A spot delivery agreement (also known as a “yo-yo” sale) is a type of car dealership tactic that’s become increasingly controversial in recent years. Essentially, it’s a way for dealerships to let customers drive off the lot with a vehicle before the financing paperwork is finalized, only to later tell them that the original financing fell through and they need to either return the vehicle or sign a new financing agreement with less favorable terms.
How do spot delivery agreements work?
Here’s a hypothetical example to illustrate how a spot delivery agreement might play out:
You visit a car dealership and find the perfect car. The salesman runs your credit and tells you that you qualify for a low APR on a car loan. Excited to drive your new car home, you sign the financing paperwork and drive off the lot.
A few days later, the dealership calls you and says they weren’t able to secure the financing you agreed to and that you need to come in to discuss new financing options. When you arrive, they present you with a new financing agreement that has a higher interest rate and longer term than the original agreement.
The dealership might argue that the original loan fell through because of issues with your credit or other factors outside of their control. Regardless of the reason, you’re now stuck with a tougher financial situation than you anticipated.
Why are spot delivery agreements controversial?
The main problem with spot delivery agreements is that they’re often used to take advantage of consumers who are desperate to buy a car. Maybe you needed a reliable vehicle for work or school, and the dealer knew that you wouldn’t be able to walk away from the deal if the financing fell through.
Another issue is that spot delivery agreements often involve dealerships lying to consumers to get them to sign the original financing paperwork. For example, a dealer might tell you that you’re approved for a loan when they haven’t actually run your credit yet.
What can you do if you’re caught in a spot delivery agreement?
If you’re ever in a spot delivery agreement situation, there are a few steps you can take to protect yourself:
1. Don’t sign any new financing paperwork without reading it carefully and making sure you understand the terms.
2. Consider contacting a lawyer who specializes in consumer protection to see if you have any legal options.
3. File a complaint with your state’s attorney general or consumer protection agency if you feel that you’ve been taken advantage of.
Overall, spot delivery agreements are a controversial practice that can harm consumers. If you’re ever in this situation, be sure to take steps to protect yourself and consider speaking out to help prevent others from facing similar situations.