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Can my car loan be denied after I'm approved for it?
I applied for a car loan through the dealer, signed the paperwork, and drove off in my new ride. A few days later, the dealer calls me and says my loan has been canceled. Can they do this?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Sorry to hear about the issue with your
car loan
. However, this is a fairly common occurrence called a spot delivery. In this case, the car dealership doesn’t do in-house financing. Instead, they act as an intermediary between you and the lender. What happens during a spot delivery is:
- The dealer anticipates that you’ll be approved for a loan, and there won’t be an issue.
- You sign the paperwork, and the dealer gives you the keys before you’re actually approved by a lender.
- The dealer can’t find anyone to take on your loan, so you have to bring back the car.
- When you return to the dealer, they may have a new loan agreement for you to sign. If they don’t, you likely don’t have the credit score or income to get a car loan.
If you sign a new loan contract, you will still need full coverage car insurance to drive the car off the lot. You can either use the policy you had on the first car, or you can shop around on the
Jerry
app for a new policy. Sign up with Jerry, and you can compare rates in just minutes to find the best policy for your car insurance requirements.View full answer
- Gregory R.
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