It’s reasonable to expect that after you sign the paperwork and drive your vehicle off the lot, the car is yours. Unfortunately, that’s just not always the case. Some dealerships engage in a practice known as “spot delivery scams,” also called “yo-yo sales.” This practice can cause very real financial and legal problems for unsuspecting buyers who think their purchase is finalized when it isn’t. If you believe you may be a victim of a spot delivery scam, continue reading and reach out to a knowledgeable New Mexico car dealer fraud lawyer from Feferman, Warren & Mattison to learn about how we can help. Here are some of the questions you may have:
What Is a Spot Delivery?
A spot delivery happens when a dealership allows you to take a car home before the financing is actually approved by a lender. Frequently, dealers don’t tell consumers that the deal is a spot delivery. They may not mention that financing is pending, or they may lie and state that everything is complete.
Spot deliveries are not illegal. Dealers are allowed to have you sign the paperwork and leave with the car even if financing is not complete. If the financing falls through, the dealer may be able to ask for the vehicle to be returned, as long as all of your down payment and trade-in are returned.
However, spot deliveries sometimes lead to two different kinds of scams.
What Are the Warning Signs of a Spot Delivery Scam?
The first kind of scam is when the dealer does not pay off your trade-in while it tries to complete the financing. New Mexico law says that if financing is not complete when you trade in a vehicle, at a minimum, the dealer must make payments on the trade-in until the financing is complete and the trade is paid off.
The second kind of scam is a “yo-yo” sale. Days or even weeks after buying a vehicle, you might receive a call saying your financing fell through and that you need to return to the dealership to sign new paperwork, often at a higher interest rate or with a larger down payment. Essentially, this tactic preys on the emotional connection people form once they’ve driven a car home. You may have already sold your old car, arranged insurance, or started making plans around your new vehicle. By this point, the dealership knows you’re invested and more likely to “bite the bullet” and just agree to unfavorable terms to keep the car. Although you might be required to return a vehicle if financing falls through, you are never required to sign new paperwork on less favorable terms.
If you’re already a victim of one of these scams, you should reach out to a New Mexico consumer lawyer as soon as you can. You have rights under the New Mexico Unfair Practices Act and other statutes. Our team can help you enforce those rights and work to obtain a favorable outcome.
If you have further questions or would like to speak with an attorney about your case, simply contact our firm for a free consultation today.
