The “yo-yo” or “spot-delivery” sale typically proceeds in the following way:
The consumer negotiates and believes a vehicle’s installment contract or sale is final, and the dealer gives the consumer possession of the car “on the spot.” The dealer leads a consumer to believe that all the conditions necessary for the proper sale of the vehicle have been met by the consumer and that the vehicle has, in fact, been sold on credit issued by the dealer.
Usually, the purchasers and dealer have executed all the necessary documents to complete the transaction, including buyer’s order, retail installment contract, Truth In Lending Disclosures, application for title, and odometer disclosures.
The dealer later tells the consumer to return the car because the financing (which the consumer understood and had been led to believe was approved) had fallen through. If the consumer does not return the vehicle or agree to rewrite the transaction on less favorable terms, the dealer repossesses the vehicle.
Often, the dealer has already sold the trade-in vehicle. This leaves the consumer in the disadvantageous position of not having any transportation unless he or she agrees to the less favorable terms. Also, the dealer will rely on the customer’s attachment to the car and the fact that he or she has already shown it off to others. These factors combine to pressure the customer into signing the less favorable deal.
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