Can dealer ask for car back after a week of buying and financing?

Question

saying to bring back the car you just boaught a week a go because according to them you didnt qualify for it anymore?? I dont understand. I just bought a brand new car a week and half ago.. I spent more than 4 hours at the dealer, and they checked our info carefully and said we qualified right? Then they call us back today and say we need to bring the car back? are they allowed to that even after we put a down payment and signed a paperwork etc. a week and a half later?? We showed them all the info they needed that day we bought the car. ( paystubs, proof of income etc,,) The car was only $16,000.. Im confused :/ I thought once the contracted was signed and u got approved through the finance bank everyhting should be ok? Is it legak for them to break the contract and ask for the car back? I live in the state of california by the way.

Answer 1

As far as I am concerned you signed a contract stating that the financial institute approved your loan and you understand you are obligated to make monthly payment. It is your car and they cant take it back unless you default on the loan

Answer 2

tom_gpp is correct.

They thought they could get the bank to approve based on your credit score and down payment. That apparently didn't happen. So, they tried to get other lenders to take on the loan. That didn't happen, either.

This is common practice in the car business, and has been for some time. The problem now is that the lenders are much more stingy due to the credit crisis, and are turning down more and more loans.

Go back to the dealer, get your downpayment back, and turn in the keys.

Answer 3

Dealer might check your credit score to make sure you are not a "roach" or someone who has no possibility to get financed, but they don't approve financing. Only finance companies and banks approve loans.

There was apparently some problem with either your credit score, your income, or your debt load. This is the reason for your disqualification. It has nothing to do with the dealer, who was only hoping he could push your deal through, but was unsuccessful. It doesn't matter what you signed, if the dealer can't get you financed, he doesn't get paid for his car, and he'll want the car back. You can always try to get your own financing at a bank or credit union, or at one of the online loan companies such as driverloans.com or capitalone.com. Here's an article that might help:

http://www.leaseguide.com/Articles/deale...

Good luck.

Answer 4

Call the person at the dealership who sold you the car and make them tell you why. They may say that they don't know, but believe me they can find out. Sometimes the finance company approves you based on your credit report and what you put on the application (i.e. salary information, employment, etc) and if they found out that any of that info was wrong they'll want the car back. Was there any misleading info on your application?

Answer 5

I am not an expert on California law but there are some general principals that should universally apply.  

People typically get confused over these issues as many whom have tried to answer your question apparently have.

Banks (or other finance sources) have nothing to do with you being the legal owner of a vehicle.  The only thing a bank does is provide the money to the dealer on your behalf in return for your promise (on your finance contract) to repay the loan.  To secure their interests the bank places a lien on the vehicle title.  In terms of paperwork, the bank has nothing to do with whether you legally own the vehicle or not.

Here is what you need to determine.

Do you have copies of all the paperwork you signed?

Do your copies include your California application for vehicle title?

Did a dealership representative sign on behalf of the dealership on all of the copies you have?

Was the application for Title sent to the State (typically accompanied by a check from the dealership to pay for the state sales tax)?  (You may have to call you State DMV to determine this.)

If the title paperwork was sent into the state on your behalf (and the dealership paid the taxes) the dealership has a $16,000 problem.  In other words if the dealership did everything necessary to to give you legal ownership and screwed up in some way that prevents them from getting their money, you still own the vehicle, potentially for free.  (Don't laugh, I have seen it happen.)

What is more likely is the dealership did what is called in the business a "spot" delivery.  That is where a (typically very aggressive dealership) has you sign your portion of all of your paperwork based on their prediction that they will be able to get you financed after the fact.  Dealerships do this with customers to take them out of the market (IE... to get them to stop shopping at other dealerships).  

So if a dealer representative did not sign the copies you have and your title application was not sent into the State of California, this is likely what happened. And depending on the specifics of California contract law, you may not actually own the vehicle.

Here is one more tip.  At one point in my auto career I worked for a dealership that did lots of "spot" deliveries.  And to protect the dealership they used a form that the customer signed that said essentially if the financing failed to get approved the customer agreed to return the vehicle to the dealership "on demand".   This document constitutes the dealers legal recourse to force you to return the vehicle. Without you signing this document (or something similar) they essentially just loaned you a vehicle without any written agreement on when you are supposed to return it.  I mean you didn't steal it, legally speaking they "loaned" it to you without limitation on your usage.

If what did happen to you was a "spot" delivery it tells you that this dealership operates in "sell at all costs" mode, regardless of the consequences it causes for the customer.  So in my view if you returned the car in say a few weeks with a few thousand miles on it, it would be a fair price for the dealership to pay for what I view as less than desirable business practices.

Hope this helps clarify what may have happened.

Mark H.

Answer 6

They made a deal that they can't sell to the bank.  Do not hand them the keys back until you have the check for your down payment in hand.