Delay with Car Dealer Finance Approval

Lbruno101010 on 02/12/2019 - 21:16
Last edited 03/12/2019 - 10:29 by 1 other user

Hi guys,
I'm facing a really annoying situation and would love to have your thoughts on this.

One week ago, on 25/11/2019 I went to a car dealer, did a test drive etc and decided to buy the car. They had a pretty good finance option which I was happy to get. I provided them with every documentation they asked straight away, including access to my bank account (they asked me to log in to my bank account and they printed a lot of statements). This was because (according to them) I work as a contractor and the company that I do contract for renews it every 3 months, and they are renewing my contract for more than a year now). I have money to buy the car if I want to, but the plan is good enough to make me want it and keep my money. I believe it doesn't matter if I have money or not, this is up to me to decide what I want to do with it, but well, they know I have enough money to buy the car. On Tuesday I called them to check the status and the finance laid said she believed it wouldn't work because I was a contractor, and I would need to pay at least 50% deposit, which I said no because I wanted to stick with the initial plan presented to me. Then she asked me more details on my work arrangements and she requested that I get a letter from the company saying that my contract was "on going". I called my company and they said they cannot give me such letter, which I told her through email and she never replied back.

Ok, good… So, I never heard any update from them so far, I emailed them asking for updates and never got a response and when I tried calling, they were always busy. So I decided to go there in person last saturday. The lady that works in the finance wasn't very happy to see me and before I had the chance to say anything, she said: I don't have any updates for you. But I insisted that it has been a while and I was concerned because I had a signed document saying that I was going to buy the car and that I paid $1000 as a deposit, then she said I should not worry at all because she would refund me my deposit and cancel the contract if they're unable to get me the loan.

Today, 10 min ago I decided to apply for a credit report from Equifax and I could see that there is NO query at all from any bank recently, the last one was about 1 month ago from my credit card and nothing after it. So I think this is an evidence that the dealer never sent my documentation to the bank and for some reason they don't want to do it.

I DO want the car, but it seems like they are trying to force me to pay 50% deposit, which I won't. I prefer to go somewhere else and buy a cheaper car instead.

My question is, I would be stupid to go somewhere else and buy another car now because I don't have any official response from them, so what if I buy another car and the day after they call me saying it's approved? From what I found on google, I would need to pay 10% of the car, correct?

But again, as I said, I want the car! However, if for whatever reason they don't want to sell me the car, it should come from them because any attempt from my side to give up may give them an opportunity to sue me and make me pay those 10%.

So what are my rights on this? I just want to get it cancelled and buy another car instead, it's been 1 week now since I signed the contract but heard officially nothing. From my equifax report, there is no query from anyone. I want to end this asap and move on, but I don't want to give them a chance to do nothing against me.

I would really appreciate any help! I moved from overseas 4 years ago and I know almost nothing about consumer rights in Australia.

Thank you all for any help!

Automotive

Comments

  • Muzeeb on 02/12/2019 - 21:22
    +3

    Dealer Laying about Loan Application

    Probably more comfortable than a bed of nails

  • SmiTTy on 02/12/2019 - 21:24

    Doesn't sound like the finance is worth the hassle. Why don't u just buy the car outright and tell them to cancel the finance application

    … Or if the finance path still appeals to you, find another finance provider? I guess the risk is 2 credit checks… (or maybe if you find out which finance company they use, you can approach them directly or another one of their brokers )

    • bruno101010 on 02/12/2019 - 21:38

      given that they didn't even apply with the bank, it would be just 1 credit check, however my main problem is that they might tell me that I was the one to give up and want me to pay those 10%…

      • Master Bates on 02/12/2019 - 21:53

        There are 3 credit checking agencies Equifax, Experian and Illion. Have you checked them all?

        See here to check you credit score for free.

        • bruno101010 on 02/12/2019 - 21:58

          I didn't know that… I know Equifax only, that's the only place I checked. I will check those others. Thanks!

        • bruno101010 on 02/12/2019 - 22:03

          credit score is 789, shouldn't be a problem.

      • SmiTTy on 02/12/2019 - 21:54
        +1

        Unless after you submit an application elsewhere, they then submit your application thus 2 credit checks (is what I meant)

        I would put it in formal writing that you will give them x days to finalise the finance, and if they don't respond by then then you will deemed as a failed application and you will be cancelling the purchase and expect a full refund.

        • bruno101010 on 02/12/2019 - 21:57

          ah ok, sorry. Do you think that would help me in a possible court dispute? thanks!

