If you are a victim of yo-yo financing or spot delivery scam, most probably you had a bad credit that the dealer used to his advantage. You go to the dealer, sign all documents at a surprisingly good rate and after a few days or a week the dealer calls you saying you did not qualify for the financing and you must come and sign a new contract at a higher rate. The dealer wants to make you pay a larger down payment and to raise the interest rate. Naturally, you don’t agree. But the dealer threatens to report that you stole the car, to destroy your credit, or to report to your employer that you are ”deadbeat”.
How Does Yo-yo Financing work?
Yo-yo financing commonly happens with inexperienced buyers or buyers with bad credit. The dealer offers a good rate that you cannot refuse and lets you take the car ”on the spot” before the financing is finalized. The dealer may call you back even if you have signed all the papers. The seller will come up with stories like the money will come out of his paycheck. When you refuse to pay the higher interest rate or a bigger down payment, they will start bullying. No matter what the seller says, this is a classic money grab.
To avoid being a victim of this common dealership scam, here is what to do.
How to Avoid Yo-Yo Financing?
The best way is to save money and avoid taking a loan. But if you need to get financing for your car, don’t let the dealer arrange your loan.
You need to take extra effort and search for a reputable bank or credit union. Take care that your credit is pre-approved before you shop for a car.
You are especially at risk if you have a bad credit. In case you have a bad credit, the dealer will tell you all in smiles, ”Bad credit? No problem”. This is a sign that you are going to get into a potential bait-and-switch in the making.
What to Do If the Dealer Scammed You?
Don’t pay a dime if you have signed a legally binding document and you are the owner of the car. But if you have taken the car without true financing, you can return it for a refund of your deposit.
Before you take any action, it makes sense to get legal advice. The attorneys at the Margarian Law Firm have extensive experience in car fraud legal actions and can help you get out of the unpleasant situation. If you have a legally binding document, our attorneys at the Margarian Law Firm will tell the dealer on your behalf that they have no right over the car. A letter from a lawyer can usually put a quick end to the scam.
Call the Margarian Law Firm for a free consultation. We will take care that the scammers will not have a single chance to gain an advantage over you.