Interested in what LH’ers have to say about situations like this. Has anyone experienced this themself?
Nothing new here. Happens all the time and is frequently discussed here. The deal isn’t done until it’s funded by the bank.
All depends on what the new terms are and the person agrees to different terms after signing. Maybe their credit wasn’t approved at a specific rate etc .
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But twice. Wow
Never heard of it in MA… probably because they don’t allow temp plates. If the registry is open then the credit agencies are open.
Look at your paperwork, there’s always a message about possible financing fail.
Temp plates are not the issue, the bank could reject it after a deeper investigation into your financials.
There’s a 14 day rule for new cars, either the dealer fixes it or takes the car back in 14 days…after that , the dealer is responsible for financing.
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This is also known as a “Spot Delivery.” When you take delivery of a vehicle after hours or on the weekend when the finance arm isn’t open, finance will make an assumption based on your credit that the loan will be bought by the bank. When they don’t secure financing at the terms they intended, you are then “yo-yo’ed” back in to either sign new papers with updated rates of the bank buying the note, or you return the car.
Happens all the time. Nothing new here. As @forbs indicates, you sign something in your financing packet that indicates the possibility the loan won’t be funded at the terms set forth in your agreement.
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All of this sounds incredibly shady and should be illegal IMO. Dealers should be held accountable for ensuring the financing is in place before handing over the keys. Any reasonable person wouldn’t sell something on a promise right?
Edit: How does a consumer (buyer) protect themselves from this?
Instant gratification trumps all.
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They get preapproved for their own financing (which is what anyone who has questionable credit should be doing anyway).
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Then dont sign papers on Sunday night and wait until deal is funded…problem solved😁
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If you have marginal credit do as @mllcb42 stated.
Everything bought on credit is based on a calculated promise isnt it?
Any time you buy something on Amazon with a credit card, you’re making a promise to repay.
I think you’re making a bigger issue out of this than it is. If you have good credit, it doesn’t apply to you. If you have marginal credit, make sure you get preapproved for financing on your own. That way, if the dealer finance is better, you drive off and they come back and say “um, we couldn’t get you approved like we thought,” you have a fallback.
You also have the option of handing back the keys and saying no thanks. You’re not locked in unless you resign the new promissory note.
I’m not trying to make a big deal out of this, I’m just sharing an article I saw on the news. I never knew that once you signed a deal the dealer could still back out. I think your average consumer is also unaware that such language exists in their contract.
Just trying to educate and understand that is all.
People should also take the time to read and understand what they are signing. The buyer is just as much at fault if they don’t comprehend what they are signing up for.
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Did anyone read the part where the dealer reported the car stolen, and the guy spent 2 days in jail because of it? Outrageous!
What car would you spend 2 days in jail for?
If you don’t give their car back, it’s stolen.
BTW this has been around for years if not decades, just not usually invoked very often.
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Why not just repo it?
You repo a car that is not yours but you hold a note on it.
In this case they ‘loaned you a car’ with the intent of it becoming yours upon approval. If rejected, it’s their car and they can do whatever they want to get it back.
Repos have very specific rules.
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How would one be successful at negotiating standard contract language?