The down payment is made as security for them that either you will buy the car, or if not they will at least get some money out of holding it for you while other people who may have wanted it can't get it. so it is probably in the contract that you signed (you should have a copy of it) that says either "down payment is nonrefundable" (you dont get it back) or if not you should call and ask.

Most car dealerships will give you a receipt for a downpayment or perhaps you have a sales contract. Check either to see what is said about downpayments. If downpayments are not mentioned, go down to the dealership and ask what their policy is (be sure to note the date, time, and name of who you speak with). They are the ones refusing to process the loan, so they probably do have to refund all or part of your downpayment. This might be different for a transaction that is cancelled by the buyer. If they do not refund all of your downpayment, ask for a copy of their policy regarding downpayments in writing. If they refuse, you might consult an attorney or consider filing a suit in small claims court. They may hold back a portion for time and effort on their part, but it should not be a lot. Check your local library or courthouse to see if they have a legal library accesibble to the public or try here http://www.nolo.com (great site for legal info and easy to use). You might also report them to your state's BBB (Better Business Bureau). Sometimes the BBB can point you to the right person or service in your state to help you settle the matter out of court. You should get it back though. Hope this helps :)

Read your contract.

I am going through something similar. I was told by a small used car dealership that I was approved for a car on a Saturday, but the actual paperwork would be finalized on Monday. So I gave them $5000 down and they made a contract stating the car was a loner until the paperwork was finalized. So long story short they didn't get me approved and I have been in 2 different cars of theirs for 3 months. They now want the car back. I never wanted to lease a car I wanted to buy it. And in the the contract it states that the money I gave them was a down payment towards the PURCHASE of the car. So aren't I legally entitled to my whole down payment back? Can I sue? Please HELP I don't know what to do