Can a car dealership force me to finance through them?

Question

I have negotiated and secured a price for my vehicle. Before I started shopping I secured my finnacing through direct lending with Capital One. Now the dealership is refusing to accept this, and saying that unless I pay cash (certified check) they will not allow outside financing of the vehicle. Is this legal? This sounds incredibly shady and is very unethical considering I have mentioned multiple times throughout the process that I planned on using my own finance company. They have had me cancel the insurance on my current vehicle and establish a new policy on the one I plan to buy, and then at the last second pull this. Anything I can do? I want to threaten them with a lawyer but don't know if that will sound ridiculous.

Answer 1

Car dealerships will NOT accept credit cards as payment for cars, there is a percentage fee charged to the seller, and they don't want to pay it, so you are sol.

Answer 2

no they just do not have to sell you the car

Answer 3

They cannot do that at this point.  Creation of a contract is involved in purchasing a car and companies can choose which form of payment they accept through that contract.  So in general they can refuse outside financing but they are required to state that earlier in the contract creation process than where you are.  If you have made it clear as to your form of payment through the contract writing process and they did not say right away that it wouldn't be acceptable then they have implicitly accepted a verbal clause to the contract.  At this point, as long as they are assured of being paid (which they are in this situation) then they cannot restrict you.  

In the United States, because of our free market system we have multiple options for financing, but companies can refuse that financing as long as they tell you before you have made sacrifices which you have with the insurance cancellation.

They also cannot require you to cancel insurance on your current vehicle and leave you uninsured.  That indications that there is something seriously wrong with this dealer.  Drop them and go somewhere else, then report them to the BBB

Answer 4

I am a car dealer & have a JD in law so I know the law. You can not be force to finance through them. Car dealer love to finance through themselves or their banks because they make money that way. We have what the banks call a buy rate, that is the rate we buy it for, Lets say the bank approves a 10,000 loan for 6% for 60 months, We are allowed to charge you 2.5% over that, we get the 2.5% as a commission. That's why paying cash or getting your own loan we aren't exactly happy campers. Unlike most car dealers I could care less where you got the money as long as I got paid for the car, and actually you getting your own loan, I have less paperwork. So in short, Yes you can contact an attorney.

Answer 5

no, they can refuse to sell you the car.  you can also refuse to buy it unless they sell it at your price on your financing.  if they still refuse, then go elsewhere.

Answer 6

Tell them that these are your terms and that they can take the deal or leave it. They wont give up a sale unless there is something for them to hide.

Answer 7

you can finance through who you want, if they only want cash i would  buy a car somewhere else and if they cause you problems i'd get a lawyer it sounds  shabby to me to!!!!!some car places want to finance through them but i never heard of being told to pay cash only somethings not right about that. have someone come with you next time and see if they do things different good luck

Answer 8

Either they or you can back out of the deal at any time, and they're backing out now. Why? Because financing is extremely lucrative, and if you've financed elsewhere, that's money they won't make from selling their vehicle to you.

Don't threaten them with legal action, just tell them you'll buy your vehicle somewhere else, and advise your friends and co-workers to do the same. Then calmly turn and leave.

Answer 9

They get a "finders fee" every time they arrange a loan, so naturally they want you to work with them. Tell them you have your own finance folks, if they wont let you do that walk away. Just make sure when you do buy a car drive it back and show the salesman what his commission didn't look like.

Answer 10

They can refuse sale at any point.

Better luck next time.

Answer 11

This is not legal what they are doing. Of course they want you to finance through them, because they make more money. Tell them you're reporting them to the "better business bureau" if they persist. If they stand firm, tell them you want your down payment back or you'll sue. You may have to contact an attorney, but the BBB should be enough to make them squirm.