Yo-Yo Purchase of Car

Question: I purchased a car and traded in my old car and put money down. I signed a contact and got the keys. Three weeks later I received a letter from the dealer stating that I was not approved and was asked to sign a new contract on different terms.

Answer: Confirm with the financing source that the application was not approved. If that is the case, and the original contract documents you signed made the sale contingent on the dealer being able to sell the paper, you have to return the car. You are entitled to your down payment and tradein back, without deduction. You are not obligated to sign a contract with different terms. You generally should not sign a new contract and instead go elsewhere, because there is a substantial danger that the real problem is that the dealer is trying to get you to sign an unnecessarily expensive contract.