          • SmiTTy on 02/12/2019 - 22:01

            @bruno101010: Hmm sorry, I can't say I'm really qualified to answer from a legal perspective, but in my non legal opinion, I would think the courts would look favourable upon you for doing that because it shows you've attempted to resolve the issue with them and formally given them a reasonable amount of time by written notice.

            If they don't even respond to your letter… Its unreasonable to keep you hanging and holding onto your deposit

          • brad1-8tsi on 03/12/2019 - 11:25

            @bruno101010:

            Do you think that would help me in a possible court dispute?

            I doubt there'd be a court dispute. You agreed to purchase on the grounds that they organise finance at a specific rate for a specific amount. If they can't do it then they are in breach.

            I had similar with a Ford that I negotiated a terrific deal deal on. After a month there was no car and they couldn't indicate when the car would arrive or if one existed in Australia. It was the superceded model so they couldn't build one. They wouldn't / couldn't offer an alternate colour so i requested they cancel the contract and refund my deposit. They were happy to do so.

            • bruno101010 on 03/12/2019 - 11:49

              @brad1-8tsi: A month! That's correct, I agreed to purchase and I'm happy to do it, however they seem to be not happy doing it. I'll probably wait a till next week and try to do it, I'm just worried that they may say that I was the one who has given up etc etc… I think I just need to be careful with the say I say it.

              • brad1-8tsi on 03/12/2019 - 11:58

                @bruno101010: Nope. Do it now.

                Ring them and discuss the issue and then follow up with an email summarising what they are doing, who is doing it and when they will complete the action (14 calendar days is a reasonable period). Tell them you want an update of progress at 7 days. Copy in the salesman, the BM and the dealer principal.

  • crashloaded on 02/12/2019 - 21:30

    Ask for your deposit back if the contract was subject to finance and go somewhere else.

    • bruno101010 on 02/12/2019 - 21:39

      that's the issue, now I want to cancel it, but I'm afraid they will come after me saying I gave up the purchase and ask me to pay those 10%

      • crashloaded on 03/12/2019 - 07:33
        +2

        Depends what the contract says.

  • Tee Rex Arms on 02/12/2019 - 21:59
    -4

    Can we not put some kind of block on new users posting for a certain amount of time or something

  • djkelly69 on 02/12/2019 - 22:08
    +6

    I have money to buy the car if I want to, but the plan is good enough to make me want it and keep my money.

    There is basically no finance deal good enough to warrant taking out an unnecessary loan, particularly with current (savings account) interest rates. Just hunt around for the best deal you can get as a cash buyer and you will be much better off in the long run.

  • garetz on 02/12/2019 - 22:13
    +7

    "they asked me to log in to my bank account and they printed a lot of statements"

    why would you allow this ? As soon as they requested something like this, i would of said no and gone elsewhere.

    Your finances are personal and none of their business, you just need to prove your income through payslips or however you prove your income like an accountant statement, anything else is a breach of your privacy.

    • bruno101010 on 02/12/2019 - 22:18
      -1

      I asked if that was common, they said yes and gave me a paper saying they would not share my data with anyone etc etc…

      • garetz on 02/12/2019 - 22:28
        +3

        So they said yes, and you instantly believe them ?

        Just because they wont share your data with anyone, doesnt mean they shouldnt have that data in the first place.

        Question their motives before agreeing to do something.

        I know we are in the internet age, and people post everything about themselves on social platforms, but have some care for your personal information.

        • bruno101010 on 02/12/2019 - 22:33

          yes I did… I feel stupid now, first time doing this. Thanks for the advice.

          • brad1-8tsi on 03/12/2019 - 11:27

            @bruno101010: Why do people always ask for advice after the event? Don't you have some smart buddies to talk to?

    • carbunkle on 02/12/2019 - 22:35

      Excellent point, I would be concerned about key loggers etc on their computer (sounds like you logged in on their PC to print?)

      • bruno101010 on 02/12/2019 - 22:37
        +2

        yes I did. I changed my password right after it tho.

        • Nereosis on 03/12/2019 - 13:45

          Good job.
          I bought a car last week as a contractor also.

          I had to pay a 10% deposit because it was my first time borrowing money (don't have a CC) and they did a credit check through Equifax (which I am not a fan of).
          Changed my password prior to the check and changed it to something new after.

    • MarsTitan on 03/12/2019 - 00:58
      +1

      It is increasingly becoming a normal practice by banks. Even some banks have automated this, where you log into your bank for verification (of payslip etc.) from another bank's portal. They can also use this information to verify your living expenses. It is astonishing how much automation is done in this space.

      People are going to blame this on royal commission, but it has been happening for a long time (used to happen overseas several years ago). It is just banks after more verifiable data to make sure they are investing wisely..

