The process of buying a car is never easy, especially at a dealership. Once you have negotiated a price for the car, you will need to choose a financing option and you will discuss and arrange this with the F&I manager after discussing all the loan and financing options through the dealership, leasing, or paying cash.
If you choose to finance through the dealership, you will need to complete a loan application which typically requires information about your income, employment, and credit history. You then carefully review the loan terms, including the interest rate, length of the loan, and any fees or charges. You will rthen decide on the total cost of the loan and your monthly payments.
If you agree to the loan terms, you will need to sign a contract. Once, after all that, you have completed the financing process, you can take delivery of your new car. The dealership will provide you with the necessary paperwork, including the title, registration, and insurance information – and of course the keys.
So, you bought your car and you are now the happy owner of a new car with that special joy
NOT QUITE. The dealership can ‘yo-yo’ the process and take the car back.
Although it is rare, in some cases the dealership can take back the car and revoke the agreement, often called ‘yo-yo’-ing the deal.
So, you were excited. Thought you bought a nice car for you or your family. You were happy with the terms of the loan. You were just so happy, you could not stop calling your loved ones and your colleagues telling them about your new car. But that joy did not last long.
The you received a phone call from the finance manager of the dealership, informing you that the financing for the car had fallen through and if you wanted to keep the car, you have to go back and sign a contract with different terms.
Most of us would be confused if this happened to us. dealerships use a conditional sale agreement or a conditional delivery agreement, which allows the dealership to cancel the sale if the financing falls through or if the buyer does not meet certain conditions. These agreements typically include a clause that states that the sale is contingent on the dealership’s ability to secure financing or on the buyer’s ability to meet certain credit criteria.
It often asserts that if the car dealer has trouble with the financing on its end after the sale, it can later cancel the deal, try to get you to agree to different terms, and take the car back if you refuse. But how can this happen?
- When the dealership does not have a firm commitment from a lender to finance the car purchase
- When the dealership allowed the buyer to take possession of the car while the financing wasn’t finalized with contingency on a single issue that was not met by the buyers credit or down payment
- When the dealership discovers that the financing did fall through, asking the buyer to return the car and renegotiate the terms of the sale or arrange for alternative financing, because they cannot get another lender to accept to the original lending terms
It’s important to note that there are laws and regulations that govern the use of spot delivery and conditional sale agreements, and dealerships are required to disclose all terms and conditions of the sale. If you believe that a dealership has acted unlawfully or unfairly, you may want to seek legal advice or file a complaint with the appropriate regulatory agency.
It’s important to remember that there are laws and regulations that govern the use of spot delivery and conditional sale agreements, and dealerships are required to disclose all terms and conditions of the sale.Most reputable dealerships will remind you of this before walking off the showroom with the keys.
If you believe that a dealership has acted unlawfully or unfairly, you may want to seek legal advice or file a complaint with the appropriate regulatory agency.
