Buying a new car may give you a tinge of excitement — as well as some trepidation.
On the one hand, it’s fun to get behind the wheel of your dream vehicle and enjoy that new-car smell. On the other hand, no one wants to haggle for ridiculously long hours over price or deal with overbearing, pushy car salespeople.
Now there’s another wrinkle to consider if you’re in the market for a new set of wheels.
Actually, it’s not just a wrinkle but an outright scam, one that consumer protection agencies say most commonly affects women, African Americans and those with poor credit ratings.
This fraud is known as the “yo-yo scam.” It’s perpetrated by unscrupulous car dealers that sell you a car — and let you drive off the lot with it — only to pull you back in like a yo-yo, by contacting you days or weeks later to try to squeeze more money out of you.
In such a scenario, the dealer insists that you return the vehicle to the dealership by stating that your application for credit wasn’t approved after all or that you need to pay a higher rate.
This fraud is known as the 'yo-yo scam.' It’s perpetrated by unscrupulous car dealers that sell you a car — and let you drive off the lot with it — only to pull you back in like a yo-yo, by contacting you days or weeks later to try to squeeze more money out of you.
Basically, the yo-yo scam occurs when you sign a contract, and the dealer fraudulently makes it seem like the transaction is a done deal. But in reality, the dealer has created a situation where, due to fine print and questionable tactics, it can cancel the deal, seize possession of the car and even sell it to someone else.
All across the country, people are dealing with this scam. Many car buyers get called back into the dealer’s lot during a yo-yo scam and told that they have to pay a much heftier interest rate or put more money down in order to keep their cars.
Since many folks have no other financing options and desperately need their vehicles, they cave in to this high-pressure sales tactic and sign new contracts with onerous financial terms.
In one recent case, authorities say a man in Oregon bought a car from a dealer, signed a credit contract and drove the vehicle home the same day, thinking he had purchased it. But two weeks later, the dealer called and said his loan wasn’t approved. The man returned and signed a new contract. Then, a month later, the dealer called again, claiming the financing fell through and insisting the man return the car. But the dealer refused to refund his down payment.
The dealer has created a situation where, due to fine print and questionable tactics, it can cancel the deal, seize possession of the car and even sell it to someone else.