New Car - nearly a month later the bank denies loan....options?

Reverend_Chaos

I live in Washington state.
I purchased a used car from a dealership mid-April. Put down $4k on a $8k car, with fees and warranty the loan came to $6k and change. I just got a letter from the bank telling me that they will approve a loan at $5k with referrences and proof of residence and income etc. (no problem), however this leaves me with a gap of just over $1000 that I do not have. Also, they sold me the car with studded snow tires on it, so I can't even drive it until I get new tires, the dealer already told me too bad when I asked for non-studded tires. The dealer has not contacted me yet surprisngly.

I could obviously get a loan through another lender at a higher interest rate (not preferrable)
I could have them take the warranty off, which would drop the loan amount under the $5k, but I am worried about future repair bills. Unless there is a better option though, I think I might have to do this.
--Is there anything else I can do? I just really want to know my options before I call the dealership.
Can they Repo the car and keep my $4K? This is my biggest concern.

aioua

Grab your loan/purchase docs. There should be something in the agreements on the procedure when the financing falls through. IIRC in WA state there's a certain time limit they have to inform you by.

How did you originate the loan? Did you go to the bank first for approval, or did it go through the dealership?

Reverend_Chaos

Loan was done through the dealership.

aioua

Reverend_Chaos wrote: »

Loan was done through the dealership.

Then there has got to be something in your loan/purchase contracts going over this scenario. That's the place to start.

DevoutlyApathetic

TO THE GOOGLES:
http://www.atg.wa.gov/ConsumerIssues/Cars/car_buying.aspx#.U2qHSfldWtY

Changing the Terms of the Contract
After a deal is agreed upon and the contract signed, if you are contacted by the dealer saying they now need a larger down payment or higher monthly payments, you are not required to accept these new terms.

By law, the dealer has 4 working days from the time of purchase/lease (excluding weekends and holidays) to find financing and finalize the sale according to the terms of the contract. When the dealer fails to locate the financing specified in the contract in that time period, there is no binding contract and the dealer must offer to return your contract documents, down payment, and trade-in vehicle before attempting to negotiate a new agreement with you.

If you have taken possession of the car, you must promptly return it when notified that the transaction cannot be completed within the 4 working-day period.

So it's sounding like you give them back the car, they give you back all your cash and you find someplace not staffed by asshole jerks to buy a car from.

I would be leery as shit of any place that charges over a grand for a warranty. Not a place I'm going to want to buy a car from.

This link also says some stuff about warranties and implied warranties you may want to read before you go back to them.

Djeet

Yeah, get your docs. Most likely the verbiage all has the caveat WAF (with approved financing). I'm surprised it went this way. The way I've heard it happen is your financing falls through after you take delivery, and they want you to sign a new financing contract, at 500 basis point higher.

More important than the possible better rates, deals falling though this way is the best reason to secure financing (not through the dealer) before you start a deal.

Unknown

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Jasconius

This has actually happened to me before when I was in college. The Honda dealership ended up meeting me half way so I could keep it.

In short: yes they will take your car. and it will be the dealer, not the loan company, because the dealer hasn't gotten their money yet. expect a call.

in essence you have not paid for the car, your purchase contract will be declared invalid and you have to return the car or it will be counted as stolen.

but yeah, obviously make sure you get your 4k back before you sign anything or even show them the key, frankly. sounds like you bought it at a shady place.

DevoutlyApathetic

Yea, if they gave you studs which are at least seasonally illegal, then I would not buy from them. Take it as a gift from the fates and get the fuck out.