Can a car loan be rescinded if I already signed the contract and drove the vehicle off the lot?

I purchased a car from a dealer. At closing, they said my financing looked fine. I signed the papers and drove the car home. A week later, the dealership called and said that the lender had kicked back our loan. Can they take back my new car?

Sarah Gray · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Yes: A dealership can take a car back after you’ve signed the contract, even after you’ve taken possession of the vehicle. Most states allow 10 days for a dealership to cancel a purchase order.
In most cases, a dealership won’t retract a sale unless there’s an issue with your financing. However, you should have a few options to avoid having your car taken back:
  • Option 1: Increase your down payment.
  • Option 2: Find a different lender.
  • Option 3: Return to the dealer to figure out an alternative solution.
Another common reason a dealer (or lender) will take your car back is if you fail to make payments on your
car loan
Worst case scenario: The terms of a loan may change or be canceled if a lender goes into insolvency or is taken over by another bank. You may need to refinance your car if the new loan terms no longer align with your financing needs.
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Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.

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