How do I close my car loan after getting fired?
October 31, 2007 5:26 PM   Subscribe

I just bought a new car before getting fired two days later, and now I'm having trouble securing the loan. What do I do?

Two weeks ago I bought a new car. At the time I was employed (but under a bad boss, natch). Last Tuesday I got word that I was going to be fired that day and walked out. I received a perfunctory voicemail from my boss and my final check arrived two days later.

I have enough assets to be fine with the car loan payments for 3-4months, but the employment verification is hitting a snag. I didn't misrepresent myself at the time I signed the papers, but now there's a lot of back and forth with the dealership about this. Their last suggestion was to find a friend at my old job that would lie for the employment verification. I don't think I can get someone to lie like that and besides, wouldn't that be fraud?

So, I have assets and I'm looking for a job. I'm confident I'll be making at least as much as I did at the old place, but it hasn't happened yet. I also have a bunch of 401k money that I don't think I can leverage, but it may help in documenting. What are my options, and what is the responsibility of the dealership in this situation?
posted by rhizome to Work & Money (15 answers total) 1 user marked this as a favorite
Can you elaborate on what state the whole transaction is in right now? I'm a bit confused as to how you can have purchased the vehicle before securing the loan?
posted by TravellingDen at 5:49 PM on October 31, 2007

Response by poster: California. I had a job when the approval and paper signing happened. I didn't misrepresent myself and I was indeed employed at the time, I just happened to get fired two days later.
posted by rhizome at 5:54 PM on October 31, 2007

Something similar happened to us in the past. We returned the car, got our down payment back and waited until we had the funds and stability again to purchase a new car.

You could try and get a loan elsewhere but, really, I can't imagine you won't run in to the same problem. Your best bet is to try and get a co-signer. But, really, you may just have to return the car.
posted by amanda at 6:38 PM on October 31, 2007

My credit union only required proof of income via a recent pay stub, perhaps you can secure financing at a bank or CU that has slightly less rigid requirements.
posted by Asherah at 7:02 PM on October 31, 2007

Sounds like the dealership is pretty keen on you having the car, and them having the money. Ask them if they'll sit on it for a few weeks while you get a new job, then put the loan application through again with the fresh info.

If the dealership is giving you any problems, return the car and walk. How they treat you with this is a fair indication of how they'll treat you with warranty repairs, etc.
posted by aeschenkarnos at 7:04 PM on October 31, 2007

Response by poster: Thanks for the comments so far, all.

aeschenkarnos: That's along the lines of what a friend said, "Tell them to pound sand. It's their problem." Though I'm concerned that they haven't cashed my (substantial) down payment, they are indeed putting a lot of this on me. I just don't know where I stand when I'm in between being approved and Not Having To Worry About It.

Asherah: In the runup to getting this car I had entertained the idea of opening a CU account to get a loan, but wouldn't there be some time delay on their part in getting the loan in order?

I'm particularly worried about getting the car repoed or having people call me all the time, etc. I've heard possession is 9/10th's of the law, but I never seem to know where that 10% falls. :)

Also, and this may just be an artifact of the current credit crunch, but I'd think that if I could document assets and my ability to pay that that could be enough. Alternatively I'm trying to think of a way of being self-employed in a way that will pass muster.
posted by rhizome at 7:13 PM on October 31, 2007

Can you elaborate on what state the whole transaction is in right now?

I believe TravellingDan was using the word "state" the other way. Is the car currently in your possession?

It does sound a little odd that the loan isn't secured before you're allowed to drive the car off the lot.
posted by nadise at 8:11 PM on October 31, 2007

Response by poster: Yes, the car is in my possession. I've had it for two and a half weeks and it now has 800+ miles on it.

One correction/datapoint: I just went to the bank and the dealership did cash the downpayment.
posted by rhizome at 8:21 PM on October 31, 2007

If you didn't get the car loan through the dealership they're probably hoping that you will now. Car yards make a lot of money on car loans.

Frankly, your situation shouldn't be so uncommon that they've never met it before. Ask them what they did last time.
posted by krisjohn at 9:19 PM on October 31, 2007

I would really, really consider whether it's that important to you to have this car now, given the uncertainties. If you can't buy it with cash, and you're not employed, you're looking at some kind of jacked-up interest rates so that they can hopefully extract as much cash out of you as possible before they, as they expect, repo it.

Unless it's some sort of special order, and it doesn't sound like it, you're probably just as well shopping again in a few months when you're back on your feet.

I mean, really, if you're down to krisjohn's suggestion -- you're in a position where the car dealer has you balls over barrel. That is never a good position to be.

Even if you've already traded in your old vehicle or had none before, you're better off hitting the nearest five used car lots and driving away something that has the same equity after you hit the street.
posted by dhartung at 10:21 PM on October 31, 2007

Response by poster: That's the thing, I am on my feet! Heck, as far as my last check goes I've still got two weeks more of paid vacation in my pocket. I know these things are hard to justify to a bank, but that's really the crux of my question hence the idea of declaring myself self-employed.
posted by rhizome at 10:42 PM on October 31, 2007

It's still not clear to me what the status of the loan is. If the loan has already been approved and paid out based on the information supplied on the application, then there's really nothing that the dealership can do. If the loan is not yet approved then it probably won't be -- but then I'm confused why they let you drive the car away.
posted by winston at 5:58 AM on November 1, 2007

You could get a job at a burger joint and use that for the employment verification.
posted by delmoi at 7:30 AM on November 1, 2007

You need to talk to someone higher-up at the loan place. Don’t waste anymore time talking to your current contact. As mentioned above this cannot be the first time this has happened.

Your are being honest and did not try to hide anything when you bought the car so give it to them straight – if they want you to get a job at McDonalds fine then you’ll give them their verification in about a month as that is how long the process could take OR they can wrap things up now understanding you do currently have the availability to pay and or get a 401K loan – their choice.

Best of luck finding the next job!
posted by doorsfan at 8:06 AM on November 1, 2007

Claims that it's their problem and you can tell them to FOAD are misplaced. This is listed as the #1 scam over at Car Buying Tips. While you may not be being scammed here they clearly were playing fast and loose with your culpability by letting you out the door without an inked and completed loan.

You need to look at your purchase paperwork and see what it says about payment and "subject to loan approval" stuff, toot sweet. You may or may not have some protection in your state, though odds are it would involve you having to take the car back to the dealer.

If you have that option, DO IT.

Look over at the new motove vehicle board for your state here and see what information you can find about your options. They seem to run a mediation program and you might want to get them involved if you can't get resolution from the dealer.
posted by phearlez at 8:10 AM on November 1, 2007

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