What must the dealer do if credit is not approved within a specific time frame after a prelease agreement?

If credit is not approved within the specified time frame after a prelease agreement, the dealer has the option to cancel the agreement. This action is grounded in the premise that the prelease is contingent on securing financing for the buyer. If credit is not approved, the dealer is not obligated to proceed with the lease if such financing is essential to the completion of the transaction.

This provision protects both the dealer and the consumer—allowing the dealer to avoid proceeding with a transaction that they cannot fulfill due to the lack of approval and also safeguarding the consumer from being bound to an agreement that cannot ultimately be financed. Therefore, canceling the agreement is a legitimate and standard course of action when financing does not come through within the agreed timeframe.