  • JIMB0 on 02/12/2019 - 22:38
    -3

    tldr

  • carbunkle on 02/12/2019 - 22:41

    To be honest, it sounds like the crux of the issue is, what is a reasonable time to wait for a response of the finance application outcome.

    One would be inclined to think, this cannot be an open ended time frame whereby you're deposit is locked in and you are further prevented from committing to the purchase of another vehicle.

    My thoughts are 1 - How long have you waited for an outcome so far? What are your options here to reasonably ask them for a time frame? Given you have no credit check in your equifax, that is a little concerning. The suggestion above to provide them a fixed date in writing is one approach, but really I would be asking to speak to their management, and politely but firmly explain that you want this to be a time bound activity.

    I would not cave and pay 50% deposit for the deal. I would stick to saying you're personal finances mean you want the finance approved, and if it's not approved you will have to take back your deposit.

    • bruno101010 on 02/12/2019 - 22:51

      yes sound like that's the best approach, it seems like there is nothing explicit about this, ie, dealer has X days to give a final answer if they're responsible for the loan application but I never found anything about this.

      it's been a week now, will be 8 days tomorrow. I will wait till the end of the week I think and go back there again saturday and ask for a solution, maybe ask to talk to their manager. Thanks!

  • spackbace on 02/12/2019 - 23:19
    +4

    Few things

    1. A contractor on 3 month contracts will be difficult to get set these days. Credit is difficult to obtain since the royal commission last year
    2. If it's a 2.9% (Toyota) or 1% (Nissan) no doubt you likely don't meet their criteria, and in order to get you financed they'd need to go through a secondary lender, which would mean a higher % rate than the promotional one.
    3. Getting bank statements is common. Normally you just email those to the BM though.
    4. Saturdays are their busiest day. Yes, you'll get the BM off-side by going in then because they're trying to write new contracts.
    5. Contract will state "subject to finance at 2.9%" or similar. If you can't get 2.9% you have an 'out'. Dealer is likely trying to best work out your application before submitting it though, as they'll know if you do/don't meet that lender's criteria.
    • bruno101010 on 02/12/2019 - 23:27

      Contract doesn't state the interest rate, just say something about subject to finance. Am I obligated to accept whatever they can get, for example 10% because the contract doesn't state it? Would I be able to decline it because it is not what I was "told"? There is nothing in writing regarding interest rate…

      I really don't care if I won't get the car anymore, I just want to get out of it and don't have anything to worry anymore, however I would be happier with the car.

      • spackbace on 03/12/2019 - 01:05

        The fact is, under current lending criteria you might struggle to get a loan at sub-10% rates because of the nature of your work.

        Imagine if you had to lend money to someone who only had employment for the next 3 months, with no guarantee of more work after that?

        And the fact you have the cash in the bank doesn't mean that much to the lender. You could get the loan, then blow that cash the next day, leaving you struggling to make repayments in 3 months after your contract ended.

        Just buy a car with cash at a price you can afford. Don't stretch the budget on new and shiny things and blow all your savings.

        They'll let you out of the contract without issue since they can't obtain finance. Don't worry about it.

      • Typical16-bitEnjoyer on 03/12/2019 - 08:51

        Contract doesn't state the interest rate

        That was a mistake. Make sure it's specified on contracts in future.

        • gth on 03/12/2019 - 10:35
          +1

          Interest rate missing from the purchase documentation is… surprising. You still need to sign the loan paperwork (if it ever gets approved), right? If so, anything more than the rate they promised on the day you first agreed should be grounds to walk away with a refund (as per @Spackbace above).

          • Typical16-bitEnjoyer on 03/12/2019 - 14:46

            @gth: It's a common tactic. They write "subject to finance". You don't get approved from their "dealer" finance but a 3rd party will approve finance - at a far worse rate. They argue it was subject to "any" finance, not just "their" finance.

            Best to specify the finance offer and avoid any issues or arguments.

  • Rumbaar on 03/12/2019 - 00:01
    +1

    Car sales are slow, go somewhere else where you business is wanted.

  • bobbified on 03/12/2019 - 00:28
    +1

    If your story is accurate, Im surprised the dealer is willing to let go of pretty much a "done deal" and simply refund your deposit. Unless they really can't get you a loan and they're out of options, then what do you expect them to do?

    If you still really want the car, then you should negotiate on the terms. Playing hardball and whinging here is not going to get you anywhere. Otherwise, take the deposit they have offered to refund you and go elsewhere.

