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    Can auto dealership cancel finance contract 2 1/2 months after purchase?

    We live in Utah and on February 2, 2009 purchased a vehicle from a local prominent auto dealership with a voucher from an Internet based lender. The dealer also had us execute a finance contract with them that contained terms that were identical to those associated with our voucher. We drove the vehicle off the lot and have been driving it since that date, with a temporary permit issued by the dealer that had an expiration date of March 12, 2009. When that date was approaching and we still hadn't received our license plates from the State of Utah we contacted the dealer, several different times and spoke and/or left messages for different people asking why we hadn't received either our license plates or payment book etc. We were never given any answer other than they were still in the process of having our loan funded. Just two days ago we received a phone call from the dealership telling us that they were unable to get our loan funded through our voucher because they had lost their status as "an approved dealer" with this Internet lender, due to their having some kind of conflict of Interest because of their relationship with an affiliated lender. They told us we have two options: (1) to return the vehicle to them - with no charge whatsoever to us for the vehicle, or (2) to find a co-signer (with impeccable credit) to help us finance the vehicle with one of their other lenders. We really like this vehicle and want to keep it. We have a finance contract executed with the Dealership that appears, on its face, to represent a contract between us as the buyer and them as the seller (finance party) that I believe any common person who knew nothing whatsoever about our transaction would determine by reading just that one document that they (the dealership) are the party to whom we are obligated to pay - meaning that they have in fact financed our loan. We told them we are ready, willing and able to make all payments to them called for in this contract. They respond by telling us that they do not internally finance any vehicles and that the law is in their favor and have given us until this coming Monday (2 days from now) to either return the vehicle or provide a satisfactory co-signer. Are they legally obligated to finance our vehicle? - keeping in mind that it was 2 1/2 months from the date of sale until they ever notified us of a problem...
    a few seconds ago 2 Answers

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    Auto finance is what I do for a living and this is called a spot delivery which means that while the dealer has a approval from a lender until the lender pays the dealer your simply borrowing the vehicle. Since the dealer lost their approved dealer status they can not get paid be the lender so in this case they are most likely right you must either return the vehicle or come up with a approved co-signer and sign new paperwork which could actually work in your favor because you could get a better interest rate with a good co-signer. A couple of things you need to check on because this is very weird, did you in fact sign a spot delivery form? Go through all of the paperwork they gave you it should say spot delivery at the top of the page. Also the weird thing about your problem is that approvals are only good for 30-days from the date they are issued and since it's been well past this it indicates that the dealer had major problems with the lender. You need to consult a lawyer (if you truly want to keep the car and can not find a co-signer) it's very possible that you can force the dealer to "kiss the paper" which means that they would have to accept the payments themselves rather then going through a lender especially since this was their fault and not yours. Good luck. These kinds of problems is why I don't do spot delivery's
    a few seconds ago

    Other Answers

    • They are giving you two days to get this settled because they know there is no way possible that you can arrange your own financing (which you should ALWAYS do before purchasing a vehicle). No one is obligated to finance anything regardless of your credit rating. You can try to negotiate with them for two weeks time, telling them that you want to arrange your own financing. If not, demand the return of your money (if any), return the car and start over. If you use one of their lenders, you'll be paying extortion rates of interest for the loan. Don't do it.

      by Dan B - 20 hours ago

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