Helping a friend buy a car and he is running into a situation I can’t help with so thought I would ask here to see if others have had same issue.
First, he has bad credit. Found dealer in our area and he worked out a deal with them for new car almost 2 weeks ago. He signs paperwork, puts down decent down payment and even agrees to the added on warranty package. He brought in one form of income verification and dropped off second day after picking up the car. Finance manager and salesperson tell us the deal is done and he has been approved. However, they are keeping paperwork including title and giving him dealer plates until the bank (Chase) does final checking of loan – they claim similar to underwriting process for home. Also told him he would get a phone call in a couple of days from lender to confirm information and verify his contact info.
So, he drives off the lot with his new car, only some of the documents he signed and dealer plates.
Almost 2 weeks later, no phone call and dealer keeps telling him everything is fine they are just waiting for the bank to fund.
Others are telling him that bank actually turned down the loan and they are looking for another one but dealer says that is not the case.
Should mention dealer has very good reputation in the area (I htink!)
Anyone else have this situation?
Thanks
Thanks gotwheels.. – that is what I think too. He keeps calling the sales rep who keeps saying everything is fine (things just a little slow) but obviously it is not. He is going to owe insurance on new car next week (grace period is up) and I have suggested he talk to the bank directly before that but all I can do is suggest…
Thanks again!
BTW – there was no trade-in
Thanks everyone…
He actually got the call from the bank this afternoon. Everything is fine and payment book is in the mail…. Guess I should have listened/believed the dealer…
If he has bad credit, it is no suprise that it takes a while for the bank to find someone to give him a loan.They wouldnt have let him drive off the lot if they were not confident they could.
It does take time, so dont sweat it. BE sure to have full coverage insurance on the car, now.
its one of those deals…he should never drive off without the deal done…the dealer will soon call and say they need him to pay..or they will find a loan at a crazy high rate…or tell him he needs to put more money down to quaffile
well what might happen is he fails the check and they want their car back and he will lose what money he payed down.. shouldnt take but a minute to run a check… you can do it over the phone or online ten minutes maybe and most likely if he has bad credit its not going to pass
i have had this situation however my dealer after 3 weeks claimed i didn’t give a down payment and then said the bank approved the excess loan. however on the 4th week i contacted the bank directly and they told me what was really going on and that the dealership screwed up the deal and now they were trying to get more money from them. make sure this isn’t happening to you if it is then he is gonna have a long period of head ache.
I am a dealer and what the dealer did is called a spot delivery, when everything looks good on paper we will deliver the car and wait for final approval. When it comes the deal is done. Sometimes for whatever reason the deal is turned down, we get the car back and if we took a trade or deposit, us legitimate and honest dealers will refund the money and return your car at no cost. Sometimes a dealer will charge you as the car being a rental, sometimes the dealer will say we already sold your trade or fixed it and want money for it. Which believe it or not is legal as long as you signed the car title over to them. If the dealer is using a subprime lender it usually takes a little longer to get funded, but not 2 weeks. Something is wrong with that situation. Even if you got turned down you would have been notified by the lender not the dealer of the reason. As a dealer we can tell you the loan was turned down but not the reason for the turn down. We get notified first and that is normally 1 to 2 days after we submit the application to the lender. Now if you where turned down the dealer if he has other avenues will try to send your app to other lenders, but trust me if we try 3 or more lenders and all are turned down, chances of us getting you approved is none. So my advice to you is call the general manager of the dealership and get the number for the lender and speak to them directly. They will know whether the deal is dead or not. The dealer knows who got the app and number.
He has, per your statement, bad credit. The warranty package won’t make a bit of difference one way or the other, so I’m not sure why you mentioned that. Obviously lenders are looking at your friends credit and being cautious. Can you blame them? Eventually someone will say “yes” to the deal, although there might be some minor changes in down payment or interest rates.
The full investigation does take some time. If the dealer says they are just waiting on the bank, the chances are they are waiting on the bank.
Take the car back and get the down payment back now.
Or just let the down payment go and learn from this lesson. At least that pays for what is basically a rental car.
Just like the others said, he is in for a rude awakening when the approval is not granted.
Why do people drive away with cars where financing is not approved before driving off???
Be smart people!