Car Finance

thetallone

Does anyone know what repercussions there would be if a finance application was declined after the car was signed for?


I have been told by a certain car dealership that a car I was looking at had arrived there, and if I wanted the car desperately I could drive it away today. They were telling me that what they would do is tell the finance underwriters that the car had been signed for and then put the finance application in. According to the dealership, the finance application would automatically be accepted.


This is worrying me slightly as I don't know what could happen to me or the car.


Any help would be appreciated.

Tixy

Sounds like you'd be committing to buy the car whether or not the finance was accepted. So if the finance wasn't accepted then you'd still owe the dealer for the car and need to fund elsewhere.I would definitely not agree to purchase the vehicle until you have a decision from the finance company (or other means to pay for the car).

thebritishbloke

As Tixy has said, I'm guessing it would mean you agree to pay for the car regardless of finance being accepted or not. Make sure you read what you sign very carefully.

I wouldn't sign for the car until the finance is approved.

nelly12

If you commit to buy the car via a finance agreement and all applications fail then there is no contract. No dealership can force you any further on this. Be careful of the advice from amateurs on here who regurgitate and agree with previous incorrect posters.


Ps. The dealer telling you that a finance house will agree to accept a deal just because they say it has been signed for.... Ludicrous. What type of dealer is it? The salesman wants sacked!

thebritishbloke

nelly12 wrote: »

If you commit to buy the car via a finance agreement and all applications fail then there is no contract. No dealership can force you any further on this. Be careful of the advice from amateurs on here who regurgitate and agree with previous incorrect posters.


Ps. The dealer telling you that a finance house will agree to accept a deal just because they say it has been signed for.... Ludicrous. What type of dealer is it? The salesman wants sacked!

As I said in my post, it depends entirely on what the contract says. If it doesn't specify the payment method, or if it has a clause saying "If finance doesn't go through you're still liable for the total sum", then you're still liable to pay it.

I love how you say amateurs, when you have <1% the total posts that Tixy has.

forgotmyname

The issue is that they can probably find you finance, But do you want to be paying 60% APR?

You could be paying for it forever....

nelly12

thebritishbloke wrote: »

As I said in my post, it depends entirely on what the contract says. If it doesn't specify the payment method, or if it has a clause saying "If finance doesn't go through you're still liable for the total sum", then you're still liable to pay it.

I love how you say amateurs, when you have <1% the total posts that Tixy has.

love that quote on post numbers. I don't spend my life on here but help where I can. I work in Motor Finance, talk to dealers every working day of my life, have managed dealerships and so am qualified to give the benefit of my experience. If a customer fails on finance they would never ever be legally forced into any contract to purchase the vehicle. Hope you can see that it's quality not quantity that sometimes matters. And that my friend is in no way disrespecting Tixy's contributions to any thread!

Pablosammy

thebritishbloke wrote: »

As I said in my post, it depends entirely on what the contract says. If it doesn't specify the payment method, or if it has a clause saying "If finance doesn't go through you're still liable for the total sum", then you're still liable to pay it.

I love how you say amateurs, when you have <1% the total posts that Tixy has.

Surely if it doesn't specify a payment method, then it's not a legal contract? It'll have offer and acceptance, but no consideration. Please correct me if I'm wrong, though.

pinnit2014

This sounds like one hell of a dodgy dealership!

Clive_Woody

nelly12 wrote: »

love that quote on post numbers. I don't spend my life on here but help where I can. I work in Motor Finance, talk to dealers every working day of my life, have managed dealerships and so am qualified to give the benefit of my experience. If a customer fails on finance they would never ever be legally forced into any contract to purchase the vehicle. Hope you can see that it's quality not quantity that sometimes matters. And that my friend is in no way disrespecting Tixy's contributions to any thread!

My understanding is that the contract to buy the car is with the dealer and the contract for the finance is with the lender and that the two are exclusive, hence in many cases people are able to cancel finance deals within the permitted period without this having any effect on the car purchase.

I assume that it may be possible to include a clause that the car purchase is conditional on the finance company agreeing to lend the money, but the OP needs to be clear that this part of the written contract and also be aware that the finance company may not lend at the headline rate (APR) and they may find themselves forced to buy a car on finance at a very high APR if they decide to go down this route.

bris

Pablosammy wrote: »

Surely if it doesn't specify a payment method, then it's not a legal contract? It'll have offer and acceptance, but no consideration. Please correct me if I'm wrong, though.

Corrected, your wrong. Offer and acceptance is legally binding and payment method has nothing to do with it.


If you make an offer for something and the seller accepts then how it's paid for is nothing to do with the formation of the contract. You simply don't make an offer if you don't know if you can pay for it or not.


In this case the contract is key, if the offer is based on finance and it's rejected then the offer is not valid, if the op just signs for the car without this clause in the contract then they are liable for the sellers losses.