Question for My Son Car Loan Aprroved then denied 4 weeks later...........

[pamkev]

son went and got a car loan credit not good was approved through a company that the dealership uses this was about 4 weeks ago. He got a call on Wed from the dealership that the company financing the loan has now not approved the loan due to him not making enough money. He took in pay stubs for the last several months when he applied and all was good now this. He signed the contract and is just about to make first payment.

Has anyone every heard of this happening Company is CPS

Pam

I might have this in the wrong forum if so Mods please move it to the right one. Thanks

[Logan]

So he was approved, drove the car home and now he's been denied later. Sounds like the car company screwed up--what are they asking him to do? I bet there's some paperwork that protects the dealership in this instance but my guess is you get another loan or tell the car company to come pick up the car--just a guess so don't do anything based on what I just told you.

Logan

[pamkev]

Yes was approved drove home been driving it and now denied. The company is asking him to come up with 2800.00 more as a down payment

[Pjmax]

A similar thing happened to me a few years ago. I traded in a car for a new one, loan approved, signed papers etc. and drove the car home. I went in about a week later to pick up my registration, and was called into the office. I was told a mistake had been made and I now owed a few thousand more which translated into a larger car payment. I said no, I wanted what I agreed to (and I had it in writing.) They said not possible. I said okay, bring the car I traded in, around front and you can keep the new one. This went on for over an hour, I didn't budge. At one point they even said my trade-in car was no longer on the premises. I then got up and said when you get it back, call me and meanwhile I'll just keep driving this one. I went to the parking lot and the manager came after me, and finally said okay, okay, you win.
I don't know what the heck they were trying to pull or how many others they tries this on.
Read his paperwork carefully, there are some lousy car dealers out there.

[IBroke]

I don't say this is the case with this loan, but I've heard in the past that some dealerships are trying to get somebody in a car and use that to squeeze out a higher downpayment.

I'd say your son should study the contract he signed because I have my doubts they can simply cancel this deal. After all, he presented his income correctly PRIOR to the approval so I'd be curious to know on what legal basis they would have the right to cancel. After all, you can't take your car to the dealer after 4 weeks and tell him "unless the car gets an additional 100hp, I turn it back in"...

[IBroke]

A similar thing happened to me a few years ago. I traded in a car for a new one, loan approved, signed papers etc. and drove the car home. I went in about a week later to pick up my registration, and was called into the office. I was told a mistake had been made and I now owed a few thousand more....

This is EXACTLY what I'm talking about...some dealerships try to scam their customers while they are still excited about their new car..

[pamkev]

Thank you everyone. I will have son check contract over. We happen to be going a lawyer Monday to update our will and will ask him what he thinks.

Pam

[ksgirl38]

Not sure if they can help, but have you tried your states Attorney General. Sounds like the dealership is in the wrong and they should have to eat any difference, not your son. I guess you could also try the BBB. Seems like there'd be another organization too, but can't remember at the moment.

[Pjmax]

Pam, you can google auto dealer scams, and the situation that came up for your son is mentioned in all of them. Here's one for 'Financing Falls Through.' Don't let them get away with this, and please keep us posted on how it works out.

http://editorial.autos.msn.com/artic...=983570&page=3

Here's another from Edmonds, these methods are called Spot Delivery and Yo-Yo Financing:

http://www.edmunds.com/car-loan/dont...financing.html

[LadyInTheRed]

I remember a clause in my purchase agreement saying that the sale was contingent on final approval and funding of the loan by the lender and that I'd have to return the car if the loan fell through and alternate funding couldn't be arranged.

This could be an intentional scam or it could be an honest error in calculations. Pam, I think your son needs to do what Pjmax did and go back to the dealer and tell them they can either find a way to make the deal work without costing him more money or they can return any down payment and trade in and take the car back.

[Pjmax]

Pam, it seems the consumer laws vary by state and I found this PA Code document:

http://www.pacode.com/secure/data/03...hap301toc.html

The part about financing is way down past the lemon law stuff. I'm not a legal person, but I hope this helps.
Sounds like, as LIR said above, if they don't make it right, they have to take the car back and refund your son for whatever he paid them. If I'm reading wrong, hopefully someone will correct.

[pamkev]

Thank you everyone for the advice. I say it's a scam and told him to call there bluff. Pam

[Logan]

I remember a clause in my purchase agreement saying that the sale was contingent on final approval and funding of the loan by the lender and that I'd have to return the car if the loan fell through and alternate funding couldn't be arranged.

This could be an intentional scam or it could be an honest error in calculations. Pam, I think your son needs to do what Pjmax did and go back to the dealer and tell them they can either find a way to make the deal work without costing him more money or they can return any down payment and trade in and take the car back.

This got me thinking that the op's son should go on a nice long weekend drive and show up with 1K or more so it's no longer a new car (assuming it's a new car). They may have trouble selling it for the full price with enough miles on it and just eat the difference.
JUST A THOUGHT.

[pamkev]

No it's not a new car

[nceguyfromne]

They are trying to scam your son. I had a similar occurrence several years ago with a lease. Got approved, shook hands, signed all the paperwork, went home, returned the next day with my trade-in, was getting ready to leave in the new car and suddenly there had been a change of heart with the lender and they were denying the lease. Meanwhile, they had possession of my trade-in and a couple thousand dollars of my money (in cash) and were trying to convert me over to a used car purchase. Right then and there I demanded my money and vehicle back, to which they tried to give me a runaround about needing to mail me a check due to the amount. I raised my voice loudly enough to ensure every customer in the showroom knew how they were trying to play me and by some miracle, they found a way to pull my $2 G's out of the register and give it back to me.

I would recommending contacting your state's Attorney General's office.