No financing? Watch out for the Yo-Yo!

There's this thing that shady car dealer's like to do - it's called the Yo-Yo scam.  A dealer sells you a car but then calls you back for one reason or another and asks for more money or to sign a new contract or to return the car.  At this point, you have become attached to the car and feel like you have no other choice but to do what the dealer wants.  

The dealer never cut the string between you. He releases you from his lot only to snap you right back before you get too far away. Yo-Yo.

---

Just yesterday I met with a nice couple who bought a used car and the dealer told them they were financed, but they weren't. After two weeks, the dealer called and said he needed another $1,500 to get them financed.   They asked the dealer to take the car back, but surprise, the dealer said he couldn't. (This is a big fat lie.)

They were upset and shocked, but felt trapped.  They paid the extra money only to find out the dealer was never able to get them financed (and maybe never even tried).  The money just slipped right into the dealer's pocket. ​

After two months without financing, the dealer finally asked for the car back, but said they would have to get their down payment from the lender.  What???  There is no lender! (Another big fat lie.)

The whole point of this yo-yo scam was to take the buyer's down payment and as much money after that as possible, and then take the car back and keep their money.  I've seen dealer's run this scam with the same car over and over again, stealing money from hard working people without a thought as to the hardship they are causing.

The best way to avoid this type of scam is to know your rights.

1. If the dealer calls you after the sale and wants something more, you have the right to say no.
2. If the dealer wants you to sign a new contract, you have the right to say no.
3. If the dealer withholds your car registration or title until you pay more money, you have the right to say no.
4. If the dealer can't get you financing and takes the car back, he is required to give you all of your money back.

If you are a victim of a yo-yo scam, I encourage you to report the dealer to your local DMV Investigations Unit. They will investigate the dealer and have the authority to put them out of business if they repeatedly violate the law.  They can encourage the dealer to pay you back.  If the dealer doesn't, then contact an auto sales fraud or lemon law attorney for help.

---