Financing not approved on car loan after I've driven it home, need advice!

[pauljvalle]

What is the name of your state (only U.S. law)? California

I traded in an 2007 Scion tC with an existing loan still on it for a used 2012 mazda3. I was under 1758 on the loan and put down 1500 as a down payment, so only 258 got tacked onto the new loan. To get financed for the Mazda 3, the dealership told me the bank said I have to get a warranty and Gap insurance for the car. So eventually got to the paperwork and signed the contract w loan amount and financing terms and also one selling my 2007 tc to the dealership. Few days later the dealership calls saying that the financing wasn't approved at that I either have to take the warranty off or put down a higher down payment because the lender didn't want to approve the amount financed. I've been researching online, and I'm wondering if this is a "spot delivery scam". And I want to know what my rights are in this situation. If I return the car, do I get my Scion tC back with the existing loan since I handed over the title to the dealership?

Ps... The contract had a sellers right to cancel clause on the back that says contract is contingent upon approved financing and if not approved the seller has the right to cancel and that the buyer is entitled to a refund of any funds deposited as well as the trade in.

 

[Astrolink]

What did the seller say when you asked them your questions?

 

[pauljvalle]

What did the seller say when you asked them your questions?

I was actually going to go to the dealership today to talk to them about the situation, but wanted to get more information or advice about the position I'm in. I don't want to go into the dealership without having any knowledge of what's going on and what I can do

 

[FlyingRon]

The extended warranty was a scam anyhow, you'd be well advised to cancel it. I've never EVER heard of a finance company giving a rats ass about extended warranty. They lied to you. Gap insurance is a different story.

Note, you did not put down a $1500 down payment. You put down a negative down payment. The bank is rightfully so about loaning you more money than even the gap-insured car is worth.

 

[pauljvalle]

I spoke with the finance guy at the dealership today and he told me the lender approved me for financing but not at the amount my contract states. So he told me he'd have to take the warranty off to meet the lenders demands and increase my interest rate from 5.99 to 6.99%. if the original agreed upon contract cannot be financed, do I have to agree to these new terms? I don't want to be left without a car, but I fear that i've become victim to one of those yo-yo dealership scams

 

[Zigner]

I spoke with the finance guy at the dealership today and he told me the lender approved me for financing but not at the amount my contract states. So he told me he'd have to take the warranty off to meet the lenders demands and increase my interest rate from 5.99 to 6.99%. if the original agreed upon contract cannot be financed, do I have to agree to these new terms? I don't want to be left without a car, but I fear that i've become victim to one of those yo-yo dealership scams

No, you don't. You are free to obtain your own financing. I am curious though - how long ago did you sign the contract?

 

[pauljvalle]

No, you don't. You are free to obtain your own financing. I am curious though - how long ago did you sign the contract?

Last Saturday so a week ago. If the new deal ends up being less in total than what I originally was gonna have to pay, would it be wise to accept the new deal? Might sound like a dumb question...