Can a dealer use a different lender than the one that I wanted to use?

I went to a dealer to purchase a car. They said they worked with the credit union I currently bank with, so I didn't see any harm in letting them go through with the paperwork. I just got a letter in the mail from a different lender about my loan. My credit union said that the loan was pending approval of the car purchase. Can a car dealer use a different lender than the one we had verbally agreed upon?

“Unfortunately, if you didn’t have it in writing, the dealership can go through their network of lenders and choose one on your behalf.
Usually, the interest rate is the same, but they can get a kickback for providing the loan. You’ll want to look over your paperwork to confirm whether you agreed in writing to use your credit union or not.
If it wasn’t in writing, you can go back to your credit union and use them to refinance the car loan through the other lender.
You can take the money from the credit union and immediately pay off the other loan. It’s an extra step, but you’ll have the lender you want without having to deal with the dealership that somewhat bamboozled you in the first place.
Don’t forget that when you buy a new vehicle, you will need proper coverage. If you haven’t already found insurance, use the free Jerry app to help you find the best deal. Jerry compares rates from the top 50 companies in under a minute, delivering the best deals to your phone.”
Eric Schad
Answered on Aug 02, 2021
Eric Schad has been a freelance writer for nearly a decade, as well as an SEO specialist and editor for the past five years. Before getting behind the keyboard, he worked in the finance and music industries (the perfect combo). With a wide array of professional and personal experiences, he’s developed a knack for tone and branding across many different verticals. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.

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