Dear Driving for Dollars,

I just bought a new car and drove it home thinking everything was fine. Then I got a call from the dealer saying I need to return the car. Is that legal?

— Carlos

Dear Carlos,

It is probably legal. What probably happened is the dealer got what is commonly called a conditional approval. This means the lender made the deal contingent on you meeting certain credit requirements. You didn’t, so now they want the car back.

This may not have been explained to you well, and it possibly was not explained at all. However, it is almost assuredly in the paperwork you signed. Look for a separate document or a section of the contract you signed that discusses a “rescission agreement.” In all likelihood, this agreement addresses the situation you are facing and therefore makes it legal, even though you drove the new car home. In most states, the dealer also is required to send you a rescission letter that explains the problem with financing in addition to the phone call you received.

Depending on your circumstances, you may be able to work with another lender to get financing for the car under the terms you initially planned or arrange to keep your new car, perhaps by making a higher down payment.

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If you have a car question, email it to us at Driving for Dollars. Read more Driving for Dollars columns and Bankrate auto stories. Follow her on Facebook here or on Twitter @SheDrives.

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