If I was not approved for a car loan but I already have the car, do I have to return it?

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If I was not approved for a car loan but I already have the car, do I have to return it?

Applied for auto financing at time of application all information was true except the contact person. I then changed my mind so terminated shortly after; did not tell car dealer. Loan approved and I received my car 2 weeks later. Dealer told me that the bank could not verify employment. I have new employment so I provided info from new job but the bank still denied the loan. Dealer keeps searching for funds but having trouble. The car is registered to me. If I don’t return the car can I be charged with something?

Asked on July 5, 2011 under General Practice, Michigan

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

If you keep the car and don't pay for it, at a bare minimum, you can be sued for the dealer for the money you owe it. It is also possibly--quite possible, in fact--that you could be charged with theft since you have knowingly kept property to which you are not entitled (knowingly kept a car which you know has not been paid for). You have an obligation to pay for the car--you can't take or keep it without paying, even if you were able to register it prior to the failure to pay being discovered. The fact that any particular loan didn't go through is irrelevant--whether it's by loan 1, loan 2, cash from your savings or 401k account, etc., you have to pay for the car. Since you evidentally have knowledge that you haven't paid, that means that what you're doing may be criminal, as well as grounds for a lawsuit.


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