Google Review

Be Careful! Three Practices in the Sale of Used Cars you need to Know About

Purchasing a car can be a stressful event. Not only is it normally a large expenditure but it also can involve pressure tactics and the filling out of paperwork you’re unfamiliar with. It’s important to know your rights and to protect your interests when spending so much money. The following are three common practices in the world of used car sales you should know about going in.

Number One: Spot Delivery. This happens when the dealer allows a customer to drive off the lot with the car – “on the spot” – while the agreement is not technically finalized. In some cases, the dealer and the buyer enter into a sales agreement conditioned on some other type of action like securing financing from a third party.

Number Two: Conditional Sales Agreements. Typically in this type of agreement, there is an action that the consumer must take to complete the deal, like arranging financing to purchase the car from a source other than the dealer. In the conditional sales agreement, the buyer knows that he or she is expected to secure financing elsewhere.

Number Three: The Yo-Yo Scam. In a typical yo-yo deal, the dealer cancels the original deal after a few days (or weeks in some cases) and forces the consumer to return to the dealership with the newly purchased car. Often, the dealer states that “the lender” has changed its mind and will not finance the loan at the rate or with other terms promised. When a dealer can unilaterally cancel a transaction, the dealer can offer the consumer any interest rate, even low teaser rates they knowingly may not be willing or able to honor, and do so without any significant risk. Any risk in a yo-yo transaction is instead borne by the consumer

Another common issue is that the dealer may refuse to return the consumer’s trade-in vehicle or the consumer’s down payment. The dealer may also threaten to charge the consumer fees for mileage put on the car, wear and tear, or other items. In some cases, the dealer may threaten to call law enforcement on charges of auto theft if the consumer does not return the vehicle immediately.

What this Means for You

While the practices outlined above aren’t automatically illegal, they can be. If you feel you’ve been wronged in the purchase of a used vehicle, call Widerman Malek Celebration Law Office for a free Consultation.







** The information for this article was obtained through our experiences with these matters and via the FTC website and specifically Deal or No Deal: How Yo-Yo Scams Rig the Game against Car Buyers, an article written by Delvin Davis

Search Widerman Malek


  • Blog (46)
  • Business (16)
  • Careers at WM (1)
  • Event (4)
  • Local Stories (46)
  • Press Release (2)
  • Real Estate Investors (13)
  • Resources (10)
  • Small Business Law (2)
  • Uncategorized (36)
  • Video (2)