There are many reasons for the call back. Most often, the dealer has overcharged you for the car, and the contract price exceeds the guidelines of that bank. This is a scary proposition, because most banks will buy a contract with a sale price of up to 130% of fair market value and this does NOT INCLUDE extras such as service contracts. If you have exceptionally good credit, there is no cap and a bank could approve a contract of 200% of Fair Market Value. This sometimes happens when a consumer trades in another car with lots of negative equity that is rolled into the new RISC.
A second reason for the call back, is that the dealer KNEW he could not sell the RISC at that rate or amount financed, and PLANNED to call you back in a few days after you had shown all your friends your new car. That way, you would sign ANYTHING to avoid telling your friends and family members you did not qualify for automobile financing.
So, if your dealer tells you the bank requires you to return and sign a new contract, he is lying. They all do it. They do not want you to know what is really going on. The most often-used lie is, “The bank requires a larger down payment.” This will help to bring the amount financed into line with the bank’s guidelines.
When you get this call, the dealer is notifying you he cannot get a financial institution to purchase your RISC and he is opting to cancel the contract. Let him know you know your rights, you are returning the vehicle and you want your down payment and trade-in vehicle back immediately. YOU are now in the driver’s seat.
The dealer does not want to lose this deal. If you are a good negotiator, this is the time to put it to the dealer. The dealer may then lower the price of the vehicle (not to help you, but to bring the amount financed within a bank’s guidelines.) But at this point the dealer already has tried to rip you off. You need not sign a new RISC no matter what the dealer says.