Can a dealer require you to resign a contract for a different banks and higher monthly payment?

Question

Signed a lease agreement with dealer on June 28th, 2008. Now, they send me a new contract - with a new bank - and a higher monthly payment. What are my rights?

Answer 1

Sounds like they did a spot delivery based on your credit score and income. They took the risk that you would get financed, and apparently their first-tier lender didn't approve it. Common practice, but backfiring quite a bit lately due to the credit crunch.

You have two choices, and can legally get away with either:

1) Take the car back to them and hand them the keys. Walk away. As of right now, the car belongs to the dealer until a bank finances you and you sign papers for the loan. It is not your car, and you cannot keep it and "force them" into anything. You signed papers contingent upon the bank's approval.

2) Sign the new bank's loan papers and begin paying.

If I were you, I'd go with choice #1. Start over, trying your own bank/credit union first, then online lending sources.

Answer 2

The problem would be that the first bank or finance company the dealer tried did not approve you, probably based on a low credit score or insufficient income problem. The dealer then had to to try to find another finance company who would approve you. It appears that he did find another company, but that company would only approve you at a higher rate.

It doesn't matter what you have signed, if the dealer can't get you approved, the car still belongs to him. If you don't like the new terms, return the car to the dealer and go elsewhere. But just remember that your credit problems will follow you where ever you go. It unlikely that another dealer will be able to find a willing finance company any better than the first dealer.

Answer 3

If the first bank could not close the deal with him forsome reason, he will try other banks= he got you in there and you have the car, he is hedging on the fact that you like the car and will agree.  You can tell him no and give back the car on the basis that it was not the contract terms that you signed for.  Hopefully, he is not low enough to try to bait and switch.

Answer 4

I don't think that you should..  If you sign the second one you would be obligated.  You need to check it out.

Answer 5

I'm not sure the other answers are correct. I believe it's illegal for a dealer to put you on paper like that, (before they have an approved deal) therefore, technically they have to honor the contract you signed. I'm sure they'll kiss a lot of bootie to get out of that mess.

Answer 6

To turn down their new offer and not lease a car.  Apparently your credit wasn't good enough to get the terms they offered first.