Car loan not approved. I may have to turn the car back in within a Week?

Okay, I bought a car about three weeks ago from a Honda dealership. I explained to the sales person that I can only afford $450/month (both car payment and insurance) so i got "approved" at the moment for the loan. I trade in my old car and I drove off the lot the same day with my new Honda. Three weeks later the bank wrote me a letter saying that they were unable to approve the loan after looking into it further. I'm thinking that maybe they want to raise the interest rate to a higher percentage. I went by the dealership less than an hour ago and they were close. However, i saw my old car there. Can I give the Honda back and ask for my old car back? What options do I have here? Like I said earlier, I can't afford more than $450/month. Can they refuse to give me back my old car (Which is paid off for years ago)
19 minutes ago - 4 days left to answer.
Additional Details
- I did not buy my insurance from the dealership. I insured it through Allstate.
- I shouldn't say new car. It was a certified pre-owned vehicle with few minor scratches on it… No dents whatsoever.
- I was buying everything cash/debit for the past ten years. Therefore, I lack a credit history… Hence the "not approved"

This is rather common that a dealer will let you drive off in the new car before the bank actually approves your credit. The dealer usually has you come back and fill out more paperwork for a different lender with higher interest and requiring you to pay more down.

Since the financing fell thru, you can return the vehicle and get your old car back. You are lucky the still have it. Normally that gets wholesaled off within a couple days. You may have to pay milage or some kind of daily fee for the period you had the new car. It could add up to a chunk depending on what the contract terms say. Check out the fine print on the financing paperwork your signed.

As an option, uou could try to get your own financing. Credit unions are more likely to work with people with limited credit history. However, it could take some time to go thru the process.

How the heck did they let you leave the lot without proof of financing?

Had you been wise you would not have taken possession of the vehicle until financing was approved. Unfortunately for you you chose otherwise. Because you did unwisely take possession you are now liable for that vehicle and will have to pay the dealership for the time you had it. They may or may not allow you to return the vehicle and take possession of your prior vehicle. Regardless if they do or not you now own them for the use of the newer vehicle. Live and learn.

It's not "your" old car anymore. The dealership bought it from you. If they can't find financing for you, they have to make you whole, in other words, in no worse position than when you first walked in there.

Dealers don't approve financing. Only banks and finance companies can do that. If the dealer can't find someone who will provide you financing (probably due to no credit), the deal is not done and you'll have to return the car. If the dealer has your old car, he has the option of handing it back to you or paying you it's value.

In the future, if you know you have no credit or poor credit, DO NOT take the car home until you get confirmation from the finance company or bank that you have been approved. Dealers often let customers take the car home, HOPING that he will be approved, but hope doesn't always make it happen, as in your case.

Your plan was not well thought out.

If the loan fell through the dealership may have a different loan program you can go through. If you just want your old car back you can do that also. You should not be paying interest on a depreciation anyhow as that is very poor economic planning.

Best case is they give you your old car & call it even. But they probably want money too.