Re: Yo-yo scam exploits credit-cha
llenged car buyers
04-13-2012 11:42 AM
Imagine this: You buy a car, sign all the paperwork and drive home. A few days or weeks later, you’re contacted by the dealer and told the financing has fallen through and you need to bring back the car or pay more money.
Mod Cut of Ludlow, Ky., doesn’t have to imagine what it’s like to be the victim of a “yo-yo” finance scam. Three weeks after she bought her car, the salesman called and said she couldn’t afford it and needed to bring it back.
If the dealer can’t sell the contract for the price they expected, Ingalsbe explains, they tell the buyer the financing fell through and demand a bigger down payment, a higher interest rate or both. In some cases, they want to cancel the deal and demand the vehicle back.
The yo-yo scam is really bait-and-switch on the financing. According to new research from the Center for Responsible Lending (CRL):
How to figure out such schemes, sinc eI would be in market in few months for new car. The reason for this is I have witnessed this and I was with my friend in the whole car buying process.
My friend had same problem where they dealership gave great price for his 96 corolla and he signed all the paper work and drove away the new car. Everything was OK for 2 weeks and than same thing happened. He got it cosigned with his cousin but still the APR as 2% higher than initial offer.
EX FICO (8/2012): 748
EX FICO (6/2010): 739