Yo-yo car dealer financing

[BeEmVe]

I have never financed a vehicle through a dealer and never will. But I know many people do as such I thought this NPR article is worth a read.

https://www.npr.org/2023/02/04/11529...o-yo-car-sales

[Donatello.]

Aaaaaand get a lawyer when they do that. They will stop real quick

[chris719]

Originally Posted by Donatello.

Aaaaaand get a lawyer when they do that. They will stop real quick

They do it to people who can't afford lawyers or have low probability of getting one.

This is one of the many reasons why I can't believe people argue in favor of dealerships in some other threads.

Sad thing is, this isn't new, the spot delivery scam is decades old at this point.

[grannyknot]

One of the many reasons I have never purchased a new car.
Only buy good used cars from private individuals and pay for in cash after it has been checked over thoroughly.
Bloody scammers are everywhere now.

[RM7]

Originally Posted by grannyknot

One of the many reasons I have never purchased a new car.
Only buy good used cars from private individuals and pay for in cash after it has been checked over thoroughly.
Bloody scammers are everywhere now.

Well yeah…but they were always at dealers…

[nerdogray]

That's so blatantly predatory... and on people that can't easily defend themselves. It boggles my mind how these kinds of things can continue to exist, especially even after the publicity. Is it all the lobbying or what?

[chris719]

Originally Posted by Efthreeoh

Why didn't she just go to a credit union and get a pre-approved auto loan? Or use the bank where their retirement savings are? Or just ask someone who knows about financing to go with them to the dealership?

Talk about victim blaming. Not everyone is an expert in financing or of even average intelligence. The way this is practiced it is a scam. Not legal in several states. People should be able to go buy a car without having to worry about whether their Hyundai dealership is going to pull a bait and switch on them.

[chris719]

Originally Posted by nerdogray

That's so blatantly predatory... and on people that can't easily defend themselves. It boggles my mind how these kinds of things can continue to exist, especially even after the publicity. Is it all the lobbying or what?

Not that I'd be in the situation for this to be tried on me, but if it were, I would totally crash the car as soon as I got that phone call telling me to come back. The dealership would be on the hook. I read that in this scenario, an insurance provider is not obligated to pay the claim. It’s not until the transaction is fully funded by the bank that the insurance kicks in.

[chris719]

Originally Posted by Efthreeoh

I guess my last sentence was misread. It's tough world, preparation is key. Contra proferentem. Easy to defend against.

Nah, you're just defending a scam. You seem like a cruel person.

[chris719]

Originally Posted by Efthreeoh

I think the easiest way to solve this situation is sign the sales contract then let the car sit for a few days until the credit is definitized.

Maybe you don't get it? They are doing this on purpose to make sure you can't go buy a car somewhere else and also force you into accepting a high and marked up interest rate.

[chris719]

Originally Posted by Efthreeoh

No. I'm just a realist. Life is not full of rose pedals and rainbows.

So, dealers should be allowed to scam vulnerable people just because life isn't full of rainbows? Wow, you are a terrible person. This is 100% anticipatory theft in many cases.

[chad86tsi]

I had a dealer try a yo-yo on me, but I think it wasn’t predation, but rather over optimistic financing. They called a week after the sale to say they wanted another $2500 down, so I asked “when can I come in to return it?” Just straight up dead-pan called their bluff. They said my trade was already gone (which I doubt), but I thanked them for buying for so much. A little back and fourth on the phone I told them I only live 2 miles away, it’s no trouble to drop it off and unwind the deal, and I had a company vehicle to drive in the mean time. He said he’d call me back. 2 days later he offered if I paid 1250 more down, they would increase my trade value 1250 to make the bank happy. I told them no problem, and promptly paid.

It’s not always predatory, and it doesn’t have to harm you financially. I came out ahead 1250, but you have to be willing to unwind the deal. I was happy to let them keep my trade at the negotiated price too, I was profiting as it was, so even if I lost both vehicles, I was positive on money.

Be willing to walk away, have alternative transportation options, and don’t negotiate with negative equity.

[chris719]

Originally Posted by chad86tsi

I had a dealer try a yo-yo on me, but I think it wasn’t predation, but rather over optimistic financing. They called a week after the sale to say they wanted another $2500 down, so I asked “when can I come in to return it?” Just straight up dead-pan called their bluff. They said my trade was already gone (which I doubt), but I thanked them for buying for so much. A little back and fourth on the phone I told them I only live 2 miles away, it’s no trouble to drop it off and unwind the deal, and I had a company vehicle to drive in the mean time. He said he’d call me back. 2 days later he offered if I paid 1250 more down, they would increase my trade value 1250 to make the bank happy. I told them no problem, and promptly paid.

It’s not always predatory, and it doesn’t have to harm you financially. I came out ahead 1250, but you have to be willing to unwind the deal. I was happy to let them keep my trade at the negotiated price too, I was profiting as it was, so even if I lost both vehicles, I was positive on money.

Be willing to walk away, have alternative transportation options, and don’t negotiate with negative equity.

The issue isn't in the rare case when it's innocent optimistic financing. Now, with the software they have they should know within minutes or hours at the most.

The issue is these shady dealers are finding easy marks they KNOW will have trouble getting financing at the rates they promised. These are people that don't usually have an extra car or the ability to fight.

[chris719]

Originally Posted by Efthreeoh

People install locks and alarms on their homes to deter or prevent theft. People lock their cars to deter and prevent theft. Students put locks on their school locker and gym locker to prevent theft. Generally, people go swimming AFTER they have learned how to swim.

