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bought a car, took it home, but now unable to verify income

Discussion in 'Newbie Forum' started by simpletechmedia, Aug 1, 2013.

  1. simpletechmedia

    simpletechmedia New Member

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    i am in a weird situation. i am out in Los Angeles and bought a used car a week ago as my previous lease on my existing car was expiring in 2 months (they paid it off the 2 months). i put in $1k down for the used car.

    although my credit is pretty bad, everything checked out great as dealer gave me the keys to drive it home. i thought i was all clear of the danger and i have a new car so i was happy.

    but a few days later, the auto finance company (Capital One) calls me and says that they can't verify my income. i have a bit of strange income as my income is not something i can verify easily so it poses an issue to them i suppose. no complaint there.

    now i'm not sure what to do, bank is telling me that dealership should give me a call and maybe tell me to return the car or find another bank. that is all good and dandy but.

    what i am MOST worried is, if the dealership says to return the car, take my $1k deposit, and tell me to get lost.

    is this something that can happen? what are my rights in this situation?
     
  2. JMD

    JMD 2012 Prius 4 Solar Roof

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    Don't know.
     
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  3. bisco

    bisco cookie crumbler

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    them's that got's the gold makes the rules.;)
     
  4. emsee

    emsee New Member

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    The rules, from what I've read are that if you take the car back, you get your deposit back. Dealers use a tactic to trick people with bad credit into loans with higher interest rates. It's referred to as "yo-yo financing", I tried to link an article, but I'm too new here to do that.
     
  5. rdgrimes

    rdgrimes Senior Member

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    It would be up to the dealer to find financing for you. $1K down on a used car isn't enough to really make any lender feel "protected" on the note. I'll assume the car is worth about what the dealer charged you, meaning that if you default, the lender loses money. If you could scare up $5K, the odds of getting decent financing go up considerably. Even a new car can usually be had with $5K.

    Your rights are no doubt carefully spelled out in the loan application and terms, and as long as they don't violate any laws you are bound by them. The dealer's at fault for letting you take the car, and taking your money, without locking in the financing. But this probably doesn't violate any laws - its just sloppy. What happens next depends on how honest they really are. Buyer beware: Getting a used car for $1K down is too good to be true unless its priced at wholesale.
     
  6. simpletechmedia

    simpletechmedia New Member

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    thanks but i'm still a bit confused. can someone just give me a straight answer? will i be charged anything when i go to return the car?
     
  7. ItsNotAboutTheMoney

    ItsNotAboutTheMoney EditProfOptInfoCustomUser Title

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    To answer questions about your legal rights people need to know in what state you purchased the car and where you live.
     
  8. emsee

    emsee New Member

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  9. simpletechmedia

    simpletechmedia New Member

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    emsee, i saw that, but it only explains "Contract Cancellation Option Agreement." which is valid only for 2 days from purchase. or am i still eligible for that? despite i am about a week in?
     
  10. fuzzy1

    fuzzy1 Senior Member

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    The 2 day cancellation option (which applies only if it is included in the original agreement) applies only if you want to return it. It doesn't cover the case where the lender refuses to finance the deal.

    In my state, the seller would be in the biggest pickle right now. If they demanded the car back, they would have to return your entire deposit. But your state's laws will be different.
     
  11. SageBrush

    SageBrush Senior Member

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    I doubt OP runs any risk of losing the deposit, but he can always demand his deposit before he hands over the keys. More interesting is the lease car he turned in. If the dealer has already turned in that car and paid the two outstanding months then OP should refuse to refund the two months since they took the car.

    On the off-chance this is a bait and switch, all the cards belong to OP. He might be able to suggest that the dealer add money to the down payment to convince the lender to approve the remaining loan. After all, the dealer is *already* down two car payments.

    In similar cases I have heard of, the person eventually receives a letter from the dealer demanding that the car be returned. Until then, OP gets free use of the car. He might want to car shop a bit, just in case he cannot reach a meeting of the minds with his current dealership.
     
  12. Blu-ray

    Blu-ray Blizzard Brigade #215

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    I use to work in the collections department at Capital One Auto Finance. Do NOT be late on a payment on the car. I had a lady who ended up with a 3,000.00+ end of loan balloon payment because she was late regularly. The added interest and late fees came due at the end of the loan. She thought she had made her last payment on the car and just couldn't understand why she had the late fees and added interest.

