Having financing in line before hitting the car lots to shop for a vehicle is always a plus. It may save customers time and hassle at the dealership, and it can also protect them from becoming victims of financing fraud. One of the most notorious types of dealer fraud is the spot delivery scam.
Victims of spot delivery scams often have bad credit and may feel excited when a dealer implies they are approved for a loan for a vehicle they really want. They may sign papers which include the clause, “subject to loan approval,” especially if the dealer suggests to the buyers that this will be no problem. However, especially in this age of lightning-fast information, consumers can be certain that the dealer already knows their credit scores and knows they will not qualify for the loan.
Emotions take over
With keys in hand, the consumers take delivery of their new vehicle on the spot and drive home believing the deal is done. They may show off the vehicle to friends and family, begin to feel comfortable behind the wheel and hang their baby booties on the mirror. After a week or two, the dealer contacts them to say the financing did not go through and that they must come up with more money for a downpayment and sign for a new loan with a much higher interest rate. In some cases, the dealer may threaten to report the car stolen if the customers do not comply.
To save the embarrassment of returning the vehicle, many consumers will scrape up the money and sign for a loan they cannot afford. However, the spot delivery scam is illegal, and consumers have rights when they face such unscrupulous car dealers. They do not have to fight these unfair practices without skilled legal counsel.