If my auto loan fell through and I no longer want the car, can the dealership make me sign another contract with another bank?

UPDATED: Dec 1, 2011

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If my auto loan fell through and I no longer want the car, can the dealership make me sign another contract with another bank?

Asked on December 1, 2011 under General Practice, Pennsylvania


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

What you need to do depends on--

1) Have you already signed a contract of sale? If you have not, then you probably are not obligated to go through with the transaction; but if you have, then you have to check whether--

2) The contract of sale was contingent or noncontingent. If it was contingent, then as with a home sale contract with a financing contingency, the failure to obtain financing should let you out of the transaction. But if the contract was not contingent on the financing, then you are obligated to purchase the car.

If the contract states you have to try to get financing with another bank, you'd certainly need to try. But even if it doesn't say that, if you are obligated to purchase the car, you need to find the money for the purchase somehow, or else you will be in breach and the dealeship can sue you for what you owe under the contract. If obligated to purchase, you may wish to apply for a loan with another bank.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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