New auto purchase, spot delivery, financial terms and income

[criticalthinker]

New Hampshire.

Good evening all,

New vehicle purchase. Buyers took possession of the vehicle before financing was completed (I believe the term is spot delivery). Large cash downpayment as well as a trade-in. Expected to finance the balance through dealer's lender affiliate (they failed to get pre-approved elsewhere).

Dealer told the buyers they'd be able to obtain financing with the terms disclosed on the financing TIL provided at the time of sale. Lender is including child support to qualify income and requested 3 month history.

During original sale buyers failed to mention that the past three months fail to reflect the fact that income from child support is not consistent. Ex-spouse in arrears and history of non payment for long periods. They did mention this to the lender however because they felt it might be an issue. Can this lender still attempt to push the financing though at the current terms knowing what it now knows? Seems like a CFPB ability-to-repay issue.

What if the lender insists on changing the terms of financing? Can the buyers walk from the deal for breach of contract (since they expected to get the terms on the TIL) or must they seek/accept financing at whatever terms might be available to them?

Kind regards,

CT

 

[OHRoadwarrior]

If the financing falls through they can likely return the car along with payment for its use. The trade in will be unlikely to be recovered.

 

[criticalthinker]

Thank you

Thank you OHRoadwarrior,

What I don't understand is why their sales contract does not appear to contain a finance contingency. I'm in real estate financing and typically a purchase & sale agreement contains a finance contingency. Is it even legal to exclude a finance contingency from the sales contract when offering spot delivery such that the dealership is fully aware financing isn't closed prior to delivery of the vehicle? Or is a finance contingency implied in all such auto sales contracts?

That process seems ripe for abuse - especially when so many consumers fail to do their homework in advance. Unfortunately, by the time they approached me for an opinion they had already signed the sale agreement, taken possession of the vehicle and were in the process of dealing with the lender.

I'll pass along your response. Thank you I appreciate it.