in the form of legal education and is intended to provide general information about the matter within the question. Oftentimes the question does not include significant and important facts and time-lines that, if known, could significantly change the reply and make it unsuitable. Mr. Pascale strongly advises the questioner to confer with an attorney in their state in order to insure proper advice is received.