What a predicament.  I think that it may be best for you to go and seek help from an attorney in your area.  Someone needs to read the contract that you signed and see if there is a clause that deals with what happens if you werenot approved.  Although I would tend to agree with you regarding the validity of the contract at this point in time I want to make sure that you did not bind yourself n any other way.  I also agree that they can not force you in to a new contract with new contract terms.  They may be running scared because they jumped the gun and sold your car.  Get help here.  Good luck.