If Ipurchased a used car from a reputable dealer and they have not secured financingat the agreed upon rate, what are my rights?

At the time of purchase, the terms of the loan were set at 9.9% for 72 months. These were below the projected norms for my credit, but the finance officer said he would work to try to make the terms work. It’s been 10 days and they have yet to secure the financing, and I don’t believe they will be able to. Once the ten days have past, what are my rights? I have since decided that I don’t even want this car. Am I stuck after 10 days regardless of what they are able to approve me for?

Asked on July 20, 2010 under General Practice, California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

1) Unless the contract of sale specifically provided a certain date or period of time (e.g. "all contingencies and financing will be arranged within 10 days") there is no hard-and-fast cut off date as to when they must have the financing set up. At some point, if they can't arrange it, you may be able  to get out of the contract (see below), but it may take some back-and-forth on your part to establish a date with them (e.g. contact the dealer in writing, in some way that you can prove delivery, and let them know that it's already been X days and that if they can't arrange financing within another, say 10 business days, you will consider the contract breached or terminated).

2) Whether or not you have to take whatever financing they cann arrange for you depends on what it says in the contract or agreement of sale.  Does it provide that you will get the 9.9% financing? If so, unless they can provide that or better, you will have good grounds to get out of the contract. However, if it does not specify a rate, if they can find you a market rate (taking into account your credit, etc.), you might not necessarily be able to get out of the contract on that ground.


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