  • mick1 on 03/12/2019 - 08:10

    You can blame Australia's dysfunctional government bodies for the situation.
    One arm of government trying to stimulate the economy (reserve bank lowering rates) and another arm of government - Australian Prudential Regulation Authority (APRA) - trying to restrict lending as hard as they can.
    Currently all banks and bank associated lenders are running scared of APRA, and have tightened up lending to such a ridiculous degree that people with great credit history, good regular incomes and plenty of assets are being denied loans.
    People who previously would have had no problems getting a loan are - if they really want to go ahead - being forced to pay big fees to lower level lending brokers.

  • BigBirdy on 03/12/2019 - 08:19
    +1

    Don’t commit to a purchase elsewhere until you get your $1000 deposit back (you may find your original application gets approved and you’re expected to go ahead with the purchase or sacrifice your deposit)

  • Typical16-bitEnjoyer on 03/12/2019 - 08:50

    Give them an ultimatum. Finance approved by date otherwise deposit refunded. Don't buy elsewhere until your deposit is returned. Simple.

  • MITM on 03/12/2019 - 09:00

    If I had read this post yesterday - I would have suggested cancelling the contract within the 7 days cooling off period (Qld AFAIK). Some car dealers sweat during this period and is why you don't hear from them or there are delays.
    So now you have your baseline price for the car you want, find the same or better at another dealer (I'm sure they'll match it) then go back to the first dealer and give them 24hrs to complete the sale or you're walking - though the contract may say they have more time to finalise the deal.
    I can't see why the dealer wouldn't want to sell you the car and pull the finger out !

    • spackbace on 03/12/2019 - 10:06

      I can't see why the dealer wouldn't want to sell you the car and pull the finger out !

      Because they can't get finance approval…? 3 month contractor = unfinancable

  • OzHunterNSW on 03/12/2019 - 12:22

    Usually "Wheeler and" is placed b4 Dealer…

    What exactly is the issue… you gave deposit, they can't finance… get deposit back.

    Go to another wheeler and dealer

  • TimSubaru on 03/12/2019 - 18:32

    Buno, work in the car biz. Do not buy another car. Tell them it been taking too long and you can provide 50% deposit and request deposit back. Get them to write back or go in and get the paperwork to get the deposit and purchase order cancelled..

    They may have looked at your capacity / employment as contractor and the lender say need 50% deposit. etc, They may not have done a credit check as I think your capacity would have failed and that is a calculation not a credit check.

    Good luck but it obvious the Finance lady knows it a no go and is hoping the sun, moon and all the planets align.

    Good Luck

    • spackbace on 03/12/2019 - 18:51

      Tell them it been taking too long and you can provide 50%

      can't ;)

      Good luck but it obvious the Finance lady knows it a no go and is hoping the sun, moon and all the planets align.

      She might be running it past outside brokers/3rd-party lenders, but yes it seems like she's stringing OP along a bit

  • HeWhoKnows on 03/12/2019 - 19:52

    Some tips for OP

    Firstly: Keep the story short.
    One paragraph would have summised your situation nicely
    We dont need to know every call and word uttered and every document sighted.
    This is not a court case.
    It just wastes time for everyone.
    So just cut straight to the bone next time.

    Secondly YOU ARE A CONTRACTOR ON A 3 MONTH CONTRACT. Thats all there is to it.
    Nobody can change your work situation and nobody will lend you money based on 3 months of guaranteed work. FACT!

    Thirdly Dealers make more money out of finance than selling you a car so they are not going to avoid approving the finance. It just cuts thier commission in half.

    So if you dont like the finance deal they have tried to work out for you then just PAY CASH!

    • bruno101010 on 03/12/2019 - 22:37

      Thanks for the tips, however my idea of giving a good context was to avoid for example, you not getting what I meant.

      Firstly: If you thought this was a waste of your time, you could have ignored it and moved on.
      Secondly: I don't care whether they will or not give me the money, my concern was all around what could happen given I have that signed contract from the dealer.
      Thirdly: Read the line above.

      Thanks

  • bruno101010 on 03/12/2019 - 22:44
    +6

    Hi everyone, just an update on this:

    Thanks for the really good advices I got here, I went to the dealer and managed to talk to their business manager which was very helpful and got the finance to call the bank straight away. Then I got a call from the bank to confirm a few details. I got a conditional approval by the end of the day and the condition was that I put a 10% deposit, which I was happy to accept, then they sent me all details like exact amount of deposit, interest rate, repayments etc, so I'm going to the dealer tomorrow morning to pay the deposit and sign all the paperwork.

    In the end everything worked well and everybody is happy.

    Thanks again for all your help!

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