Automotive Addict

When you go to a dealership to buy a car, sign all the paperwork in the finance office, drive off, end of story right? Most of the time yes, but what happens if a dealer calls you back and tells you they could not obtain financing for you? This is called "Spot Delivery" as far as car dealer lingo goes or "Spotting the Deal."

It seems when you sign all the paperwork at a dealership that everything should be final, but this is usually not the case. Here is how dealerships operate when financing a car for customers. They have trained Finance personel to look at your credit and determine what rate they believe they can get for you based on the Finance company's standards. The standards set up by the lenders will depend in part on your credit score, type of vehicle you are buying, miles on vehicle, how long you are financing, how much money down, are you trading a car, do you have negative equity? These are just a few factors so you can see how complex these issues can be. Now, most of the time when you sign the paperwork at a dealership, the lender has not given the dealership the final approval or the final interest rate. Many times it may be the next business day before the dealer will know how much the interest will be or if the deal will even be approved.

Many larger dealers will look at your deal and make an educated guess (most of the time very accurately) at your rates. Now realize this as well. When you finance anything, the rate you are given is usually not the best rate possible because interest rates will be marked up just like vehicles. Your buy rate may be 5% and the dealer charges you 7%. The extra money made from the interest goes to the dealer. For anyone in Car Sales, you always get the question on the lot, how much will my Interest Rate Be? Never tell a customer you will get the best rate possible! This will set the dealer up for a lawsuit because a customer usually never gets the best rate possible. Tell the customer: Every customer and every vehicle qualify for different rates and you will be more than happy to figure an interest rate once the application process has been completed.

But, what happens when a dealer calls you and tells you they could not get your vehicle financed? Here is what happens on the dealers side. They believe they can get your deal worked out when you drive off with the car, but lenders are funny sometimes. They may decline a deal that you were sure you could get worked out. The dealer will call the lender back the next day and give them a reason to buy your deal. They may have the General Manager or Owner of the dealership call to try getting your deal worked out. Believe me, they will try every possible option to keep from calling a customer and telling them to bring the car back. This is what they refer to as "Rehashing a deal" and there are some finance managers that are better than others when it comes to "rehashing". This may even be turned over to a Finance Director is some larger dealerships. They will try to find some way to go with your deal. They may even call the customer back and tell them that another $1000 down is needed to secure the deal or the customer may have to resign paperwork if another lender is chosen. It is always a last resort to call a customer and have them bring the car back.