How Long Does A Car Dealership Have To Get You Financed

The truth is that it can take a dealership anywhere from a few minutes to a few weeks to get a car loan approved.

That being said:

There does seem to be some conflicting information out there, and further review suggests that, as usual, different states have different rules/laws.

Relevant Articles to Read:

• What is a Doc Fee When Buying a Car
• Reasons to Sue a Car Dealership
• What Kind of Lawyer Do You Need to Sue a Car Dealership

One article we found high in Google suggested there was a rule/law (The 10-Day Rule) that forced dealerships to either approve or deny financing to car buyers within ten days upon written notice. 

This appears to be a California Rule, as this video confirms.

Advice for dealership financing rules

When it comes to car sales and purchases, it’s easy to search the internet and even easier to forget that some of the advice, as good as it can be, may be completely irrelevant in your particular state or municipality. 

To truly find out how long a dealership has to finance your car loan, you should refer to your state DMV

What is a spot delivery?

It’s referred to as the YO-YO scam, Spot Delivery, or Spot Financing, and essentially, it works by getting car buyers to take a car without financing in place.  The idea is that you fall for the car, show your friends, and get comfy, then the dealer calls and says they need more money because the loan didn’t get approved.

Spot delivery isn’t always a scam

When do most people shop for cars?  Nights and weekends, right?  When are most banks and lending institutions closed?  

Nights and Weekends

Enter the spot delivery!  We want to drive the car away and the dealer wants to complete the sale.  Most of the time, there is absolutely no harm or foul in this type of transaction, 

However,

where things get tricky is when a dealer decides to do this with someone who has what you might consider, “Questionable Credit”.  The deal comes back without the possibility of funding as it is currently written and here we go… 

The laws governing spot deliveries

Again, when it comes to your legal protection against Spot Deliveries and Spot Financing, you must check with the laws of the state in which you live,

Because they are/can be different!

There are certain states that will require the dealership to honor the financing at the rates in their contract, and if they can’t, they must return everything (Trade-ins and Deposits).  On the flip side, there are states that permit the dealership time and flexibility in getting any loan approved whether it be what was promised or not.  

Know the rules of the game before you play!

Avoiding “Yo-Yo” Scams

If you have prime or great credit, you really don’t have too much to worry about when it comes to spot deliveries or financing. 

However, if you have subprime (Below a credit score of about 680) or bad credit these situations can affect you negatively whether the dealership means you harm or not.  So, 

Your Best Bet:

Is to pre-arrange your own financing outside of the dealership.  This way not only do you have guaranteed funding before you start shopping, but if for whatever reason (Such as incentives) you decide to use dealer financing, you know that a lender has already signed off on your ability to pay. 

This doesn’t mean that every bank will agree, but it increases the chances greatly that one of the dealership’s many lenders will be able to fund you enough that you probably could take a Spot Delivery and feel more confident about the outcome.

I still wouldn’t personally advise you to do so without excellent credit, but I realized a while back that when push comes to shove, people will make rash decisions while buying a car and that I should simply do my best to prepare you for that possibility better.