Overhaulin'

Can Capital One approve a car loan then take back the loan even after i have the car for 3 weeks?

I bought a car from Chrysler Financial 3 weeks ago. Chrysler owed me a bumper so i brought it in to be worked on. the car sat in the garage for 3 days. then i got a phone call from them telling me that Capital One took away my loan after owning the car for 3 weeks. can capital one give me a loan, sign all the paperwork, drive the car for 3 weeks and then say there taking back the loan? whats up with that, i never had that happen to me. I now have to give the car back. i have all the signed paperwork stating that the loan was approved and the car is okay to take home. What can i do, i will be without a car if i give it back? I called Capital one and they told me that it was approved. then about 2 weeks later they changed there mind. it does not say contingent on the lender approving the loan anywhere. i was told that i got approved for the loan

Public Comments

1. well in California the contract is with the dealer. and it is your car. the dealer has to honor the contract as signed. that is unless there was incomplete or fraudulent information on the credit application. but different states are just that they are different.
2. If the loan was not approved, you technically don't own the car because you never payed for it. You need to give it back.
3. The dealer gave you the car the same day you applied, without having a prior approval. This is called a "spot delivery". I'm sure the contract states somewhere on it that your ownership of the vehicle is contingent on the lender approving the loan exactly as the contract states. If they bank doesn't approve this loan, the dealer has the right to rescind the contract. Lots of times, the bank won't approve the contract as it is, but will give the dealer a "counter offer"-- another way to go. Talk to the dealer. Maybe you can put a little more money down, or pick out a less expensive car. If there is a way to sell you the car, the dealer definitely wants to do it. They don't want to take the car back anymore than you want to give it back. I know from experience that Capital One is VERY picky. They approve the loan, and the dealer sends them the contract and paperwork. THEN Capital One will begin the process of verifying your insurance, residence, employment, and salary information. If any of this verifies to be different than your application, or what the dealer submitted, they will rescind their loan offer. But yes, this is perfectly normal. It happens quite often, actually. At least, it does in CA, where I work. ** Edit ** What state are you in? If CA, it's the "Seller's Right to Cancel" clause on the front of the contract, and is explained in the "Seller's Right to Cancel" box on the back. If it wasn't contingent upon final approval (although I have a feeling it is), then possibly the bank found a problem with the application.
4. I'm afraid you may be one of the FIRST victims of a VERY serious new "Trend...": Because of the financial Upheavals in the Credit Markets, Banks are beginning to CANCEL their Loans to people (one of the things Our Government is afraid of happening- if they don't get the new "Bail-Out" Bill- passed). If the Bank finds ANY reason or risk- to "pull" your loan- they CAN do it ! -And You (& everyone ELSE) are up the Creek !!! See if you can get another Loan (maybe through the Dealership) from somewhere Else... But BEWARE: It's NOT going to be easy- OR cheap..! :(
5. There are so many things that can happen. The bank may have found some information you gave them on your credit application to be fraudulent or incorrect. The dealer may have found out the information before the bank and cancelled the contract to avoid being sued by the bank.....There really is not one specific thing. I will tell you though, if you bought your car at the dealer they never gave you anything stating you were approved. That would be illegal. They can verbally tell you that but they can't and won't show you the approval. Approvals are dependent on all things verifying. In some cases the dealer may have bumped your income, stated you have longer residence time than you do, or even stated you were at your job longer than you were. This is an illegal practice by the dealer but impossible to prove. Most dealers have you sign a "Bailment Agreement" that states they can get the car back if the bank does not accept the terms. I would have to know more about your specific situation and see the paperwork to determine an exact answer. Don't let this discourage you though. There are plenty of other banks out there and Capital One is not the best. They are a "Sub-Prime" lender which means they usually finance bad credit people. It could be as simple as the dealer had you sign the wrong contract and they have decided they don't want to honor it. Maybe the dealer felt they should have made more money on the deal and they decided to bring the car back instead of honoring the contract. Contracts are only legally binding when accepted by the bank and the bank funds the dealer for the amount of your purchase. Once that is done the car is yours. Also know that somewhere on something you signed, the deal depends on being accepted by the bank. I know you said nothing said that but you might want to look more carefully. A dealers only protection is that clause. There are plenty of banks that need the business so don't let this incident get you down. Look at it like a free ride for 3 weeks.
6. Capital One owes you an explanation as to why they turned you down after three weeks. Any time a lender declines to fund your loan they must give you a written explanation within 30 days. That's the law. Call them and ask why you were turned down. I doubt they'll tell you over the phone due to the privacy laws, unless they ask you for your SSN for ID. But even if they don't they do owe you a written explanation. The dealer has nothing to do with their decision. They're just the middle man. But you can ask the finance manager there if he/she shopped your deal around. If not, they could try that to see if somebody will fund it. I'm sure they want to keep this a deal and not have to unwind it.
7. Believe it or not NO contract is valid until the lender signs the contract. When anyone buys a car with a loan, take a minute and look and the places that require signatures. You will see spots for you, the seller and the bank to sign. 90% of the time when we as dealers sell cars, the bank does not sign until they have all the paperwork in hand. Before they actually sign the loan papers the bank has every right to refuse the loan. Same as any purchase agreement not signed by the management of a dealership isn't worth the paper is written on.