[lumberjim]

It depends on the state. In PA, if you sign a contract with a customer, and are unable to get it funded, the customer can make their payments as agreed to the dealer, and legally keep the car. Unless they falsified info on the credit application.

When I worked in PA, we would put people out on a dealer tag, no contract signed until we had an approval. If it went beyond a week trying to get them hung, we would call them and break the bad news. If it was a bump, we would just get then in to finish the paperwork, and lay out the options available in person. I got pretty good at it. More often than not, the people were happy that we had done so much work trying to get to the deal as quoted, and understood that it was their credit that caused the change. We often reduced the price to get as close to it as we could.. But we never took losses.

At the friendly Nissan giant, the spot delivery (that's what you call this) is a rare thing. I very very rarely have to go into a deal "under water" (that means that the actual approval I have comes to a higher payment than sales quoted)

I did the first one of those in probably 3 years last week. They sold a used maxima that had been in stock for 188 days for $3033 under what they had invested in it. Then they quoted 2.99% because the customer had 706 and 708 credit scores. They failed to notice that they also had over $8900 in monthly payments on thier bureaus, and made $160k per year (13,333 monthly which is 69% debt to income.)...

I got them 3.23%, which made them angry... But then I took $150 more off the price of the car(which is what the rate bump would cost them) , which made them happy again.... then talked them into going 72 months at 4.44% with a warranty at a lower payment. Made $1100 of the loss back, and they were happy. People with $8900 in payments are clearly payment buyers. No cash down.

I predict a bankruptcy in their future.