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Can they even do that if you signed a contract??I have no experience, hopefully someone else posts who knows about this, but that just seems wrong!
I had the dealer mess up my loan (they couldn't offer a 60 month loan for the model year of my vehicle). They had to negotiate another loan with another bank. I'm pretty sure they had to eat some costs but it was their mistake not mine.
They might have checked with multiple banks to find you the best rate. I would call and ask. They wouldn' t let you leave with a car if you couldn't finance it.
Free car? Haha jk....that is REALLY strange. It's gotta be a mistake on their end. Call immediately!
When you bought the car, the dealership applied at multiple banks for your loan. Than they gave you the loan (with the best rates?) well they gave you a loan. Now another bank the dealer applied at, denied the loan, but it doesn't matter. You have your loan and you have your car and you can disregard this letter and anymore that come any bank other than your lender.
When FI bought a car they tried to fiance it through 3 different lenders. One was approved and we left with the car. A month later we got denial letters from the two other lenders.
Is the letter from the lender that the same bank your car finance is through??
I would assume that they have to honor their contract. Hopefully it's just the dealership that messed up or like mrsmenow said they tried multiple banks.
I don't get how a dealership would let you leave with a car that they didn't know if you could pay for! And the worst part is I traded in my car so if this is an issues then where is my car!
@msgraphics- Okay that sounds better.
@legallyblondebride- The letter is from a different bank, but DH swears that when he read the letter (it's not at home) that the dealership said something about the bank we have.
I guess the part that makes me a little nervous is that we have yet to receive anything from the bank that we signed the contract with.
This is weird.
Is the letter from the bank you got the financing through? When you get an auto loan at a dealership they send your info to MULTIPLE establishments. You may get denied by Capital One but approved by Chase (just examples). The dealership comes back to you with the best rate (this is also why you get a bigger hit on your credit score than if you were to just go to your local credit union or bank). If the letter is from the actual lender you have your loan from you need to call them. I would do that before calling the dealer. Good luck!
Have your FI call the dealer to find out what is going on. I am sure it is just a misunderstanding. Trust that if the deal fell through they would have sent someone out to get the car from you. They wouldn't have sent a letter.
@nickels- I think I am going to call the bank we got financing with as soon as I get home.
Can I say I hate car salesmen! No offense to anyone who sells cares or who's SO does.
This was my biggest fear when I bought my car and why I made sure I got my own financing through a credit union. I would try to find out what's really happening from the dealership because I believe they can legally take the car back if financing falls through...
@legallyblondebride- The dealership was horrendeous after we bought the car. It took them 3 days to register the car, then didn't put a sticker on it (made up some bs excuse), and they gave us 2 keys but one doesn't work. So I don't really have faith in them. And we bought a very nice car from a highly reputable dealership.
@roxy821: I'm sure everything will work out. If financing did fall through its worth going to a credit union and seeing what they offer. I bought a new car this past summer, I had always done my banking at TD Bank but I went to a credit union, joined, threw $100 into the account and went there 2 days later and gpt an auto loan at 2.99%, some CU's have great rates right now, some people qualified for 1.99%, unfortunately I wasn't one of them, but I was still pretty happy with 2.99% :)
@Aure: I believe they can legally take the car back if financing falls through...
They can.
A girl I worked with bought a used BMW last year and almost two weeks later was notified that the financing fell through. While she was "pre-approved" they revoked the loan after reviewing all of her financial details. She had to return the car and trade it in for something with smaller monthly payments to meet their financing restrictions.
They will usually run it through several banks until they find one that will finance. The ones that deny you will get letters from both the dealer and the financial company so you can use those letters to pull up copies of your credit report. It is the law that if they pull your credit and deny they have to send out how you can pull those reports for free. There should be instuctions on the letters on how to pull your reports.
@nickels- DH has a credit score over 800 so we weren't worried about financing, but the dealership offered us a good deal. But if it falls through we will go to another bank, but I didn't know that you could get denied after you were approved.
@treejewel19- Oh my that would be terrible. So it's like the dealership tricked her into buying from them and then she was stuck with something she didn't want in the first place.
@tksjewelry- I am hoping that is all that it is.
I know my situation is different, but it had to do w/ financing. When I bought my car, I was quoted 1.5% APR (this was years ago lol). I signed on the dotted line and went on my merry way. Several weeks later, I got a call saying there was an error an in all actuality, the bank approved me for 2.5% and they were sending me a new contract to sign. I basically told them to shove it. I signed for 1.5%, so they could eat the costs of the 1%...never heard from then again.
@roxy821: Thats a really good score, he shouldn't be turned down by any lenders with that! Just be careful if they they want to resubmit everything to find you guys new financing. If its falls out of a certain period of time your credit scores will take ANOTHER hit. They give you a certain amount of time (I'm not sure how long, but I think 2 weeks) where you can have your credit pulled (hard pull) by lenders without being penalized (this is so consumers can shop for the best rates). But if a certain amount of times passes and you get those hard pulls again by other financial instituions your score will go down because they see you as asking for even more credit. And the dealerships can bring your score down quite a bit (they show up as you seeking credit from so many banks) I've been told anywhere form 10-20 points by the loan officer. When the credit union pulled mine it took off 1 point, but that is because it was just 1 pull. Just figured I would mention it ( I never knew that when I bought my first car, just when I bought my recent one :)
They dont look at just the score, they also look at credit history and other factors because i have a high credit score but not a long credit history so we had to finance in my husband's name.
@nickels- Thanks for all of the financing tips, it's very helpful. We both have really good credit, own a home and just bought our 2nd new car so I hoping we should be good for a while and let our credit scores work their way up in case they took a hit from the inquiries.
I've had something similar happen. On the first car I bought on my own, I did the sign and drive thing. The financing didn't happen the way they wanted, so they had to actually give me MORE for my trade in to get the financing to work. They ate the difference because my car was NOT worth what they ended giving me. :D
Unless you falsified information on loan documents, they can't take the car back. They have to arrange alternate financing.
UPDATE: I just reread the letter. The one from the bank we didn't go with I'm not worried about but there is one from the dealership itself? The one from the dealership is basically saying that the loan we applied for through them has been denied, and they left at 3 today so we can't call until tomorrow.
Your credit score doesn't "take a hit" with multiple inquiries on the same type of purchase within a 30 day window. I'm not sure why people believe that, it is common knowledge that when shopping for financing on something that your credit will be run a few times, that counts as 1 "hit" as you are all referring to it.
And this actually happens all the time to people. Google it. That is why it is highly recommended that you secure your own financing or read the contract in detail when you sign it. Likely they reviewed your credit history and found a reason to deny you, but either way you can go pull your own credit report, or likely more helpful would be your FICO score for free (credit) and $20 (FICO). This way you will know what they are seeing. Also, the letter should have stated why you were denied credit, but if it didn't you can simply pick up the phone and ask them. They will tell you, they aren't hiding anything. The money is theirs to lend to whomever they see fit.
And they can absolutely repossess the car if the financing falls through. Again it happens all of the time.
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So DH and I bought a car before xmas. Well last night we got two letters in the mail, one from the dealership and another from a local back that stated financing was denied.
They pulled our credit scores while we were at the dealershiop, gave us a rate, and had us sign the contract with another back (not the one stated in the letter). We got our car registered and insured and have been driving it since.
Has this happened to anyone else? What should we do?