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 aim is to assist you make better financial choices by offering you financial calculators and interactive tools, publishing original and objective content. This allows you to conduct your own research and compare data for free to help you make financial decisions with confidence. Bankrate has partnerships with issuers such as, but not limited to American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Make Money The offers that appear on this site are from companies who pay us. This compensation could affect how and when products are featured on this site, including for instance, the order in which they appear within the listing categories, except where prohibited by law. This applies to our mortgage, home equity and other products for home loans. But this compensation does have no impact on the information we publish, or the reviews you read on this site. We do not cover the entire universe of businesses or financial offerings that might 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, including savings tips, banking homeownership, homebuying and personal finances. Edited by Rhys Subitch Edited by Auto loans editor Rhys has been editing and writing for Bankrate since the end of 2021. They are passionate about helping readers gain the confidence to take control of their finances through providing precise, well-studied information that breaks down complicated topics into bite-sized pieces. The Bankrate guarantee
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We receive compensation for the promotion of sponsored goods and, services, or when you click on certain hyperlinks on our site. So, this compensation can influence the manner, place and in what order products appear within listing categories, except where prohibited by law. We also offer mortgage, home equity and other products for home loans. Other factors, like our own proprietary website rules and whether or not a product is offered in your region or within your personal credit score could also affect the manner in which products are featured on this website. We strive to provide a wide range offers, Bankrate does not include specific information on every financial or credit products or services. After working with a dealer you drive off in your brand new or newly-purchased vehicle confidently. Although the financing hasn’t been approved yet, spot delivery permits you to take your new car off the lot in a matter of minutes. But a few days later, you receive a message that nobody wants to receive: Your financing isn’t working. If you’re in this predicament, your next step should be to determine whether there’s a flaw in the application that resulted in the denial or if you have fallen victim to a spot delivery scam. Are you able to be denied the car loan after preapproval? Though the chance of this happening due to the reason that is legitimate is small, it could happen leave the lot. Here are some common reasons why: You lost your job. The lender will likely verify the status of your employment before processing your application to finance. If they’re not able to verify your employment status due to fired, laid off or resigned, your application may be rejected. Your income went down. Whether it’s the result of a job change or reduction in hours by your employer, the lender could decide that you can pay the car payment each month and refuse you an auto loan. Your application contains unverifiable information. Are there any mistakes in your application? Have you gotten a new job or relocate after getting approval for car loan? This is a reason for the lender to refuse your loan when you did not inform them of the modifications. There are also instances where your financing could fall through due to a spot-delivery scam. In such a case, you’ll want to act swiftly to have the situation rectified to avoid becoming a again a victim. Be aware of signs that indicate spot delivery scams when dealers allow spot delivery, which means that you are able to drive away in your car within the same day that you sign the paperwork. But the actual financing of the loan may not be complete at this point. That’s especially relevant if you get to an after the banks are closing. Check out how the dealer responds. If the dealer is threatening to report the vehicle as stolen or take the vehicle back immediately, then you’re likely dealing with a scam. But it is important to note there are exceptions to spot delivery scams are scams. Mistakes can happen. A legitimate dealer might permit delivery on the spot, but they may make a calculator error on your loan application that leads to the deal being rejected. If the dealer could reasonably assume that a buyer wouldn’t be approved at the and requires the buyer to resign for the car at a higher interest rate there is something suspicious likely to be going on. Examine the original documents Take a look at the original purchase documentation. If you saw a ‘Seller’s Right to Cancel’ or ‘Limited Right to Cancel’ form, you’re probably to be a victim of fraud. Otherwise known as , these documents permit the seller to pursue an ‘bait and switch’ scenario. Essentially, that means you’ll have to pay more than the previously agreed price for the vehicle. Luckily, these kinds of documents are prohibited in the majority of states. If you do find an exception in the pile of documents that you initially signed, it is likely you are dealing with a shady seller. What to do if you’ve been scammed The unfortunate reality is that there are scammers in almost every industry. Car dealerships aren’t an exception. If you’ve been the victim of a fraud involving delivery to the point take all the original documents. Then, contact the office of . The authorities will be in a position to guide you through your choices at a specific state level. In some instances, authorities may request a timeline of events relating to the purchase of your vehicle. It is recommended to write down every detail of the process. Otherwise, it can be difficult to piece the details together later. How to protect yourself from further harm should you’re the victim of a scam involving delivery on the spot There are steps you can take to prevent this from happening again to avoid it again in the near future. Be wary of ads from dealerships for cars. Read the fine print to learn more about rebates of savings the dealer is promoting. Some come with terms which could mean they are not available to you. Research dealerships to work with A quick Google search will help you find a dealership within your region that has the highest ratings from customers. Avoid dealerships with a number of negative reviews or that have an image of having shady deals. If anything about a dealership isn’t comfortable, look for another dealer to conduct business with. You can arrange financing directly with the lender Instead of relying on a dealer for financing, through a bank, credit union, or online lender. Before heading to the dealership to ensure you get the best deal on financing. Make sure you take your time when purchasing cars isn’t easy Don’t hurry through the paperwork or sign it without understanding the fine print to ensure you get the deal completed. Don’t take a spot delivery You may not be thrilled with the idea of waiting until your loan is approved, processed and funded before you can drive away in your new vehicle. But, avoiding spots will eliminate the possibility of being a victim of a scam involving a delivery spot. The bottom line: A spot delivery scam can be emotionally and financially taxing. If you are seeking car, the best choice is to secure credit directly through the lender. Don’t depend upon dealer-financed financing. Dealer financing is not only often more expensive, but you’ll also face the possibility of a spot delivery fraud. If you’re seeking a reliable lender to partner with, look into . Learn more
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Written by Contributing Writer Sarah Sharkey is a contributing writer for Bankrate. Sarah writes on a variety of topics, including banking, savings tips, homebuying, homeownership and personal finance. Edited by Rhys Subitch Edited by Auto loans editor Rhys has been writing and editing for Bankrate since late 2021. They are enthusiastic about helping readers get the confidence to take charge of their finances by providing clear, well-researched details that cut otherwise complex subjects into bite-sized pieces.
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