Can a dealership cancel an auto loan after letting me drive off with a Toyota Highlander?

"A dealership said I could finance a new Toyota Highlander with a trade-in and $1,000 down. Then I got a call that said the lender can't do the deal unless I put $2,000 down. I didn't want to negotiate, so I let the problem go.

A month later, I get a letter saying my financing is canceled. Can an auto dealership do this?"

“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.”
Eric Schad
Answered on May 21, 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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