Car Buying Question/contract

[LostinVA]

Okay, I went to a dealer, got a gREAT trade-in, a good deal, and a really good rate through VW. Signed all of the paperwork Tuesday, including the loan contract. So..... YESTERDAY they call and say I have to come back in and sign new paperwork, because the lender couldn't give them that rate, so they went to another bank. The good news is (they said), is that the rate is "almost" as good. Maybe a few dollars more a month. WTF????

Help em here: if I signed everything, took the car home, tags transferred,e tc.... wasn't the loan a done deal? Isn't the car mine??? Anyone who ever worked at a dealership understand this? Should I get a lawyer? What?\

I live in Virginia, btw.

Thanks!

[LynneSin]

1. Call your bank and check on a car loan through them

:D

[LostinVA]

2. That's not what I'm asking, though

I was wondering, though: is this legal??? I was brought up to believe that a signed contract is a signed contract.

[Spinzonner]

5. It is, if the terms are legal

But WHAT DOES IT SAY ?

[LostinVA]

6. What does WHAT say???

They are loan papers, with no loopholes in the fine print. No different than any loan papers... I've bought plenty of cars, signed plenty of loan papers, and never had anything remotely like this happen before.

[Spinzonner]

11. The purchase agreement/contract with the dealer

There ought to be one separate from the loan contract, which involves another party, namely the lender.

[LostinVA]

17. Yes, there is one

I guess everyone on this thread isn't understanding what I meant, and I guess that's my fault for not making it clearer: I signed the dealership agreement, the trade-in papers, and the loan papers FOR THE BANK contract.

I'm not wanting to know if it's legal, or a dealership CYA thing...

[Spinzonner]

23. SO what IS your question ?

If the dealer contract makes the transaction contingent on the loan (or contract law says the same thing) then it would appear that the transaction is not entirely closed.

Which would suggest that they could - and perhaps have to - get the car back. And that might also imply returning your trade-in to you, depending on what that agreement says.

However, its very unlikely they would want to since the care is now effectively a used car and they would lose greatly on the deal. SO, it would appear you have some leverage to apply to get the payments at or near where they would have been had the original loan gone through.

But you have to make sure the situation is on your side in that respect and that you are willing to be firm and, in effect, play chicken with them on it.

Also, don't forget there are insurance and financial responsibility issues involved here - especially if you've had the car for several days AND CONTINUE to drive it after you have been notified about the loan status.

[datasuspect]

13. nope

it is not a deal until the car is funded.

a "contract" between you and the dealership means jackshit.

the only real player in any of this is the bank.

YOU CAN SIGN EVERY PIECE OF PAPER and if the lender can't contact you for the interview, they will kick the loan back and the deal falls apart. hence no deal.

[LostinVA]

16. Even if you signed the loan papers?

[datasuspect]

18. exactly right

until the bank funds the loan, you have some leverage. use your imagination.

think about things ANY bank doesn't want to hear.

i've heard of deals getting nixed when the lender couldn't contact the borrower for the customer interview.

[Spinzonner]

3. What does the contract with the dealer say ?

There may be clauses that make the purchase conditional on the financing and otherwise obligate you.

Also, if the difference in payments isn't significant, do you really want to make an issue of it ?

Still, it does seem strange that they would allow you to take possession of the car without a loan firmly inplace.

Read the contract(s) carefully.

[LostinVA]

8. Yeah, I do want to make an issue of it

$10 more or so a month is alot.

[Spinzonner]

15. COnsider the consequences

IF they have the contractual issues on their side. There could be a serious effect on your credit score depending what and how it was reported.

That said, if you find and feel that the contracts support your position, you might make the point that you feel you have been subject to a bait-and-switch on the loan and hence on the deal. They might not be able to change the loan terms but they might - if pressed and concerned about the accusation - be able and willing to adjust the purchase terms to have a reducing effect on the loan payments back to or close to the original agreements.

[datasuspect]

19. $10 though really isn't that much

you'd be quibbling pretty much.

is the dealer whacking you with extended warranties/other unnecessary add ons they stick on the purchase price?

[HereSince1628]

4. Seems like it was a done deal, unless there was another piece of paper

or a paragraph somewhere that said the rate stated on the loan contract was subject to approval.

Before I lawyered up I'd ask the dealership to show you where that clause is hiding in the paperwork you signed.

[LostinVA]

7. I was wondering if there was a phrase like that, too

I went over the contract with a fine toothed comb last night, and found nothing. When I asked them about it on the phone, they were all... whatever.

I'm not planning to run out and just get a lawyer, trust me.

[Not Me]

12. Walk away. They'll call you back...

The dealer will find a way to bring it in at the agreed up on price...even if he has to lower the sale price to make the payments at a higher interest rate work.

[LostinVA]

20. I kinda can't -- I'll have no car

I traded in my car. I've had the new car for several days already. so if I walk away

[datasuspect]

25. that's the beauty of car sales

a classic mindfuck.

they "bailed" you on the car.

you have no obligation to keep the vehicle until the lender funds it.

period.

all dealer paperwork with is practically non-legally binding.

[datasuspect]

10. nope. there is no deal until car is funded.

[datasuspect]

9. THIS IS IMPORTANT

it is not a deal until the CAR IS FUNDED through the bank.

even if you sign the bank papers and have your rate, you have the power until the bank funds the vehicle.

ANY OTHER DEALER REQUIRED PAPERWORK IS NON-LEGALLY BINDING.

please trust me on this . . .

[datasuspect]

14. if the payment amount varies by about $10

have the dealer drop THEIR price by about $50.

figure 20-30 per 1000 when you are calculating note payments.

[LostinVA]

21. Okay, I was thinking about that

Asking them to take off $200 off of the purchase price. Thanks!

[Cathyclysmic]

22. umm..classic bait and switch

[Spinzonner]

24. A bit strong and presumptive

unless there is reason to believe that the dealer knew that the loan couldn't be funded at the contracted rate. Doesn't appear to be evidence of that at this point.

AT best, it would appear that either the dealer didn't follow procedure before doing the loan paperwork or that the bank isn't playing straight. Either ought to be a problem for the bank or dealer, not the opurchaser - who appears to have acted totally in good faith.