NEVER DRIVE OFF THE DEALER’S LOT WITHOUT WRITTEN ASSURANCE OF LOAN OR LEASE APPROVAL
Buying a new car is an exciting experience, but it can quickly turn sour if you drive away without ensuring your loan or lease approval. Imagine this scenario: you’ve traded in your old car, signed the paperwork, and driven off in your shiny new vehicle, only to receive a call days or weeks later saying that your financing fell through. What now? Here’s how to navigate this unfortunate situation and protect yourself from similar issues in the future.
The Scenario: What Went Wrong?
Often, the problem arises when care dealerships allow customers to take possession of a vehicle before finalizing approval. This practice can occur late in the evening or on weekends, when loan analysts may not be readily available. Without written confirmation of loan approval or lease acceptance, you might assume everything is in order, only to discover otherwise, later. This is known as a “spot delivery” and is sometimes referred to as a “yo-yo sale” or “yo-yo financing.” Some states regulate this.
STEPS TO TAKE:
Understand Your Rights
Firstly, know your rights in this situation. Laws vary by jurisdiction, but generally, once a contract is signed and you take possession of the car, you might be legally obligated to the terms of the contract. However, the dealership also has responsibilities, especially if they failed to secure financing as promised.
Communicate Clearly
Once notified of the issue, communicate promptly and clearly with the dealership. Remain calm and professional, but assertive about your rights as a consumer.
Review Your Contract
Carefully review the paperwork you signed. Look for any clauses related to financing contingency or the dealer’s responsibilities if financing is not secured. Understanding these terms will help you assess your options better.
Seek Legal Advice
If the dealership refuses to cooperate or you believe your rights have been violated, consider seeking legal advice. Consumer protection laws vary, and an attorney specializing in automotive issues can provide guidance on potential remedies or actions you can take.
Explore Alternative Financing
While resolving the issue with the original dealership, explore alternative financing options. Your bank or credit union might offer a loan, though rates and terms could differ from what the dealership initially proposed. This is a difficult position to be in.
Document Everything
Keep records of all communications with the dealership, including emails, letters, and notes from phone calls. Documentation will be crucial if you need to escalate the issue further or pursue legal action.
Review Your Options
Depending on the circumstances, your options may include renegotiating the contract with the original dealership, finding another vehicle, or seeking compensation for any costs incurred due to any dealership error.
Prevention for Future Transactions
To avoid similar situations in the future, consider the following precautions:
- Get Written Confirmation: Always ensure you have written confirmation of loan or lease approval before taking possession of the vehicle.
- Timing Matters: Try to finalize transactions during business hours when loan analysts are available to expedite the approval process.
- Know Your Credit: Be aware of your credit score and financial situation before visiting dealerships. This knowledge can help manage expectations and avoid unexpected surprises.
- Read Contracts Thoroughly: Take the time to read and understand all documents before signing.
Conclusion
While purchasing a new car should be an enjoyable experience, the potential pitfalls of driving off the lot without approved financing are significant.
