What to do when a car dealer says your financing fell through Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our mission is to help you make better financial decisions by offering you interactive financial calculators and tools as well as publishing quality and impartial content. This allows users to conduct research and compare information at no cost to help you make financial decisions with confidence. Bankrate has partnerships with issuers, including but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Make Money The deals that are displayed on this website are provided by companies that compensate us. This compensation can affect the way and where products appear on this site, including for instance, the order in which they appear within the listing categories and other categories, unless prohibited by law. Our mortgage home equity, mortgage and other home loan products. But this compensation does affect the information we publish, or the reviews that you see on this site. We do not contain the entire universe of businesses or financial deals that could be available to you. MoMo Productions/Getty Images
4 min read. Published August 11 2022
The article was written by Sarah Sharkey Written by Contributing Writer Sarah Sharkey is a contributing writer for Bankrate. Sarah writes on a variety of topics, such as savings, banking homeownership, homebuying and personal finances. Editor: Rhys Subitch Edited by Auto loans editor Rhys has been editing and writing for Bankrate since the end of 2021. They are committed to helping readers gain the confidence to manage their finances by providing clear, well-researched facts that break down complicated subjects into digestible pieces. The Bankrate promise
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This compensation could affect the way, location and when products appear within listing categories, except where prohibited by law. We also offer mortgage or home equity products, as well as other home loan products. Other factors, such as our own website rules and whether the product is offered in the area you reside in or is within your self-selected credit score range may also influence the way and place products are listed on this website. We strive to provide a wide range offers, Bankrate does not include details about every financial or credit product or service. After working with a dealer, you drive off in your brand new or newly-purchased car with confidence. While the financing hasn’t been accepted yet, the spot delivery option allows you to get your new vehicle off the dealership right away. However, a few days later you get a phone call that no one would like to hear: your financing is not approved. If you’re in this situation the next step must be to determine whether there is a problem with the information in your application that caused the denial or if you’ve fallen victim to a spot delivery scam. Can you be denied the car loan after preapproval? Though the chance of this happening due to an actual reason is extremely low, you can even after driving off the lot. Here are some typical reasons for this: You lost your job. The lender is likely to verify your employment while making your application for financing. If they’re unable confirm your employment due to being terminated, laid off or resigned, your loan application might be rejected. Your income went down. Whether it’s the result of changes in your job or reductions in hours by your employer The lender might decide that you are not afford the monthly car payments and decline your auto loan. Your application contains unverifiable information. Do you have any errors on your application? Did you find a new job or relocate after you were approved for car loan? All of these are reasons to the lender to refuse your loan when you did not inform them of your changes. However, there are occasions when your loan may fall through because of a spot delivery scam. In such a case you’ll need to act swiftly to rectify the issue and avoid being a next time a victim. Be aware of signs that indicate spot delivery scams when the dealer permits spot delivery, which means you can drive off in your car the same day you sign the papers. However, the actual financing of the loan might not be completed at this point. That’s especially true if you come to an end of the day when banks are closing. Check out how the dealer responds. If the dealer is threatening to report the vehicle as stolen or to take possession of the vehicle immediately, then you’re probably dealing with a fraud. It is crucial to note that not all spot sales are scams. Mistakes can happen. In fact, a legitimate dealer could permit delivery at the spot but an error with your calculator in your loan application which leads to the loan being denied. If a dealer can reasonably believe that a buyer won’t be accepted and asks the buyer to sign for the car with a higher rate of interest, then something fishy is likely going on. Check the original documents Take a look over the initial purchase documentation. If you saw the ‘Seller’s right to Cancel’ or ‘Limited Right to Cancel’ form, you’re probably a victim of a scam. Also known as a ‘Seller’s Right to Cancel’ , these documents allow the seller to pursue the bait and switch method. In essence, this means that you’ll have for a higher amount than what was previously agreed price of the vehicle. Fortunately, these types of documents are illegal in most states. But if you find one in the mountain of documents that you initially signed, it is likely that you’re dealing a shady seller. What should you do if you’ve been victimized The reality is that there are scammers in nearly every industry. And car dealerships are no exception. If you are a victim of a fraud involving delivery to the point take all those original papers. Next, reach out to an office at . In this instance, the authorities will be in a position to provide you with choices at a specific state level. In some cases, the authorities may request the timeline of events related to the purchase of your vehicle. In that case, it’s a good idea to immediately note down every aspect of the procedure. Otherwise, it could be difficult to put the information later. How can you protect yourself in the future If you find yourself the victim of a scam that involves delivery on-site There are steps you can take to avoid the same situation in the future. Be cautious about advertisements from car dealerships Always read the fine print to learn more about the savings and rebates the dealer is advertising. There are many conditions attached to them that may make them inaccessible to you. Research dealerships to work with A quick Google search will aid you in finding a dealer within your region that has the highest ratings from customers. Avoid dealerships that have a lot of negative reviews or that have a reputation for shady deals. If something about a dealer causes you to feel uncomfortable, locate someone else to do business with. Arrange financing directly through the lender Instead of relying on dealers for financing or through a bank credit union or online lender. Before you go to the car lot to ensure you get the most competitive rate on financing. Be patient when buying a car can be a chore do not hurry through the paperwork or sign without reading the fine print to ensure you get the deal completed. Don’t take a spot delivery You may not be thrilled by the thought of waiting until your loan is completed, approved and paid to drive off in your new car. But, staying clear of spot deliveries could eliminate the risk of a spot delivery scam. The bottom line: A spot delivery scam can be emotionally and financially draining. If you’re looking to purchase an automobile, the most effective option is to get financing directly from the lender. Don’t depend upon dealer-financed financing. Dealer financing is not only typically more costly and risky, but you also have the risk of being a victim of a spot delivery scam. So, if you are searching for a trustworthy lender to work with, take a look at . Find out more
Writing by Contributing Writer Sarah Sharkey is a contributing writer for Bankrate. Sarah writes about a range of topics, including savings tips, banking homeownership, homebuying, and personal financial matters. Editor: Rhys Subitch Edited by Auto loans editor Rhys has been editing and writing for Bankrate since late 2021. They are enthusiastic about helping readers achieve confidence in taking charge of their finances by giving clear, well-studied information that breaks down complicated topics into digestible pieces.
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