You may have “financed” and purchased a car. You drive home happy. Then weeks later, the dealership calls you to tell you the financing has fallen through. They are threatening to repossess the car if you don’t sign new papers. You’ve been the victim of a yo-yo scam, also known as a spot delivery scam.
It’s a common scam that affects consumers nationwide. But how does it work, and how do you recognize it when it’s happening to you?
How Yo-Yo Scams Work
According to the Center for Responsible Lending, a spot delivery sale is any deal where the financing is not finalized until after the buyer has driven off the lot with their new car. And it affects 4.5 percent of car buyers. However, 11 percent of buyers with fair or poor credit scores experienced a yo-yo transaction.
Anne Johnson was a commercial property and casualty insurance agent for nine years. She was also licensed in health and life insurance. She went on to own an advertising agency, where she worked with businesses. She has been writing about personal finance for 10 years.
