The “Financing Fell Through” Scam

When it comes to consumer fraud in the auto industry, nothing is more corrupt than a bait and switch technique DealSure calls the post-delivery “Financing Fell Through” Scam.

It’s a trick that unethical car dealers use to increase your down payment and/or jack up the interest rate on your car loan after you drive it off the lot – and this is how it works.

You’re in the market for a brand new car and you’ve done your homework. You’ve saved up money for the down payment… worked on improving your credit score to get the lowest interest rate possible on your new car loan… and shopped around for the car and options you want at a price you can afford.

After you begin talking to the car dealer, the salesman tells you he will know more about your options if he can check your credit score.  The dealer returns with great news – you’ve qualified for a low interest rate on your new car loan.  You ink the deal, drive off the lot and race home to show your new car that you got at a great price to family members and friends.

A week or two later, you get a call from the dealer.  Sandwiched in between expressions of regret and sympathy, the dealer tells you that the “finance department” rejected your loan application because your credit score was too low to qualify for the low low APR you thought you had.

They’ve sprung the trap. The contract you signed includes a phrase in the fine print saying your deal – the deal you though you had – was "subject to loan approval.". In other words, you took delivery of your car even though the sales contract you signed wasn’t final. The salesman says you need to return to the dealership and resign the paperwork.

That’s not all.

The dealer could also tell you that you need to increase your down payment by thousands of dollars and that your monthly payments will go up because your interest rate is no longer 4% or 5% but 15% or more.

Understand that the dealer knows your credit score before bargaining begins. Checking your credit is the first thing a dealer does. Why would they go through the trouble of selling you a car if they know you can’t buy it?

Make no mistake. If you have marginal credit, crooked dealers see you as a prime target. They know it is likely that you’ve been refused financing before… that you have few car buying options… that you’ve been driving around in your new car for weeks… and that you will pay whatever the dealer demands to keep it.


A word of warning to car buyers. Don’t fall victim to the “The Financing Fell Through” Scam.
Make sure your deal is final with DealSure.