Don't Fall Prey to Spot Delivery Scams and Yo-Yo Financing

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edited April 2017 in Editorial
imageDon't Fall Prey to Spot Delivery Scams and Yo-Yo Financing

A practice called

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  • scottklein1_scottklein1_ Member Posts: 1
    As mentioned in the article, "spot deliveries" are essential to car dealers in terms of selling vehicles. If a subprime customers comes to purchase a vehicle at non bank business hours where the dealer can't get an approval, the dealer is going to make a decision on whether they can get a deal approved. They will try and guess the rate and terms based on experience. Most of the time they get it right.

    Other times the rate might be higher and even more money down which means the customer has to come back and sign a new contract. Maybe they can't get the deal done at all. But if you were the dealer and a subprime customer wanted to buy a car and you told them that "We need to get an approval from the bank before we can deliver you a vehicle. Come back in a couple days when we have everything all worked out." What do you think the chances are that you'll ever see that customer again? That's right...slim to nil. They'll go to another dealer that will spot deliver the car, and the first dealer just lost a sale. You only need lose a couple deals like that before you'd jump into the spot delivery arena.
  • kyash2909kyash2909 Member Posts: 1
    I've been just victimized by this spot financing crap. I had my misgivings, given my credit (due to job losses and medical stuff) about whether I could be financed. But I thought these computerized systems could provide instant approval. Now this dealer wants us to come back in and discuss a deal with worse terms. They already have our trade.

    So we plan to sit there and tell them that if they cannot give us back our trade, then they're gonna have to do something for us to give us a similar deal to what we had when we drove off the lot. I have a feeling we're gonna end up talking with the dealer's general manager.

    How about foregoing a sale if a deal can't be done? Be upfront. Tell me you cannot finance a car for me right now. I don't know about anyone else, but you won't find me running from dealer to dealer if I know I'm not finance-worthy. I'm gonna wait.

    In other words, don't make promises you ultimately cannot keep. You might make the sale, but you're gonna end up with one pissed off customer.
  • druciferdrucifer Member Posts: 2
    As a consumer, you should never accept "instant" delivery of the car, even if the dealership offers it. Once you make the deal, just tell the dealer you will be leaving in your old car (or taking the bus or getting a ride, whatever works) and giving them time to prepare, wash and get the new car in deliverable condition. Let them know you expect the car to be delivered in top, spotless clean, condition and you will be inspecting the vehicle closely when you pick it up in a few days. Last time I bought a car, I did the deal on Thursday and picked it up the next Monday night. That way, you can also double check that the financing went ok when you pick it up. In fact, I would recommend that you personally verify with the financing bank/firm that you have "locked in" financing before taking delivery.

    Just remember to always take delivery within 3 business days of doing the deal in most states. Usually, after 3 days, it becomes harder to undo a deal if you need to.
  • isellhondasisellhondas Issaquah WashingtonMember Posts: 20,350
    There isn't anything sinister about doing a spot delivery.

    Stores pull your credit and they instantly know what your score is and whether or not you're going to be approved. If your credit is bad or marginal, no smart store will deliver the car until they know for sure.

    The store where I worked for 13 years never had any kind of a problem.

    When the customers were in finance we would have the cars washed and ready to deliver.

    We would insist the customer did a walk around to make sure there was no damage and we would have them sign a form so they couldn't come back the next day and blame a scratch or something on us. Never had a problem.

    Until a car had been DELIVERED and driven off the lot, the customer can unwind the deal and the stores are well aware of this. Some well meaning friend or neighbor will be quick to tell the customer that they paid too much or that they should have bought something else.

    Deal with an ethical store and you'll never have a problem!

  • janethnr22janethnr22 Member Posts: 1
    i just bought a used car a day ago but didnt drive it off the dealership. it was late at night and wasnt able to get insurance for it. also the deal was to put $2000 and so far ive only given them $500. I want to back out of the deal as per my stupid fault i forgot to ask about the APR which is 21%!!! they got me good. Could i give it back since i never drove off with the car nor gave all the down payment?
  • steverstever Guest Posts: 52,457
    Maybe - I've seen a lot of posts over the years saying that if you don't drive away in the car, the sale isn't final. Never have seen anyone post the "legal" basis for that. Maybe some of our dealer members will chime in.

    Try calling the dealer and tell them you've changed your mind and want your money back. Depending on the response you get, then I'd call the local consumer protection agency or AG's office for advice. Good luck!

    Can You Return the Car You Just Bought?
  • isellhondasisellhondas Issaquah WashingtonMember Posts: 20,350

    i just bought a used car a day ago but didnt drive it off the dealership. it was late at night and wasnt able to get insurance for it. also the deal was to put $2000 and so far ive only given them $500. I want to back out of the deal as per my stupid fault i forgot to ask about the APR which is 21%!!! they got me good. Could i give it back since i never drove off with the car nor gave all the down payment?

    Maybe or Probably is a good answer.

    That store will fight like a cornered rat but unless laws vary by state I'm thinking that unless you drive the car off
    the lot you should be O.K. Prepare to meet a lot of resistance however!
  • privatecitizenprivatecitizen Member Posts: 1
    I'm in N. CA, shopped at 2 different competing brother's dealerships, in different towns, for a used car. #1 older bro assured me he had 'special dealer' 1.9%..so I believed him, BUT 2 weeks later found a car I wanted at #2 bro- who instantly agreed to match #1's offer of 1.9%. I spent a month test driving 3 of his cars, all the way confirming I would purchase there, was given 3 printed finance sheets with 1.9%, all the loan details, etc, so I assume I get that rate.

