What happens if you don't get approved for a car loan after your purchase?

I have bought a car two weeks ago and at the time we applied for 20k $ car loan, we deposited 8k and I was planning to deposit another 4k next week. Now we have received the letter( third party) that we're not approved for the car loan. Does that mean I have to return the car? If so why the Honda company (where we bought the car) didn't tell us anything before we receive the letter? What options do I have?

Check with the F&I manager at the dealership. Usually, he/she will send out the loan to more than one lender. It's possible that just one turned it down.

HOWEVER… If all of the lenders turned it down for some reason, you MUST return the car. Any finance contract you signed that day is contingent upon the lender's final approval. Once the lender provides the final OK, then the deal is done. Until that occurs, it's not final.

To clarify one thing… You don't hold any cards here if the lender denies the deal. You can't keep the vehicle, "hold it hostage", etc. It is the dealer's property until the lender provides final approval.

The Honda dealer made an educated guess based upon your credit history and down payment that you would be approved. The lender may say otherwise. When they have you sign paperwork and take delivery, that's called "spot delivery" and is common in the industry. It's a gamble that the dealership reps take, and sometimes it backfires. This might be one of those times.

Yes, you have to return the automobile unless you can secure financing elsewhere. That is ultimately your responsibility, not Honda. Go to your bank or credit union and apply for a loan as soon as possible.

See my other answer on this topic. DO NOT sign a new contract with bad terms. And NEVER take a car on spot delivery. An auto loan is usually approved or declined in 30 minutes or less, so they most likely knew you were not approved with Honda finance.

Letters don't mean anything. The dealer calling & wanting the car back is when things get serious.

Its very possible you were turned down at 3 lenders and approved at a 4th.

And whenever you are turned down for credit, you get a letter.

Generally, the dealer will be calling you before you get a letter if financing was not approved. With $8k down, someone approved you. The dealer was just looking to make more on financing.

You obviously have bad credit, which means the dealer can't get paid for the car, which means it still belongs to him, which means you have to return it.

You can apply to your local bank or credit union or have the dealer check to see if they have other lenders available.

Why would you complete the purchase before you have your finance in place. Are you that impatient?