Yo-yo financing is a widespread trick that scammers use to trap car buyers. Unfortunately, an increased number of people fall victims of this car scam. Sadly, this happens because a lot of car owners don’t have sufficient knowledge about this fraud. Thus, this makes them really vulnerable. It is especially typical of first-time car buyers. They easily appear in this “perfect” trap and their seemingly flawless vehicle turns into the worst nightmare. Continue reading this article and we’ll help you get familiar with Yo-yo financing car scam.
How yo-yo financing car scam works
Here is a typical scenario of yo-yo financing car scam.
You have completed the negotiation process successfully. Although your financing isn’t approved, you are so excited about your new vehicle that decided to drive it home. Actually, you enjoy driving your new vehicle for a few days and show it proudly to everyone. But your joy turns into a disappointment when you receive a call from the dealership. The car dealer “kindly” informs you that there is a serious problem with your paperwork. Because of your bad credit, your financing is canceled. You appear in a depressed situation and head to the dealership immediately.
At this point, a “helpful” car dealer tries to comfort you and offers the best solution to this problem. Of course, “the wisest solution” that the dealer suggests is agreeing to a new contract with higher interest rates. Since you have driven the vehicle for some time, you have already attached to it. Furthermore, these unethical car dealers are also great manipulators and may take advantage of your frustration. So, you agree to spend a huge sum of money, but continue being the owner of this vehicle.
Avoiding a yo-yo car scam
In order to prevent yo-yo financing car scam, you should take certain steps. To begin with, auto fraud experts advise buyers to explore all the documents in detail prior to buying the vehicle. In addition to that, avoid driving a car home, if you haven’t completed the financial part yet. Finally, consider arranging your financing beforehand. You should have all the necessary information concerning your credit history. It is also a good idea to fax a copy of the contract to your attorney for review.
Warning signs of yo-yo financing scam
Take a look at the signs of yo-yo financing car:
- A car dealer gives you the opportunity of driving your vehicle home while the financing is not approved. It is a serious cause for concern.
- The dealer convinces you to sign the contract, which is not completely filled out.
- You ask the car dealer to provide you with the copy of the contract but get a negative answer. So, why does the dealer refuse to give you the copy? Well, it means that something is obviously wrong with the contract.
- It is mentioned in the contract that a car buyer must either return the vehicle or pay more money, in case the financing isn’t approved.
What steps should I take if I have become a victim of yo-yo car scam?
First of all, you shouldn’t panic and fall into despair. Luckily, you can rely on the protection under your state’s lemon law and federal lemon law. In fact, lemon laws vary from state to state. You need to conduct a research to explore the requirements of your state’s lemon law. That is to say, you may get a full refund.
Contact a trustworthy attorney
If you suspect that you are the victim of the car dealer’s deceitful practices, contact a reliable lawyer immediately. At this point, it is vital to seek legal assistance. A knowledgeable professional will explore your case in detail, as well as make you familiar with your state’s laws. You had better choose a lawyer who has a large experience in handling similar cases. Ask your family, friends or acquaintances with the same experience for credentials. You should keep in mind that the choice of an attorney is of great importance. Hire a professional who can fight for your rights and help you get a full compensation.
You shouldn’t give the dealer the vehicle’s keys until you get the full refund
Inform the car dealer that you are going to keep the keys until you have a full refund. You should have a proof that the money is transferred to your credit card. It is a good idea to call the bank to be on the safe side. In case the dealer mentions that they need time for processing the refund, insist on having the keys. Did the dealership give you the check? In this case, make it cash and only after this return the vehicle.
Make it clear that you will only agree to a full refund
Here are some tactics that the dealer may use to cheat you. First, they point out that they won’t be able to refund the sales tax. The second variant is assuring you that they have the right to demand restocking fee. Finally, the dealership may convince you to pay for the miles that you put on the vehicle. Don’t believe them. All this is illegal. You have the right to demand a full refund, so you should demonstrate a strong determination and stick to it.
In conclusion, to avoid such experiences, consider purchasing a car from a reputable dealership. Avoid dealing with an unknown dealer who is offering “fairy tale” deals. These deals are usually too good to be true.