Have you ever been the victim of Yo-Yo Financing?

[FelixDeCat]

No, this isnt some new Asian finance company. It is a growing trend in automobile fiancing. Im just surprised people have actually gotten away with it:

http://www.negativeequityauto.com/yo-yo-financing-trap.php

What is Yo-Yo Financing?

It's a highly sophisticated scam. After you have taken delivery of your new vehicle, the dealer calls to inform you that you did not qualify for the financing you had applied for at the time of sale and you must return and sign a new contract with new financing at a higher rate. Some call it "bait-and-switch financing." It's also called "spot delivery," since it involves letting you take delivery of your new vehicle on the spot, even if the dealer says that the financing has not yet been approved. How does yo-yo financing happen?

After several hours at the dealership, you finally choose a car and agree on the purchase price and any add-ons. You think the negotiations are over and your guard is down.

Then you are introduced to the Finance and Insurance (F&I) manager, who is all smiles and acts friendly. He tells you he'll find you a loan at a terrific rate. The interest rate for the loan seems reasonable. You sign the documents. The dealer hands you the keys to your new auto, and you drive off, thinking you are now the proud owner of a new car.

You show your new car to your family, friends, and co-workers. Everything seems to be going just fine.

Then the dealership calls you and tells you to come back. When you do, they try to get you to pay a larger downpayment and they want to raise the interest rate. They may insist that you get someone else with better credit to co-sign for the loan.

If you balk at signing a new contract, they try to make you feel trapped into agreeing to a worse deal than you had already negotiated. For example, they:


Threaten to report the vehicle as stolen, unless you return it immediately – leaving you with no way to get home, especially if you go there alone at night and don't have cash for an expensive taxi ride

Threaten to repossess the vehicle and destroy your credit

Threaten to report you to your base command, if you are in the military

Threaten to report you to your employer as a "deadbeat"

Claim your credit is worse than you thought (even when it is often better than they claim)

Claim they have sold the vehicle you traded in, although it may still be sitting on their lot

Claim they tried to find you a loan at the lower rate, but it fell through (later you may find out they never even submitted your loan application to a lender)

The bottom line is that they act like they have you over a barrel and can change the terms of the original contract, and pressure you into agreeing to a new contract with higher rates.

 

[MichaelD]

The cello guy is financing things now? Wow, the classical music business must be bad.

 

[LookBehindYou]

Had that happen with my first attempt at purchasing a car. Was in 1999, bought a car at the dodge dealership, they called me the next day with the "new" financing terms. Was double the interest rate with double the down payment they had said. I drove the car back and told them to piss off and went elsewhere.

 

[FelixDeCat]

The cello guy is financing things now? Wow, the classical music business must be bad.

I always that his name was Yo Mama.

 

[MichaelD]

I always that his name was Yo Mama.

It's Yo-Yo Ma. http://www.yo-yoma.com/yo-yo-ma-biography

I was just trying to be funny.

 

[Macamus Prime]

Another example of hard working Americans.

Keep up the good work! You'll just end up eating each other eventually and we can finally be rid of the greedy cocksuckers who have fucked this nation raw and hard.

 

[alent1234]

never heard of this

i've bought 3 new cars in the last 8 years and every time i've signed real finance paperwork, a real bank note, all the legal state documents, etc. if the dealer were to call me i'd tell him the paperwork is done. i read everything and one time the finance guy tried to sneak in the extra warranty on me

 

[MotF Bane]

Get your loan elsewhere.

 

[Gillbot]

This has actually happened to me multiple times. I just tell them fix it or i'll gladly bring the car back and buy elsewhere. Magically, it gets fixed.

 

[highland145]

I remember someone this happened to, week(s) later. The dealer couldn't get it approved anywhere AND they'd already sold the trade in.

 

[HamburgerBoy]

It's Yo-Yo Ma. http://www.yo-yoma.com/yo-yo-ma-biography

I was just trying to be funny.

And here I thought you were making a joke about the Jello man.

 

[Doppel]

I remember someone this happened to, week(s) later. The dealer couldn't get it approved anywhere AND they'd already sold the trade in.

Then dealer should have to self-finance or eat the loss or buy them another vehicle equal to their trade in.

This is actually a common thing, at least I know I've heard of it. I actually did fall for a similar thing once. Was given a new vehicle to test drive over the weekend along with a price I could like, then by end of weekend suddenly they had made a mistake with the price and for only a few hundred more more we'd be good to go. Fvck me I fell for it. I was young. The truth is I still got a great price on the thing but if I had my right head about me I would have told them to pound sand. I am SURE they would have suddenly been able to make the previous figure work.

Anybody who is called back after the fact must go back to the dealership and drop the car off. Siphon most of the gas out first into somebody else's car as a final f you.

 

[arcenite]

This happened to me but I don't know if it was a scam. They were dirtbags, but I don't know about scammers. I went in after doing all of the calculations. I knew how much I wanted to spend /mo over 5 years. It's amazing how much I learned about buying a car from this 'dealership'. This was a few years ago and I bought an '06 GTO from a Nissan dealer in central jersey.

My first mistake was answering the salesman when he asked me how much I wanted to spend. But luckily I also knew the number of years, because they came back right on my number but at 6 years instead of 5. I started to walk away. And like others, it was magically "fixed" to 5 years. Funny how that worked.

I drove home with the car. I don't think they were counting on this part, LOL. The next few days I drove to Maryland (From NJ) for some business. We get a letter in the mail from GMAC saying that my financing had not been approved since it was for more than the car was worth (I think the financing was for 21k and they only wanted to finance 18xxx). Fine with me.

