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The Predatory Ploys of Yo-Yo Financing Scams on Car Buyers

May 24, 2022 | Car Loans

To ensure that you’re getting good value on a reliable car, you’ll need to be a little knowledgeable about buying and selling cars. Of course, that includes knowing about scams that can be detrimental to your financial life.

Buying a new car can be stressful, and there are numerous hazards to avoid. The yo-yo finance scheme is one such trap. 

The following paragraphs will teach you what a yo-yo financing scam is and how you can avoid falling victim to one.

Spotting a Yo-Yo Financing Scam

Yo-yo financing is not only time-consuming, but it may also be stressful to your emotional health. You’re told you’re all set and can take the car home one minute; then the next minute, you’re told you have to drive back to the dealer.

For instance, a customer may be notified that their auto loan application was declined and that things must be adjusted in order for them to keep the vehicle. When a customer returns to the dealer, the auto loan they applied and approved for is renegotiated once again. It usually entails receiving a larger interest rate or monthly payment than what was originally agreed upon.

Spot deliveries are frequently considered a con, with some states having made this practice unlawful because it attracts a large number of borrowers with less-than-perfect credit. When a borrower with poor credit hears the word “approved”, they may be overjoyed at the prospect of driving a car back to their home. This makes them more susceptible to agreeing to any contract in front of them.

Unscrupulous dealers may take advantage of this enthusiasm, so be wary of an offer that appears to be too good to be true. It’s critical to recognize yo-yo financing in order to safeguard your pocketbook and your sanity.

Identifying a Spot Delivery Scam

Say you go shopping for a car, and you’re so fired up that you’re more than willing to get a car the same day. A dishonest salesman can take advantage of your enthusiasm and try to sell you a car before you’ve even signed anything. The dealer makes it appear as if the vehicle is yours, but it legally isn’t since your financing hasn’t been approved yet.

Experts advise that you keep a poker face in the showroom, no matter how excited you are about buying a new car. Many salesmen pick up on buyer cues and adjust their pitch appropriately, so keep your emotions and enthusiasm in check until the purchase is closed.

Understanding Potential Targets Of Yo-Yo Financing Scams

Anyone can be a target of this scam, but there are some people who are at a higher risk than others. If you go into a dealer with bad credit or no credit, you’ll be a good target for a yo-yo scam. These con artists will take advantage of your apparent lack of knowledge. These scammers usually target new immigrants, the extremely young and old, and some ethnicities.

Bring someone with you if you fear you might be a victim of a yo-yo scam because you belong in the groups mentioned above. In the very emotional experience of buying a car, your companions may be your voice of reason before agreeing to any contract.

Signs of a yo-yo financing scam include the car seller leaving you in the dark when it comes to your interest rate or documentation. You’re being given a ridiculously low-interest rate, but you know you won’t be able to afford it. Of course, a loan with a down payment of less than 1 percent is conceivable, but only if you have a large down payment or excellent credit.

Here are more signs:

  • The word conditional appears on the paperwork you’re about to sign.
  • Before you even sign anything, the dealer is ready to offer you the keys.
  • Many fields are left blank when you are asked to sign something.

Taking Proactive Steps If You Get Scammed

Don’t worry if you were one of the unlucky ones who drove the car away based on a conditional offer. You can finish the transaction by simply returning the car. If you put down a deposit, you’ll need a check back from the dealer when you return the keys.

You might fall in love with your new vehicle and want to keep it, but you will not enjoy your new financing arrangement. Return the vehicle, find a reputable dealer, and get pre-approved for a fair deal.

Breaking Down Possible Signs of a Yo-Yo Car Scam

Before driving the vehicle from the lot, confirm your financing rate. You have to ensure that every field on the form is completed and that you’ve read the sales contract in its entirety. Don’t forget to obtain duplicates of every document you’ve signed.

Also, don’t trade in your car until all the details are ironed out since the scammers may keep your vehicle until you agree to the new terms. Be extra prepared by obtaining pre-approval from a different lender beforehand. If any of the mentioned red flags appear, demand that the financial arrangements be properly finalized and express your dissatisfaction with the work you’re being expected to do.

If the dealer becomes obnoxious, leave immediately. After all, you can get a car from a more legitimate car salesman at any time. They can’t make you take the car if you don’t want to. 

If you have bad credit and need help from a special financing dealer, you might be able to get a subprime auto loan. A subprime lender sends a payment call to the special finance manager, indicating the maximum monthly payment you are eligible for. After that, you must select a vehicle, make a down payment, and complete all documentation before taking the vehicle. Don’t fall for any assistance offered off the books.

Because they weren’t successful in making you sign anything, you can easily cut the cord and walk away with nothing lost. The dealership or salesperson who tried this dreadful ploy would be entirely responsible for the loss. Simply leave and do not return.


You don’t have to worry if you have bad credit. You can still pre-qualify for a car loan from car dealers who have a reputation for helping people with low credit, no credit, or who have declared bankruptcy to get the vehicle they deserve. Look for car dealers who will deal with lenders and shop the market for the best rate available. Be sure they won’t leave you hanging and will work to give you the finest service possible.

Get Approved Canada is a reputable company that has been providing bad credit car loans for years. We are your Canadian loan specialists from coast to coast. Set up an appointment today for your next auto, personal, or mortgage loan!

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