What happens if I get into an accident in a car and then my financing gets declined?

I'm buying a car from a dealership with a trade-in and a down payment. I have negative equity on the trade-in, so I'm actually $6,000 upside-down on the loan after my down payment. I got into an accident a few days after driving the car off the lot and my insurance is paying for repairs. However, my financing has been denied. The dealer wants me to come back in and do some more paperwork to find a new lender. What happens now?

Answer
“This is a very complicated situation for both sides. However, you may have a bit of an upper hand because there’s no way that a dealer wants a car that’s been in an accident.
Your options are one of these:
  • Go back to the dealer and fill out the paperwork for a new loan/lender. Hopefully, you don’t get denied.
  • See if you can get your old car back, as the dealer may legally have to take the new vehicle back and give you the old one.
  • Consult a lawyer to see what your best move is.
Getting a lawyer might be the best option, especially if the dealer wants to move you to an exorbitant interest rate or refuses to honor your trade-in. But the dealer may also want to work with you because they know they’re in hot water as well.
See what they have to say, and if you have questions or concerns, don’t hesitate to contact an attorney.”
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Eric Schad
Answered on Jul 30, 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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