What are My Options in Case of Spot Delivery?

spot deliveryI received a letter from the dealership demanding that I return the vehicle because they are unable to obtain financing, what are my options? 

If you are in a situation like this then you should know that your options are not as limited as you may think. This situation occurs when a car dealer performs a “spot delivery.” Basically, you give permission to the dealer to obtain your credit report, and you and the dealer agree to terms for a vehicle that you intend to purchase. As the dealer wants to sell the car as soon as possible he will often just deliver the vehicle and “guess” at the finance rate. However if the dealer gets the rate wrong and the lender requires more down payment, a higher interest rate, and/or a shorter term loan, then the dealer contacts you to inform.

The letter sent to you by the dealer is referred to in the industry as a “10-day letter,” because a provision in the letter allows the dealer to rescind the contract within 10 days if they are unable to obtain financing on your behalf. When you receive this letter or phone call, you may be getting set up for the “yo-yo contract,” which is a type fraud where the dealer delivered the vehicle at terms that you thought were favorable but the dealer acted in bad faith.

The situation may be worse if the dealer has already sold your trade-in vehicle. Then the dealer calls to let you know that they need another $1,000 or more down in order to get you financed. Thus the dealer has already sold the vehicle you traded in and if you don’t agree to whatever the dealer offers and decide to return the car you will simply be left without transportation. Spot delivery can be difficult to prove and will most likely require professional or experienced assistance, and the worst part is that it is very inconvenient for you because of the transportation situation. Your best defense is to act quickly to get this resolved.