If a consumer buys or leases a motor vehicle from a dealer and the dealer arranges for the consumer to receive financing through a third party, Maryland law provides both the consumer and the dealer certain protections. When a consumer buys a vehicle, both the consumer and the dealer must sign a dealer provided notice that discusses your legal protections.
That notice should inform the consumer that if the third party finance company does not approve the financing within 4 days of the delivery of the vehicle to the consumer, the dealer must notify the consumer in writing that the financing has not been approved. Upon receiving this notice, the consumer or the dealer may cancel the lease or sale. Alternatively, the consumer and the dealer may agree on new financing terms.
If the consumer or the dealer cancels the sale or lease because of financing, the dealer must immediately return all money paid to the consumer. This includes the down payment, any subsequent payments, all taxes, fees (including titling fee), and any other charges assessed. If the consumer traded in a vehicle, the traded in vehicle must be returned to the consumer in the same condition in which it was when delivered it to the dealer. Furthermore, the dealer is not permitted to charge the consumer for use of the vehicle.
Of note, within two days of receipt of the notice that financing was not approved, consumers must return the vehicle to the dealer. Except for normal wear and tear, the vehicle must be returned in the same condition in which it was when the consumer received it. If the consumer does not return the vehicle, the dealer may repossess it. However, even if the vehicle was not returned to the dealer a consumer may be able to collect financial damages.