What is the difference in educating oneself on automobile financing (bet one can find all sorts of information about automobile financing on the internet) or taking an advisory* with you to negotiate and walk you through the financing and purchase contract before you go buy an automobile so that you don't get taken advantage of? It's called preparedness. It's just a fact of life.

* I've done it twice for people.

What a bad take and worse analogies. Hope you never get taken advantage of at any point in your life, but I guess it'll be 100% your fault if you do.

The fact that this is illegal or limited in many states tells you all you need to know.

[NickyC]

Having to sign a new "deal" was infuriating enough to read, but then this: "Documents from a later arbitration case show that the dealership wouldn't return their calls. And it didn't pay off the loan on their trade-in vehicle. So the Johnsons were stuck paying the loan, with no car, for nearly a year. They eventually used a chunk of their small retirement savings to pay the loan back."

I'm not sure I'd be able to stop myself from burning the place down at that point. That is some outrageous shit.

This is why so many good, hardworking honest folks get absolutely screwed in this life. They don't have a dishonest bone in their bodies, so when they come around complete degenerate sociopaths like those at that dealership, they're completely incapable of knowing how to handle it.

Makes me sick, I hope those people are made whole and that dealership loses a ton of business over this.

[chris719]

Originally Posted by Efthreeoh

Exactly, if I went into a transaction without first educating myself on the subject matter, I would blame myself for being taken advantage of. I don't see why that is a difficult concept to understand. Why is it difficult to accept that a person is responsible for himself?

The fact that you don't see the problem here is truly mindblowing.

[NickyC]

Originally Posted by Efthreeoh

Exactly, if I went into a transaction without first educating myself on the subject matter, I would blame myself for being taken advantage of. I don't see why that is a difficult concept to understand. Why is it difficult to accept that a person is responsible for himself?

We all have a duty to be as informed as possible, but c'mon now. Me being uninformed does not give others the right to be complete thieving assholes and to take advantage of my ignorance on the subject. With my legal career, people come to me in seek of help, often times with little knowledge of the law. Am I supposed to screw them over just because I can? Should I bill more hours for work that takes little time just because I know they have no concept of how long said work takes?

Of course not, that would make me a degenerate worthless POS. It's no different in any industry, and in fact those who are in the know and are well versed in their field have an absolute duty to treat all people fairly and explain the ins/outs of the industry as well so they can to put people at ease. When people are paying you for a service, you have an absolute duty to give them what they paid for.

Whoever is responsible for putting the people in that story through this saga are complete garbage human beings. Even if they didn't mean to do it initially, the fact they didn't go completely out of their way to make things right shows just how shitty they are.

[NickyC]

Originally Posted by Efthreeoh

Where did I say the dealership was in the right and virtuous people? I didn't. All I said was the couple who are the subject of the story should have been more informed on the subject of financing, OR if they felt they were not up to the task of getting familiar with financing, they should have found someone in their personal circle they trust to help them through the process. Or they should have gone to a credit union or a bank.

Not all people we deal with in our lives have a conscious. That's just the way life is.

I surely could have read what you wrote wrong, but to me it sort of smacked of "well they were stupid so deserved to be taken advantage of". I certainly advocate for people to be as educated as much as possible in regards to big purchases, but these folks were treated so badly there just has to be a human element were you feel empathy for them.

[chris719]

Originally Posted by Efthreeoh

I never said they were stupid, I suggested they should have been better informed of the car buying process and financing (their responsibility), OR gotten someone who is informed to act in their stead (also their responsibility).

Or we could just limit a predatory practice that in reality will cause virtually no lost sales to the dealership. Why should you have to do hours of research to avoid getting fucked because some slimy F&I guy and lenders want to extract more money from people who already have bad credit.

[chris719]

Originally Posted by Efthreeoh

Because that is what happens in life; people try to screw you. It's an individual's responsibility to be best prepared for it. It's not like I haven't been clear on that point.

Yeah, it's a really terrible point. You have an extremely warped perspective.

[chad86tsi]

Originally Posted by chris719

The fact that you don't see the problem here is truly mindblowing.

It seems like you are saying it should be illegal to rob people at gunpoint, and he's saying one shouldn't walk down a dark ally in a bad neighborhood at night with cash falling out of your pocket.

in the first case, it's already illegal, and in the second, there is a lesson to learn from this story, and there are straightforward attainable methods to reduce risk.

It's not a lack of understanding, it's taking that understanding one step further and addressing it with prevention.

[chad86tsi]

Originally Posted by chris719

The issue isn't in the rare case when it's innocent optimistic financing. Now, with the software they have they should know within minutes or hours at the most.

The issue is these shady dealers are finding easy marks they KNOW will have trouble getting financing at the rates they promised. These are people that don't usually have an extra car or the ability to fight.

Even with software, an underwriter can override any deal they don't feel good about. I had it happen 4 years ago with a mortgage, they kept asking for more papers, and them more, and then more. Closing was late because of that underwriter. We were overqualified and had plenty of cash down. Even a good deal can fall through.

Everybody knows there are shady lenders, doing business with them is a choice. If that becomes your only choice, time to revisit your plans to ned their services. At the first sign of this nonsense they should have walked away and sought legal remedy for the trade-in. Seems they didn't ask the right questions or contact the right people. How did that dealer dispose of their trade in with no title? A lender won't release that without a payoff. Elements of that story are lacking basic logic.