Do I need a cosigner to buy a car?

What happens if you buy a used car with financing contingent upon a cosigner, then the cosigner won't sign?

• A friend of mine just bought a used car, drove it off the lot and has been driving it for about a week. His mom agreed to cosign so he gave the dealer $1000 down payment, signed the paperwork, then the rest of the paperwork was mailed to his Mom to sign and return. Upon receipt of the paperwork, his mom basically decided she would rather ship him one of her old cars than have him take on a $10,000 loan in this economic climate. What does he do with the car now that she won't sign the papers? I'm assuming it is returned to the dealer, but what happens to his down payment then and does he owe them for miles or anything? It doesn't seem like it should be his fault that they let him drive off the lot with a car that wasn't completely approved for financing, especially with a cosigner situation. It's like they wanted to get him in the car as soon as possible so he can't change his mind, but the cosigner still can change their mind, as they haven't signed anything yet, right?

• Answer:

  Nothing is final until all the paperwork is signed. The co-signor backed out so there will be no sale. The car needs to be returned, the deposit refunded and the deal is voided. Don't let them jack around on the refund of the deposit either. The dealer will do everything they can to keep it or some portion of it. Don't let them get away with that.