Can a Dealer Take Back a Car After Papers Are Signed? Is it Legal?
The short answer to the above questions are Yes and Yes.
It’s a fairly common situation.
You buy a car from a dealer who arranges a loan, you sign the papers, possibly make a down payment and/or trade an old vehicle, and you drive away — thinking the deal is done.
You may have received the impression from the dealer that your loan was approved, which is presumably why you were allowed to drive away in your new car.
However, most dealers don’t provide or approve loans (except for buy-here-pay-here used car dealers). They use outside banks or finance companies. One of the papers you signed was a loan application, not a loan approval or grant.