    If you are late make sure you pay the late fee and any extra interest accrued.
     
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  13. -1-

    -1- Don

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    :confused:None of my business, but since your brought it up. How do you report your income when you file your state and federal tax return? I don't need an answer but anyone securing a loan requires validation. I had the same issue (validating income) with a employee purchasing a used vehicle. He had a ironclad W-2. Your dealer is at fault, and I doubt they're new to financing procedures.
     
  14. jhinsc

    jhinsc Senior Member

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    I think there is likely more to this story. The OP didn't lease another new vehicle, but bought a used one instead. Motive could be to stop wasting money on vehicles and get off the lease train that never ends. But it could also indicate financial ability or inability to qualify for anything else. If that is the case, then financing should have been sought up front before car shopping. Income/employment verification is at the heart of the loan approval process with documentation of W2's, tax returns and bank account statements if self employed, and verification with employers that you actually work there. The OP admitted to bad credit. The dealer is sort-of in the hot seat on this one, but unfortunately at the OP's expense.

    Go back to the dealer - they likely know about the situation and they're trying to find another lender. The more you put it off, the less likely you can "un-do" the deal. Don't let too much time go by because you don't want them to sell your old car or worse, ship it off to auction. If you can get it back, you at least have another couple months in the car to figure it all out. Worst case scenario is you take the car back, pay for the mileage you put on the car, you get the $1000 deposit back, and if you old car's lease was paid off, you owe them for that if you can get it back. If not, you're without a car.
     
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  15. MPGnutcase

    MPGnutcase Active Member

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    Yes I agree with jhinsc address it NOW, and see what the dealer will do for you
     
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  16. SageBrush

    SageBrush Senior Member

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    I don't see how the lease can be paid off and the car not returned to the leasing company.

    As for when to go back to the dealership, I say only after the dealership demands the car back. The longer that is, the more the dealer will want to find a compromise. While OP should be careful to be legal, he does not have to help the dealership. When he does return hte car he should have a (preferably big) friend come along in a separate car. Give back the keys only after the details of the entire deal are worked out: Down payment, status of lease car. Get those details in writing, signed by at least the manager. Then return the keys.

    The dealership is nullifying the contract, not OP. If they incurred costs along hte way I don't see why OP has to pay them. Just my opinion -- I am not a lawyer.
     
  17. jhinsc

    jhinsc Senior Member

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    The onus is always on the buyer, who bears full responsibility on whether the vehicle can be financed. Read an auto sales contract in any state, especially the fine print - there are no rights a dealer will assign over to the buyer before a transaction is complete. If the OP has an accident or the vehicle is stolen, or worse there is a mechanical problem not covered by any warranty, total responsibility is on the OP. What if the dealer finally secures financing at a super high interest rate, because that was the only option available, and the OP objects? By then it might be too late to do anything but accept their terms or have no ride at all. The longer the delay in resolving this situation, the more painful the financial cost could ultimately be.
     
  18. fuzzy1

    fuzzy1 Senior Member

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    As long as the 'have no ride at all' option includes fully unwinding the deal and returning all the buyer's money (and tradein, if applicable), I'm not seeing a problem with this.
     
  19. SageBrush

    SageBrush Senior Member

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    We'll both no doubt agree that without the contract in front of us this is just speculation ...

    And it has been many years since I have have had any kind of auto finance contract to review, butI doubt they have become any more consumer friendly ;)
    All that said, IIRC the general construct is for the buyer to agree to an APR and term, and also agree that if financing cannot be completed within the terms outlined then the contract is nullified. In effect the dealership is offering a 'pre-qual,' but ultimate authority to accept the loan terms rests with the lender.

    Now, the buyer has responsibility to return the car if the financing falls through; and if an accident occurred in the meantime the buyer is responsible. The buyer is NOT responsible for normal wear and tear, miles, or charges incurred by the dealership or lender beyond what the buyer has already agreed to pay in the normal course of a successfully concluded contract.
     
  20. jhinsc

    jhinsc Senior Member

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    Why do people think the buyer has priority over the dealer to be made whole? Being treated fairly does not mean being made whole.