How to Protect Yourself From the Yo-Yo Financing Trap?

How to Protect Yourself From the Yo-Yo Financing Trap?

Purchasing a vehicle is probably one of the most important decisions that you make in life. Although it is an exciting process, you may come across various obstacles. Actually, today’s auto market is full of unscrupulous dealers. That’s why; you should practice caution when buying a car. The key to protecting yourself from auto dealer frauds is education. In other words, you should raise your awareness of the most common car scams. Yo-yo financing is on the list of the widespread financing scams, that unethical dealers enjoy using. It is an effective way of increasing their profits. Keep on reading this article to learn what is yo-yo financing and how to avoid falling into this trap.

What is yo-yo financing scam?

Here is a situation typical of yo-yo financing fraud. It can help you have a clear idea of this scam.

You head to the dealership full of enthusiasm. After spending a few hours negotiating with the dealer, you succeed in agreeing on the purchase price. After this step, the dealer will take you to the financial manager. He/she will politely inform you about the possibility of getting a car loan with a very low-interest rate. The next thing that you do is signing the documents and driving your vehicle home with great excitement. However, at that moment you cannot even imagine that you will get ‘’pleasant’’ surprise later on. You are over the moon that you became the owner of your favorite model. You have been dreaming about this vehicle for a long time. Now your dream is a reality. So, you are showing your new car to everyone, including friends and family members.

All of a sudden, you receive a telephone call from the dealership. You are astonished when you became aware that your car loan isn’t approved. You visit the dealership to find out that you have a bad credit score. So, you don’t qualify for a car loan with low-interest rate. Then, a smart dealer uses high-pressure techniques to persuade a consumer to pay a larger down payment. So, they offer you signing another car loan with higher interest rate.

What steps should you take to avoid yo-yo financing scam?

As a cautious consumer, you should take certain steps to protect yourself from yo-yo financing trap. You had better get your financing before heading to the dealership. Having a pre-approved financing is a very good variant. In this case, you will know exactly how much money you will have to make on a monthly basis. Choosing the option of pre-approved financing means not giving dealers the opportunity of putting into practice yo-yo financing scam.

Reading the contract before signing it should be on your to-do list. If something is unclear to you, don’t be shy. You should ask the dealer all the questions that you have in mind. If you don’t agree with something, just leave the dealership. You can find a better deal elsewhere. Make sure that the contract doesn’t contain any condition that can let the dealer add extra charges after the sale. Attention to details is vital in this situation, as it can help you detect yo-yo financing scam.  Finally, a piece of valuable advice is that you need to avoid driving your vehicle home until your financing is approved.

In conclusion, being a well-informed car shopper is the most effective way of protecting yourself from yo-yo financing scam. However, any person may make a mistake and fall into a trap. If this happened to you, don’t lose your hope. What you need to do immediately is seeking legal assistance. Consider consulting with a good lawyer. Tell the professional about your situation in detail. You will get useful advice concerning the steps that you should take. Having a trustworthy attorney by your side is indeed important if you are the victim of auto dealer fraud. In this case, you can take a breath with ease, as he/she will guide you through this complicated process.