Friday, December 9, 2011
The Spot Delivery Scam
The Spot Delivery Scam
Who's involved? - New and Used Dealerships
What is it? - The Spot Delivery Scam is a clever bait and switch style tactic involving either used or new dealers. The idea is for a preliminary deal between you and the dealer to be put into motion based on "on the spot approval" regarding your financing. The way it works is that they entice you to take the vehicle home with you based on the idea that the deal is done, it only needs to be processed the next day. Why they do this is to tie you to the car. By taking in home, you are considerably less likely to renege on your agreement, even after the original arrangement has been altered by the dealer. Even if you do want to kill the deal, you'll be roped into legal trouble because the car is in your possession and has been driven by you.
It works in a number of ways. They will talk you into a sale, or comfort you into trusting them, but before you can get the financing or before a finalized deal can be in place, they will attempt to get you to sign incomplete or blank documents, promising to have their financial consultant handle the paper work first thing the following morning. The dealer will wait you out a few days, dulling your awareness to the switch and then call claiming the initial deal could not be reached. Now you're liable for a larger down payment or a higher monthly rate and can do very little to simply return the car and walk away. After all, you've driven the product and made it used in the process.
How to avoid? - Avoiding this type of fraud tactic is easy; never, ever sign anything until financing has been officially approved. Also, never drive a car off the lot unless all the documents are in order. Dealers can't pull off the switch if you haven't taken the product off the lot. If they say something about how they're financing firm or department is closed, that should be a tip-off to get up and come back in the morning. It's easier to wait until a deal is in order and approved than to pay more later. Still, we suggest being pre-approved for financing from a trusted source before you ever enter a dealership. If the dealership can beat your pre-approved arrangement, then you can consider switching over.
Terms & Trigger words to avoid? - "Right of recession"; this is a term taken from a contract that if you sign, you agree to allow the dealer to change the conditions of the contract without consulting you. You should never sign something with these words in it. EVER!
Tyler Baker; One Stop Motors Writer