It’s called spot delivery or yo-yo financing. By any name it’s a practice some car dealers use to extract additional money or a higher interest rate from a buyer long after they thought everything was settled.
Amanda, of Las Vegas, Nev., said she just experienced it at a local Honda dealer.
“I went in to buy a car and after finding one that I liked they said would be able to finance me if I had a co-signer,” Amanda wrote in a ConsumerAffairs post.
Amanda said she had a great credit score, proof of employment and a co-signer so she thought everything was fine. Then two weeks later, the salesman called and said she didn’t qualify for financing after all. She was told to return the car and they would find her something she could afford.
No car or money
“After taking time out of my work schedule to go down there again they said the only way they could finance me is if I got a car that I didn’t want for more money,” Amanda wrote. “I was extremely distraught at that point because I felt like I had to jump through hoops to make this work and that should’ve been their job. I put $2,500 down on the car and asked for my money back.”
Seems like a reasonable request, but Amanda said she found the dealer, who was quick to put her in a car, was not so quick to write a check.
“I returned the car three days ago and they said I wouldn’t receive my money for another three days, Amanda said. “So now they have the car and my money.”
Unfortunately, this is not an uncommon complaint. Kimmel Sullivan, a national law firm, handles a number of automotive and lemon law cases. The firm says consumers have more legal remedies than they might think.
Don’t have to give it back
“If you signed purchase documents and registration applications and if you obtained insurance for the vehicle, had a new license plate put on the car and/or had your old plate transferred, the car belongs to you,” the firm says on its website.
For that reason, it’s important to look over the sale and financing documents carefully, making sure you understand the terms and all documents are properly signed. A finance document showing payments, deposit, interest rate and other financial items is a binding contract, giving you specific legal rights.
According to Kimmel Sullivan, you own the car subject only to making payments. The dealer cannot change that once you take possession.