[indiana] Used Truck Engine Failed 1.5 Weeks After Purchase, Lender Says Financing Was Never Funded, Dealer Refuses To Return $6,000 Down Payment

LOCATION: Indiana, USA

I’m in Indiana and I’m trying to understand what our legal options may be regarding a used vehicle purchase.
In June 2026, my husband and I purchased a used 2017 Ford F-150 from a used-car dealership. We paid a $6,000 down payment and signed a Retail Installment Sale Contract. The dealership is listed as the original seller-creditor, and the paperwork also includes an assignment of the contract to a third-party auto lender.

Approximately a week and a half after we purchased the truck, the engine/turbo failed catastrophically. The dealership has had possession of the truck since shortly after the failure. We were eventually told that the repair would cost close to $7,000, and we were told that the warranty/service coverage would not pay for the repair.

Our contract shows a $3,425 charge for a vehicle service contract, but we were never given a copy of that service contract. We also do not have the FTC Used Car Buyers Guide that should have been provided with the vehicle. We have some GAP and ancillary coverage paperwork, but not the mechanical service contract listed on the financing agreement.

The first vehicle payment was supposedly due in July, but we never received an account number, welcome packet, payment instructions, statements, or anything else from the lender.
Because of that, I recently contacted the lender directly. The first several representatives could not even locate an active account using our names, Social Security information, VIN, or the application number we were originally given.

I was eventually transferred to their Funding Department. They located the application under a different application number and told me that:
the transaction was never funded
there is currently no payment for us to make
they do not have the completed documents necessary to treat it as a funded account
the dealership still needs to handle the transaction
because the vehicle has a major mechanical issue and the deal has not been funded, I should contact the dealership about canceling the transaction
I should call the lender back if the dealership refuses
I then emailed the dealership’s general manager and asked that the transaction be canceled and our $6,000 down payment returned.
He responded in writing and confirmed that what the lender told me was correct and said that we currently have no payment. However, he said we only have two options:
The dealership can try to obtain another financing approval through the same lender, or the dealership will keep our $6,000 down payment and repair the truck, with us making some type of arrangement regarding the repair.

We do not want another financing approval, and after everything that has happened, we do not want the truck anymore. We want the transaction unwound and our $6,000 returned.
We have saved the full sales contract, assignment paperwork, proof of the down payment, the dealership’s emails, the lender call recording/transcript, the GAP/ancillary documents we were given, and documentation regarding the engine failure.

My questions are:

If the third-party lender never funded or accepted the transaction, can the dealership still legally keep our entire $6,000 down payment?
Does the fact that the truck suffered a catastrophic engine failure approximately 1.5 weeks after purchase affect our rights even if the vehicle was sold “as is”?
How significant is it that the contract charged us $3,425 for a service contract that we were never given a copy of?
Does not receiving the FTC Used Car Buyers Guide create any additional rights or remedies?
Can the dealership submit us for another financing approval without our consent after we have told them we want the transaction canceled?
What type of attorney should we be looking for — consumer protection, auto dealer fraud, contract law, or something else?
We are already contacting Indiana consumer-protection attorneys, but I would appreciate any insight into what issues we should specifically be asking them about.