It happens all too often: You find a car you like, hammer out a deal, shake hands with the smiling sales rep, and head home in your new ride. A few days (or perhaps weeks) later, you get a phone call from the dealer.
"I'm really sorry, but we weren't able to get the financing approved." Or "We just need another $1,000 on your down payment." Or "There was a problem with the paperwork." Or "Turns out your credit isn't as good as you said, so we have to finance you at a higher interest rate."
This is a classic swindle called the spot delivery scam, also known as yo-yo financing.
How the spot delivery scam works
Spot delivery is most commonly used on inexperienced buyers or those with bad credit. The dealer negotiates a reasonable deal and lets you take delivery of the car "on the spot," before the financing is finalized. Some dealers will complete the deal with approved financing, and then call you anyway. The hope is that after a few days in your new car, you'll be reluctant to give it up -- even if that means paying more.
Dealers will come up with a variety of stories as to why you should give them more money. They may claim it was an innocent mistake. The sales rep might tell you that he'll be fired or that the money will come out of his paycheck. If you resist, they may turn to bullying -- threatening to report the car as stolen or accusing you of trying to swindle them.
Remember, no matter what excuse the dealer comes up with, this is nothing but a money grab. Any dealer unscrupulous enough to pull the spot delivery scam will have no problem lying to pull it off.
Next page: What to do if your dealer tries to pull the spot delivery scam
