Yes, your car lease can technically be denied or rescinded after you've taken possession of the vehicle, but it is a rare and serious situation known as a lease unwind or spot delivery rescission. This typically happens if the dealership's financing source (the bank or leasing company) ultimately rejects your credit application after you've already driven the car home.
The core reason this occurs is due to a financing contingency. When you drive off the lot, the dealer has often only given you a "spot delivery," meaning the lease contract is not yet final. It's conditional on the lender's final approval. If the lender's underwriting process uncovers issues not initially apparent—like discrepancies in your income, a sudden drop in your credit score, or an inability to verify stated information—they can refuse to buy the contract from the dealer.
You are legally obligated to return the vehicle if the financing falls through. The dealer will contact you to bring the car back and unwind the deal. You should not continue making payments on a rescinded lease. While inconvenient, you are not liable for mileage or wear-and-tear during this short period. However, if you traded in a vehicle, the situation becomes complex, and its return is often negotiable. To protect yourself, always ask the dealer if the financing is fully approved before taking possession and get any promises in writing.
| Scenario | Likelihood | Primary Reason | Your Obligation |
|---|
| Credit Application Rejection | Low, but most common | Lender finds issues during final underwriting (e.g., income verification failure). | Return the vehicle. |
| Dealer Fraud or Error | Very Rare | Dealer made a significant mistake on pricing or terms that makes the lease unprofitable. | Return the vehicle; you may have legal recourse. |
| Yo-Yo Financing (Spot Delivery Scam) | Unethical but occurs | Dealer uses spot delivery to pressure you into signing a new lease with worse terms later. | Seek legal advice; do not sign a new agreement under pressure. |
