Why Would a Dealership Allow Someone to Drive Off the Lot Without Full Financing Approval?

Have you ever encountered a situation where a dealership allowed you to drive off with a brand new car even though the financing details were still pending? This wasn't just a theoretical situation for me; it happened to me when I bought my first brand new car at 23. Initially, everything seemed fine, but three days after the purchase, the dealership called to inform me that the financing hadn’t gone through despite my down payment and excellent credit score. My boyfriend, who had just tried the car out, was unfortunately involved in an accident, which added to my disbelief and frustration.

What Went Wrong?

I brought the car back from the shop with my boyfriend and we double-checked the paperwork. The issue was that the dealership didn’t apply my deposit and merely added the entire financed amount. This oversight was a clear indication of why the financing had not gone through. The dealership had overcharged me, attempting to finance an amount that was more than what I had agreed upon. It was a case of fraud, and it was crucial that my son was made aware of this to ensure he reviews his contract and recalculates to confirm he’s getting the deal he initially agreed to.

Reasons Behind Early Car Delivery

There are various reasons why a dealership might allow someone to drive off the lot with a new car before full financing is secured. Here are some of the most common ones:

Conditional Approval

The dealership might have given a conditional approval based on preliminary credit checks or income verification. This means that they believed the buyer would likely be approved, but the financing hadn’t been finalised yet.

Sales Pressure

Dealerships often operate on tight sales targets and may allow a customer to take the car home to close the sale, hoping that the financing will go through later. Prioritizing the sale over completing all the paperwork can sometimes result in an early delivery.

Trade-in Value

When the buyer trades in a vehicle, the dealership might allow them to drive off in the new car while the financing is still being finalized, especially if the trade-in value is significant.

Mistake or Oversight

Clerical errors or oversights by dealership staff can also lead to early delivery. It’s possible that they didn’t realize the financing was not fully approved at the time of the sale.

There are also policy variations across different dealerships. Some may have more lenient policies that allow vehicles to be taken home while financing is pending.

What to Do if Your Car Is Being Demanded Back

If the dealership is asking you to return the vehicle, it’s crucial to review the sales contract and any documentation provided at the time of the sale. Consulting with a legal expert or a consumer protection agency can be beneficial to understand your rights in such a situation.

For my son, it was a hard lesson in the importance of reviewing all contracts and understanding the financial implications before finalizing a deal. Dealing with such issues can be challenging, but staying informed and proactive is key.

Remember, the ultimate goal is to ensure you are getting the car you agreed to and that you are not being overcharged during the financing process.