What to do if my girlfriend bought a new car from a dealership but now it says that there is a problem with her loan?

UPDATED: Jun 2, 2013

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What to do if my girlfriend bought a new car from a dealership but now it says that there is a problem with her loan?

She signed a contract stating she works full-time when she works closer to 24 hours. She was given the car and now a week (not driven at all) or so later the dealer is calling, saying the financing company will not approve the loan and she needs a co-signer. Can she return it? If so, how and what should she do? What are her options?

Asked on June 2, 2013 under Business Law, California


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Your girlfriend has serious trouble. The financing fell through because your girlfriend lied on her application; therefore, it did not fall through due to anything the dealership did. As a consequence, she is obligated to the contract. The dealership can certainly take the car back, but they may also sue her for money due to them under the contract--for example, say the total of all payments she has to make, including interest, etc., under the contract is $25k; if the car (which has started to depreciate) is now worth $19k, they could take the car back and then sue her for the other $6k. They could also likely seek to recover legal, repossession, etc. fees from her. Her only options are to take her lumps; find other financing to honor the contract; find a co-signer, so she can get the loan; or negotiate to some other mutually agreeable settlment with the dealership.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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