“In short: yes, they can cancel your car loan. The dealer works as an intermediary between you and the lender. While they can give you the car before the final loan approval (called a spot delivery), that doesn’t always mean you’re financed.
If the lender says your down payment wasn’t enough, the loan can be canceled as long as you’re notified within 10 days of the purchase date.
Because they already canceled your loan, you’ll have to reapply. Chances are you’re going to have to hand over the additional $1,000 for the down payment. But, in the grand scheme of things, that’s not a ton of money to pay to solve your problem.
In the future, you should try to find pre-approval, or go to the lender yourself, rather than going through the dealership. Not only will you get a yes/no answer, but you might also save some money on the rate.”