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My dad bought a car from a big motor dealer, he part exchanged his car, paid £300, signed all the finance documents and k delivery of the new car a few days later! about 3 weeks passed and then the dealers rang him, said that the finance company hadnt paid out for the new car and they would need the car back. they said he could have his old car back. where does he stand? does he have to take his old car back and what about the deposit

Depends on what type of finance deal it is. hp means that the garage can take it back. credit, if your dad has paid more than 60% (inc part exchange) of the worth of the vehicle, then they cannot take it back.