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  1. #1
    Join Date
    Apr 2019
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    1

    Default Dealership Wants the Buyer to Apply for a Different Loan After a Spot Delivery

    My question involves a consumer law issue in the State of: Ohio

    On March 14th, my husband purchased a 2016 Jeep Liberty at a major well-known dealership in Cincinnati. It had been years since he had purchased a car, and after being walked all over the 'Auto Mall' looking at cars for 4 hrs, quite frankly he was exhausted when they sat down to sign the paperwork. He's 75 years old, so he was anxious to get the paperwork done and get out of there. He was told that he was approved for 2 different cars, and just to take his pick.

    18 days later, he receives an email message that the dealership was unable to sell his loan off, and to bring the car back. We then pulled out the paperwork and find that there was a 14 day Spot Delivery clause in the agreement.

    He calls the dealership and is told not to worry, they don't want the car back, that was just a 'form' email, and they just need bank statements, and all will be fine.

    On April 14th, we still had not received a payment book from anyone, so he called the dealership and they said the loan was approved, but the paperwork wasn't done yet, and the bank said to just make the payment to the dealership. They wanted the payment via debit card over the phone. My husband made the payment and then they called a few days ago and said that they had a BETTER loan for us, that would save $25 per month, and so they were going to refund the payment we made, and we would not actually have a payment due for another 30 days, as they had a new lender for us.

    THEN....they said we had to sign a NEW contract with them. Hubby said fine, as long as that was not going to start a new Spot Delivery period again - and they said it would but after all - we would save $25 per month!! So, we asked to speak with the bank that had approved the loan. Surprisingly they gave us a number to call, but the person that we were told to speak with told us that the loan was NOT approved yet, and in fact she has asked for a more recent proof on income on my husband's business (he is self-employed in addition to social security).

    We then provided them with what the loan person stated she needed, but that the dealer had never asked us for...and within minutes, the dealer called again and said the loan was now approved. We asked for it in writing, they said they could not do that, and if we did not sign a new contract with a new Spot Delivery 14 day period, they were
    going to take the car back. This all happened late Friday afternoon, so I could not call anyone for legal advice.

    Everything I have read says that since the dealer signed the TIL as the Seller-Creditor, and the 14 day window is LONG past - they cannot cancel the contract.

    But - they actually want to come to our home Monday to have us sign a new contract!! BTW - hubby's credit is not bad, it's just limited as we don't use credit much at our age!

    Hoping someone here has some insight!!

    Thanks!

  2. #2
    Join Date
    Sep 2005
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    Behind a Desk
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    98,846

    Default Re: Dealership Wants the Buyer to Apply for a Different Loan After a Spot Delivery

    If I am interpreting your question correctly, your husband applied for financing at the dealership when buying a car and, after the deadline for rescission, the dealership told your husband that the financing had failed. They gave your husband the option of applying for a new loan with better terms, but your husband declined. Now they want him to sign a contract obligating himself to make payments to the car dealership as outlined in the original (failed) financing agreement.

    If that's the case, then it sounds like what they're trying to do is get out of financing the vehicle themselves. If your husband finances through a third party, they escape that obligation. If your husband signs a formal contract with them, they can sell the loan and get out of the obligation.

    If it were me and I truly could save $30/month on the payment, I would apply for the new loan -- although you have to be careful not to give the dealership any new rights if the attempt to secure that loan is unsuccesful. But if I were happy with the current payment, and with making payments to the dealership, I would not feel obligated to sign any new documents. But no matter what happens, the car payments must be made.

  3. #3
    Join Date
    Nov 2015
    Location
    47.606 N 122.332 W in body, still at 90 S in my mind.
    Posts
    1,389

    Default Re: Dealership Wants the Buyer to Apply for a Different Loan After a Spot Delivery

    According to the FTC spot deliveries are illegal but, without seeing the contract we cannot determine whether or not that's what happened here. See

    https://www.ftc.gov/sites/default/fi...0043-80228.pdf

    None the less, from your description the recession period was closed so I'd tell the dealership to step off, that they're obligated to the original terms...which you may well be stuck with.
    "Where do those stairs go?"
    "They go up!"

  4. #4
    Join Date
    Sep 2005
    Location
    Behind a Desk
    Posts
    98,846

    Default Re: Dealership Wants the Buyer to Apply for a Different Loan After a Spot Delivery

    It's the yo-yo element that is unlawful, not the dealership's allowing people to apply for credit at the time of the sale.

    Here, the consumer appears to want to keep the car. The dealership appears to have missed the deadline to rescind the transaction, such that it is now in the shoes of the lender under the same terms as the loan contract that failed. To keep the car, the buyer needs to make payments as agreed; but if the buyer can in fact save $30 per month through a different lender (and qualifies for the loan) that's worth considering.

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