Car loan rejection after sale - JimmyV

Dear Forum members,

I bought a car last month with finance arranged from dealer. Everything was smooth, but after three weeks the dealer came back saying the loan is rejected by the bank. As per his explanation the bank approved the loan initially based on which he sold the car. However after I signed the documents the bank rejected it presumably because there was some change in the credit file. This could be true because I applied for a credit card after getting the loan. Now the dealer is demanding full payment or return the car. This will make my life miserable with debt as I have to borrow the money with huge interest.


What are my rights in this case? Can I demand the original payment period and monthly installment from the dealer and resist him taking the car back? He will pay back the full amount, but I really don't want to return the car.

Edited by JimmyV on 27/07/2011 at 15:44

Car loan rejection after sale - bonzo dog

Hi Jimmy, sorry to hear of this; it is certainly an unusual one!

What you need to do is speak to the finance co direct & find out exactly what they have said & why they have said it.

As regards your credit card application, this will have nothing to do with it. The loan for the car will be based on information they had at the time; you could loot Fort Knox & they couldn't recind your finance agreement.

The most common reason for this is that they were given incorrect info on you or the car; either by you or the dealer; either intentionally or unintentionally. This has now come to light so they want to cancle the agreement.

It could be that the dealer has made a mistake on the monetary aspect of the deal (ie he has realised he is losing money) so he wants to unwind the deal - this is why you need to speak to the finance co.

Good luck & let us know how you get on

Car loan rejection after sale - JimmyV

Thanks for the advice Bonzo.

The dealer tried with a couple more finance companies and they also rejected the loan. The dealer read me the response from the original finance company and the response didnt exacly say what is the reason for the rejection. In the end me and the dealer agreed to a deal. I paid back 3000 from the original 5000 I owed right away from my credit card.I will pay back the the balance 2000 pounds in 5 months as installments.

A bit of hassle for me because I need to do a lot of circus with my finances now. At the same time I am relieved that this exceptional problem is solved. And the dealer tend me be genuienly apologetic.

 

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