Can your car loan be denied after closing?

Can You Be Denied a Car Loan After Purchase? You can be denied a car loan after you’ve purchased it. It’s unlikely that a bank will do so, but it’s more common for a dealership to revoke a loan if you’ve financed through them.

What happens if your car loan is denied?

Getting denied for an auto loan doesn’t in itself hurt your credit score. The lender didn’t extend anything, so there’s nothing that can hurt your score. However, multiple denied applications at once could hurt your score. If you apply for too many loans, numerous hard inquiries on your credit can cause a larger drop.

Can an auto loan be rescinded?

There’s no such thing as cancelling a car loan. You can’t just bring a vehicle back to a dealership, hand over the keys, and state that you won’t be making payments anymore. However, this doesn’t mean that there’s no way you can get out of an auto loan that isn’t working for you.

Can a dealer return your trade in?

Dealer’s Right to Demand Return The standard California car contract only allows the dealer 10 days to find financing. The only thing the dealer can do is take the car back, refund you 100% of your money, and return your trade-in vehicle, if you had one. The dealer cannot charge you for mileage.

What happens to a car that is denied financing?

In most cases, after an auto loan financing is denied, the car is usually returned to whatever party holds the title, typically the dealer or the auto financing company. In specific situations, the buyer might not have to return the vehicle or could at least sue for damages.

What happens when a car loan does not go through?

Once the dealer’s loan fails, the dealership will likely contact you daily requesting that you return the car. If all efforts to find a car loan fail, you must return the car to the dealership. If you do not voluntarily surrender the car, the dealer can repossess the vehicle.

Can a car dealership take your loan back?

Even if you signed motor vehicle paperwork, the dealer will not process it. Signing bank contracts does not secure your loan either. The paperwork you sign at the dealership is sent off to a lender and state motor vehicle office for processing days after you complete it.

What to do if dealer denies your loan?

Another option may be to pursue the dealer. If they have made a mistake in the handling of your financing they may be liable for this situation. If you have signed a contract and the dealer or the bank with which the dealer brokered your loan you may have a claim for breach of contract.