Can a bank reject a car loan that they already accepted a week ago?

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Can a bank reject a car loan that they already accepted a week ago?

My brother bought a car in his name. The bank accepted his application and provided terms, payment, etc. He signed the paperwork and we took the car last week after giving them mine. The car is insured through his insurance company under him with his other vehicle and I am an insured driver. The bank called him earlier today to verify his information such as address, etc. Later they called the dealership and stated they were going to reject the loan due to me driving the car. Can they legally do this?

Asked on March 5, 2012 under General Practice, Kansas

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

If there is an agreement in place for a loan as to the car that you are writing about where the dealesrhip has been paid for the car and there is insurance in place for the vehicle, the bank cannot end the loan unless there has been a breach of the loan agreement with respect to insurance coverage.

From what you have written, if there is an issue with you driving the car with the lender, I suggest that your name be placed on the insurance policy as an additional insured and a copy sent to the lender. That should clear up the issue from what I see.


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