Can the dealership take the car back and can I get into big trouble?

I recently purchased a 2012 Honda Civic, and I financed the car from a certified pre owned Honda dealership. I signed everything, I payed off my previous car taxes, and I got a emissions test on the vehicle. The deal was sealed and I've been driving for a week now. The dealership called me back today and stated that the bank declined the loan, although he told me it was already approved and I provided my pay stubs and everything. He states we can go through another financing company but I must return the car today or he will call the cops to come to my job. Why did he have me sign the bank loan if I wasn't approved? And why can't I hold on to the car while he's getting the approval from another bank? Do I have any legal rights in this? Can he even call the cops? I'm not stealing the car, but this isn't right or it doesn't seem right.

This happens every day, especially when the customer has credit or income problems. A dealer can't tell you that a loan has been approved because he doesn't know until he tries to get you approved with one of his banks or finance companies. The papers you signed were a loan *application*, not a loan approval.

Since the dealer apparently can't get you approved, and your credit/income problem is so bad that he knows he really can't get you approved with any of his banks, he wants HIS CAR back, since he hasn't been paid for it.

You have no legal rights because one of the papers you signed actually stated that the deal was contingent on the dealer successfully finding financing for you.

I suggest you go to a couple of banks or credit unions and arrange your own financing. However, if you have serious credit or income issues you may have no success there either. Do you have someone who will co-sign with you -- someone with better credit/income?

No cops are coming but you have to give it back or make a new deal.

He likely got you to sign the forms in advance of approval to save time. The bottom line is you don't own the car, it is not your property you have to return it now. It is stealing if he has told you to return it as your bank have declined your loan.

When you finance through a dealership, they make an educated guess on whether or not you will get approved for a loan. If they believe you will get approved, they will tell you so, and will hand you the keys to the car. Very seldon are buyers approved in real time. They then send your application out to the bank(s) they work with to see which one will take the deal. In your case, none of them did, and you have not really bought a car. The deal isn't done until a bank finances the deal. You have to return the car because it is still the dealer's property.

YES it is called the spot delivery scam and it is one of the most popular LEGAL scams dealers pull.

"They call this the spot delivery scam because you took delivery of your new car using on the spot financing. This really means you drove off with the car before financing was complete, even though I bet you thought it was complete. Some of our site visitors have told us the dealers used scare tactics, warning the customer they would report the car stolen to the police if the customer does not come back in and resign the new paperwork."

"There's complicated legal verbiage on most car dealer sales contracts stating "subject to loan approval." This loaded statement means: "The deal is not final, even though you signed this contract." They will then lower another hammer on your head, stating that you need to come back in with an additional $1,000 or more and now and your monthly payments will go up because of the new higher 15% APR. Some car shoppers have told me their APR shot up to 21%."

https://www.carbuyingtips.com/top-10-scams/scam1.htm