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 mission is to help you make smarter financial decisions by providing you with interactive tools and financial calculators as well as publishing quality and impartial content. This allows you to conduct research and compare data for free to help you make informed financial decisions. Bankrate has agreements with issuers including, but not limited to American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Earn money The products that appear on this site come from companies that pay us. This compensation can affect the way and when products are featured on the site, such as, for example, the order in which they appear in the listing categories in the event that they are not permitted by law. Our mortgage home equity, mortgage and other home lending products. This compensation, however, does affect the content we publish or the reviews that you read on this site. We do not cover the vast array of companies or financial deals that could be accessible to you. MoMo Productions/Getty Images
4 min read Published August 11, 2022
Written by Sarah Sharkey Written by Contributing Writer Sarah Sharkey is a contributing writer for Bankrate. Sarah writes about a range of topics, including banking, savings tips, homebuying, homeownership and personal financial matters. Written by Rhys Subitch Edited by Auto loans editor Rhys has been editing and writing for Bankrate from late 2021. They are passionate about helping readers gain the confidence to take control of their finances by providing concise, well-researched and accurate information that breaks down complicated subjects into digestible pieces. The Bankrate guarantee
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We receive compensation for the promotion of sponsored goods and, services, or through you clicking certain hyperlinks on our website. This compensation could affect the way, location and when products appear within listing categories and categories, unless it is prohibited by law for our mortgage or home equity products, as well as other home lending products. Other factors, such as our own rules for our website and whether a product is offered in the area you reside in or is within your self-selected credit score range may also influence the manner in which products are featured on this site. Although we try to offer the most diverse selection of products, Bankrate does not include information about every financial or credit products or services. After working with a dealer, you drive off in your new or new-to-you vehicle with confidence. While the financing hasn’t been accepted yet, spot delivery permits you to drive your brand new vehicle off the lot right away. Then, after a few days you get a phone call that no one wants to receive: Your loan has fallen through. If you are in this predicament the next step must be to determine if there is a problem with the application that resulted in the denial or if you’ve fallen victim to a spot delivery scam. Are you able to be denied an auto loan after preapproval? Although the likelihood of this happening due to a legitimate reason is very low, you can even drive off the lot. Here are some typical reasons for this: You lost your job. The lender will likely check the status of your employment before processing your application for financing. If they’re unable confirm your employment status due to dismissed, laid off, or resigned, your application might be rejected. Your income went down. Whether it’s the result of a job change or reduction in hours by your employer The lender might decide that you are pay the car payment each month and decline the auto loan. Your application contains unverifiable information. Are there typos on your application? Did you get a new job or relocate after being approval by car loan? This is a reason for the lender to decline your loan in the event that you fail to notify them of the modifications. However, there are occasions where your financing could fall through because of a spot delivery fraud. In this case you’ll need to take swift action to have the situation rectified to avoid becoming a next time a victim. Be aware of signs that indicate a spot delivery scam When a dealer allows a spot delivery, which means you can leave in your vehicle within the same day that you sign the paperwork. However, the actual funding of your loan may not be complete just yet. That’s especially true if you come to an agreement with the bank after they have closed. See how the dealer reacts If the dealer is offering to declare the vehicle stolen or repossess the vehicle immediately, then you’re probably dealing with a fraud. It is crucial to remember that not all spot delivery scams are scams. Mistakes can happen. And a legitimate dealer may permit delivery on the spot, but they may make an error in your calculator on your loan application that leads to the loan being denied. If the dealer is able to assume that a buyer wouldn’t be approved at the and asks the buyer to sign to purchase the car with a higher rate of interest, then something fishy is likely to be happening. Look at the original documents Take a look over the initial purchase documents. If there was the ‘Seller’s right to Cancel’ or ‘Limited Right to Cancel’ form, you are likely a victim of a scam. Otherwise known as , these documents leave room for the seller to pursue a bait and switch scenario. In essence, this means that you’ll be required to make a payment that is higher than the set price of the vehicle. Fortunately, such documents are not legal in all states. But if you find an exception in the pile of paperwork you originally completed, it’s likely that you’re dealing with an unscrupulous dealer. What should you do if you’ve been scammed ? The sad truth is that scammers exist in almost every industry. Car dealerships aren’t an exception. If you’ve fallen victim of a scam involving delivery on the spot, gather all of those original papers. Contact the department of . The staff will have the ability to help you navigate your options at a state-specific level. In certain instances, investigators might request the timeline of events related to your car purchase. It is recommended to write down every detail of the procedure. Otherwise, it could be difficult to put the pieces later. How can you protect yourself in the future If you’re in the middle of a scam involving delivery on the spot, there are actions you can take to prevent this from happening again for the future. Be wary of ads from car dealerships Always read the fine print to learn more about the savings and rebates the dealer is promoting. Many come with conditions that could make them unavailable to you. Find dealerships you can work with A quick Google search will assist you in finding a dealership within your region that has the best customer reviews. Avoid dealerships with several negative reviews or with a an image of having shady deals. If anything about a dealership makes you uncomfortable, find someone else to do business with. You can arrange financing directly through a lender instead of using dealers for financing via a bank, credit union, or online lender. Before heading to the car dealership make sure you get the best price on financing. Take your time Although buying cars isn’t easy, don’t do the paperwork in a hurry or sign without reading the fine print to ensure you get the deal done. Avoid a spot delivery You might not be thrilled with the idea of having to wait around until your loan is accepted, processed and financed to drive off in your brand new car. But, avoiding spots could eliminate the risk of a spot delivery scam. The bottom line is that a spot delivery scam is financially and emotionally taxing. If you are seeking a vehicle, the best choice is to secure finance directly from the lender. Do not rely on dealer financing. Dealer financing is not only generally more expensive however, you’ll also be exposed to the risk of being a victim of a spot delivery fraud. Therefore, if you’re seeking a reliable lender to work with, take a look at . Find out more about the company.
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Written by Contributing Writer Sarah Sharkey is a contributing writer for Bankrate. Sarah writes on a range of topics, such as savings tips, banking homeownership, homebuying and personal finance. Editor: Rhys Subitch Edited by Auto loans editor Rhys has been writing and editing for Bankrate since late 2021. They are passionate about helping their readers achieve confidence in taking control of their finances by giving clear, well-studied information that breaks down otherwise complex topics into manageable bites.
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