    Three days before closing I am visiting the dealer on a holiday finalizing which car, and ask what I need to bring when I come to get my new one, I mention the 1.9% rate . #2 brother verbally blows up claiming he never ran my credit, I don't qualify for 1.9%, "it's only for special people" bah blah...I was stunned, and beyond angry.

    I call the credit union later which BOTH brothers use, and MOST car dealers locally, ask why one says I am qualified, other one says not, am told #1 was 'confident', #2 was 'not confident'...so why promise, then renege in such an ugly way? At first I thought he FORGOT he offered, but why get upset at me? The CU loan officer said ALL their dealer loans are "conditional' on THEM accepting the loan, no matter what the dealer claims..

    I wonder if he planned the yoyo finance trick by not asking for my credit info UNTIL he is sending all the loan paperwork to the CU?. Then he can blame THEM if I don't get the low rate. Was this the plan? Let me sit there with NO vehicle anymore, and no option but to drive off with one of his cars?

    WHY piss off a customer? I came in as a retiree, a solid buyer, own my home for 17 years, own my car, have no debt, a long excellent credit history, (but am not that active using credit now) and am putting 42% DOWN on a $28K total. #2 ended up getting me the 1.9% but it was a miserable, screaming experience, and CU defended his behavior. In the end I DID NOT buy from him, and walked away.

    In small towns the yoyo trick would be well known if he's been pulling it for years, but I wonder if people here are either too unclear on this, or too embarrassed to admit it happened to them, or if he just changed his mind with me.
  • kirkhilles1kirkhilles1 Member Posts: 863
    I don't know if the laws have changed any, but if an ethical dealer is in that situation, I think its pretty easy to resolve. Explain to the customer. Tell them that the deal is not 100% finalized yet. Tell the consumer that they may have to drive it back or alternatively, they can leave it at the dealership till the deal is finalized. A lot has to do with expectations. Getting your hopes dashed is never fun, especially if you've told others about it.
  • frias0613frias0613 Member Posts: 1
    I bought a car in feb 20 now being April got a call from the dealer saying they didn't approve my loan that I will need a different co signer since the one I have doesn't live with me at my address , and I told them I don't have one , now they want to take my car away , I gave 1000 down payment , what can I do or suggest to do?
  • MichaellMichaell ColoradoModerator Posts: 186,561
    frias0613 said:

    I bought a car in feb 20 now being April got a call from the dealer saying they didn't approve my loan that I will need a different co signer since the one I have doesn't live with me at my address , and I told them I don't have one , now they want to take my car away , I gave 1000 down payment , what can I do or suggest to do?

    If you turn the car back in to the dealer, you will get your money back.

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  • isellhondasisellhondas Issaquah WashingtonMember Posts: 20,350

    I'm in N. CA, shopped at 2 different competing brother's dealerships, in different towns, for a used car. #1 older bro assured me he had 'special dealer' 1.9%..so I believed him, BUT 2 weeks later found a car I wanted at #2 bro- who instantly agreed to match #1's offer of 1.9%. I spent a month test driving 3 of his cars, all the way confirming I would purchase there, was given 3 printed finance sheets with 1.9%, all the loan details, etc, so I assume I get that rate.

    Three days before closing I am visiting the dealer on a holiday finalizing which car, and ask what I need to bring when I come to get my new one, I mention the 1.9% rate . #2 brother verbally blows up claiming he never ran my credit, I don't qualify for 1.9%, "it's only for special people" bah blah...I was stunned, and beyond angry.

    I call the credit union later which BOTH brothers use, and MOST car dealers locally, ask why one says I am qualified, other one says not, am told #1 was 'confident', #2 was 'not confident'...so why promise, then renege in such an ugly way? At first I thought he FORGOT he offered, but why get upset at me? The CU loan officer said ALL their dealer loans are "conditional' on THEM accepting the loan, no matter what the dealer claims..

    I wonder if he planned the yoyo finance trick by not asking for my credit info UNTIL he is sending all the loan paperwork to the CU?. Then he can blame THEM if I don't get the low rate. Was this the plan? Let me sit there with NO vehicle anymore, and no option but to drive off with one of his cars?

    WHY piss off a customer? I came in as a retiree, a solid buyer, own my home for 17 years, own my car, have no debt, a long excellent credit history, (but am not that active using credit now) and am putting 42% DOWN on a $28K total. #2 ended up getting me the 1.9% but it was a miserable, screaming experience, and CU defended his behavior. In the end I DID NOT buy from him, and walked away.

    In small towns the yoyo trick would be well known if he's been pulling it for years, but I wonder if people here are either too unclear on this, or too embarrassed to admit it happened to them, or if he just changed his mind with me.

    First of all I would be shocked if any Credit Union were to offer a 1.9% loan rate on a used car! I suspect that the dealer "bought it down" to get you that rate and simply tacked the difference onto the price of the car. I could be wrong but even at today's low rates, that doesn't seem possible.

    At any rate, a dealer should tell people that they MAY be able to obtain a certain rate providing you qualify. Even retirees with good credit may not qualify for top tier financing.

    In any event, you got the rate you wanted so it's probably best to put this behind you now and enjoy your new ride!
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