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Can a car loan be rescinded if I already signed the contract and drove the vehicle off the lot?
I purchased a car from a dealer. At closing, they said my financing looked fine. I signed the papers and drove the car home. A week later, the dealership called and said that the lender had kicked back our loan. I already sold the car I had. What now?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
“In most states, a dealership has a 10-day period where they can cancel a purchase order. This cancellation can be for a variety of reasons, but most commonly, it’s because of the rejection of a financing application.
Since the lender denied your application and the dealer rescinded the purchase contract, you have to either bring the car back, collect your down payment (if any), and walk away, or you can try to find a different lender.
Keep in mind that if you got rejected on your first application, you’ll probably face a higher interest rate. But since you already sold the car you had, this still might be your best option.
If you find another lender, keep making payments on time. Then, refinance the vehicle when your credit score is higher.”
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- Gregory R.
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