I would have thought that the finance company would not have a leg to stand on legally. They would be the ones defrauded and they would not be able to pass the consequences of that fraud off onto a third party, ie the legitimate seller who accepted the payment in good faith. After all it was not the seller who asked for a loan.
I had a similar experience with the sale of a motocycle in Australia. The buyer had stolen bank account cheque and deposit books from a neighbour who had gone on holidays. He started by making deposits in the account and chatting up the bank staff. He then started getting bank cheques (also known as a cashier's cheque) to pay for purchases; furniture, electrical items, stereo, and my Laverda. He filled up a container and shipped it to New Zealand and the theft/fraud was discovered when the neighbour returned from holidays. In the meantime I had banked the cheque (I had phoned the bank to be sure it was legit before accepting it). Much to my surprise the bank cheque had been cancelled and I had a visit from the police. At the end of the day they missed him at the airport by a couple of hours and the container, even though they could only surmise that it existed, was untraceable. They told me it was not worth starting extradition proceedings because the cost would be greater than the money stolen, so he got away with it.
In the end I won against the bank and received a replacement bank cheque as it was judged that the bank could not pass off the consequences of a fraud on to a third party, ie me, who had accepted a legitimate payment to me that had been made by the bank.
I wonder if that would happen here as well? Perhaps you were fortunate in that you had rung the bank for confirmation, and they had failed by allowing the frauder to use these cheques after he had spoken to staff (guessing no ID so he did it by building up trust).
My initial thoughts on the OP's scenario would be that once the fraud was discovered the money would be removed from your account as it is not yours, and you never had an guarantee from the bank but rather assumed it was legitimate and released the vehicle - meaning you would lose the money and vehicle in question.
Either way it is worrying that it is that easy for someone to apply for a loan, chances are when you sell a vehicle the person will know your name/address and bank details for the transfer.. so if he manages to figure out just a few more you are a bit stuck unless you do a lot of due diligence on the payment recieved via your credit report and wait a certain amount of time before handing over the keys..
