Can a dealership make you sign a second contract on a car loan if the first bank declines after you sign the contract?

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Can a dealership make you sign a second contract on a car loan if the first bank declines after you sign the contract?

Purchased a vehicle; traded one in; signed a contract. Bank ended up declining the approval, dealership has a new bank approval and wants me to sign a new contract with the new bank. I don’t want to do the deal now and the dealership is saying I have to. The first contract is null and void. They have already sold my trade in and saying I have to sign the new contract, which has changed also. Not sure how to handle the dealership.

Asked on December 22, 2010 under General Practice, Florida

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

What a predicament.  I think that it may be best for you to go and seek help from an attorney in your area.  Someone needs to read the contract that you signed and see if there is a clause that deals with what happens if you werenot approved.  Although I would tend to agree with you regarding the validity of the contract at this point in time I want to make sure that you did not bind yourself n any other way.  I also agree that they can not force you in to a new contract with new contract terms.  They may be running scared because they jumped the gun and sold your car.  Get help here.  Good luck.


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