We called the dealer numerous times and they were not answering our calls. We had to go to NJ Consumer Affairs to get this resolved. Finally they call me and get it resolved. He said we can redo the loan for 18xxx or whatever it was BUT wanted me to forego GAP insurance. I LOL'd and said no, and if that was a problem, the car would be on his lot as soon as I got home from MD.

Everything was magically fixed, but boy was it a wild ride. And I've learned my lesson to get financing elsewhere.

BUT -- anyone who is in the know have any idea what the fuck happened? It was so strange to me. Luckily it worked out in my favor.

 

[OutHouse]

no because i get pre-approved by my credit union and take that loan number in with me to the dealership.

 

[bobdole369]

No, this isnt some new Asian finance company. It is a growing trend in automobile fiancing. Im just surprised people have actually gotten away with it:

http://www.negativeequityauto.com/yo-yo-financing-trap.php

Sort of but not exactly, didn't get screwed in any event.

Car I bought for about 9k, original finance company wanted $1k down, so 8k+ financed. Took delivery and they call back 2 days later - needed $500 more down but ended up with less interest rate and threw in a bullshit warranty for the trouble. Total price stayed the same.

 

[Capt Caveman]

Never happened to me and I bought a new vehicle this year. If anything, I even got a better than advertised interest rate on financing b/c of my credit score.

 

[GrumpyMan]

Bought a Mazda one time, agreed on interest rate. Before signing looked over the contract carefully and noticed that the interest rate had gone up from 3.6 to 9.8. So I ask the asshole what's up with that? He said, "We couldn't get you that rate." So I asked him if I could borrow his phone, called the wife at that time and told her to come pick me up, no new car for her. Got up and started walking out the door to wait for the wife. Before I got to the door the sales dick ran to me and said that they had made a mistake. Got the 3.6%, bought the car.

Moral of the story: always read the fine print before you sign on the dotted line.

 

[richardycc]

ATOTers don't need financing, we all make 6 figures, remember?

 

[OILFIELDTRASH]

Bought a Mazda one time, agreed on interest rate. Before signing looked over the contract carefully and noticed that the interest rate had gone up from 3.6 to 9.8. So I ask the asshole what's up with that? He said, "We couldn't get you that rate." So I asked him if I could borrow his phone, called the wife at that time and told her to come pick me up, no new car for her. Got up and started walking out the door to wait for the wife. Before I got to the door the sales dick ran to me and said that they had made a mistake. Got the 3.6%, bought the car.

Moral of the story: always read the fine print before you sign on the dotted line.

I would of left regardless. I'm a complete dick to car dealerships. I tried being the nice guy before it gets you nowhere. Now it's I want this price and this financing rate or see ya later. No problem walking out. Actually it's rather enjoyable giving them some of their own BS.

 

[Stuxnet]

This isn't new at all. This happened to me when I bought my first car back in 1998, again in 2000, and my wife's car in 2001. In all three cases I told them "go fuck yourself; you will eat this car before I resign any documents. You know where it's parked; come and get it."

In all 3 cases it was the last word on the matter.

The only reason I had the stones to do that the first time was because I had a friend who had previously sold cars, and I told him about the voicemail left on my answering machine (remember those days...) by the dealership. He laughed it off and explained that it was pretty standard procedure when dealing with "fish" (the younger crowd and people with "fuck me sideways" stamped on their foreheads). I was 20 at the time and ripe for the picking, apparently.

I've bought 3 or 4 cars since then, and it hasn't happened since.

Anyway, I don't know if it's illegal. I just know that it's common. If it happens to you, just tell them to come get the car.

 

[dainthomas]

no because i get pre-approved by my credit union and take that loan number in with me to the dealership.

This. Only an idiot would let the scammers at dealerships take care of the financing.

1. Get preapproval from your financial institution
2. Load KBB app on your phone.
3. Find car that matches your preapproved amount
4. Profit?

 

[Capt Caveman]

This. Only an idiot would let the scammers at dealerships take care of the financing.

1. Get preapproval from your financial institution
2. Load KBB app on your phone.
3. Find car that matches your preapproved amount
4. Profit?

I got better financing thru the dealership's bank. A bank that I already had a credit card with. A number of car makers offer some great interest rates for financing thru them. Just comes down to the dealership when dealing with possible scumbags.

 

[foghorn67]

no because i get pre-approved by my credit union and take that loan number in with me to the dealership.

This.

 

[Riverhound777]

Only bought one car from a dealership. I was young but not stupid. First dealership thought I was insane asking about invoice pricing and said he would rather keep the car than charge me less than MSRP. I said fine and walked, he didn't try and stop me. Other dealership was super nice and gave me the AAA deal with $300 over invoice minus a $500 rebate for a final price of $200 under. In either case I had gone to my credit union to get pre-approved for a loan. The dealership couldn't match it, and that was probably for the best. Very pleasant all around with second dealership. Probably because I went through their Internet Sales manager instead of working with a salesperson at the dealership. Price was negotiated before I ever went.

 

[Stuxnet]

This. Only an idiot would let the scammers at dealerships take care of the financing.

1. Get preapproval from your financial institution
2. Load KBB app on your phone.
3. Find car that matches your preapproved amount
4. Profit?

Really? This "idiot" has 0% on both of his current vehicles (purchase, not lease) because he financed through the dealership (Nissan, FWIW). Get THAT with your credit union :biggrin:

Of course, you need stellar credit... otherwise they'll bend you in half. If you have good credit and pick your timing, you can get incredible deals on financing through the dealerships.