Beware the Yo-Yo Financing Trap: A Cautionary Tale of Car Buying Deception

Buying a new car can be an exciting experience, but it can also be fraught with unexpected challenges. One of the most frustrating situations a car buyer can face is discovering that they've been approved for financing, only to have the rug pulled out from under them later on. This practice, known as "yo-yo financing," has become a growing concern in the automotive industry, and one customer's lawsuit against a dealership that allegedly engaged in this deceptive tactic serves as a cautionary tale for all prospective car buyers.

Exposing the Yo-Yo Financing Scam: A Buyer's Nightmare Unfolds

Yo-Yo Financing: The Bait-and-Switch Tactic Explained

Yo-yo financing is a sales tactic that allows car dealers to lure customers into a purchase by initially approving them for financing, only to later revoke that approval and demand higher terms or the return of the vehicle. This practice is often viewed as deceptive by consumer protection agencies, as it can leave buyers feeling trapped and with limited options.

The Case of Gilbert Rodriguez: A Victim of Yo-Yo Financing

In September 2023, Gilbert Rodriguez, a customer in Connecticut, fell victim to this predatory practice. After completing a credit application and being told that he was approved, Rodriguez proceeded to purchase a 2018 Kia Sorento from Chevrolet of Milford. He made a ,000 down payment, assigned his 0 trade-in to the dealership, and drove off the lot with the vehicle.

The Bait-and-Switch Unravels: Dealer Denies Financing and Demands the Car Back

However, the joy of Rodriguez's new purchase was short-lived. Just ten days later, the dealership contacted him, requesting a pay stub. Nearly a week after that, they informed Rodriguez that he had been denied financing. The dealership then demanded that he return the Sorento, refusing to allow him to keep the car by offering an additional ,500 down payment.

The Aftermath: Losing Transportation and Facing Unfair Trade-In Practices

Faced with no other choice, Rodriguez complied with the dealership's demand and voluntarily returned the Sorento. But the ordeal didn't end there. The dealership had already sold Rodriguez's trade-in, leaving him without any transportation. To add insult to injury, the dealership did not compensate him for the sale of the trade-in, further compounding his financial and logistical challenges.

Dealer Disputes Allegations, but the Evidence Suggests Foul Play

In response to the lawsuit filed by Rodriguez, the dealership's lawyer claimed that the dealer disagrees with how certain aspects of the situation are being presented. However, the lawsuit alleges that the dealership may have been up to no good. According to the complaint, the dealership retook the Sorento because they couldn't find a third-party lender to approve Rodriguez, and they "did not want to be bound by the (retail installment sales) contract." The lawsuit also suggests that the dealership may have misled the DMV by submitting a false statement of withdrawal and falsely certifying that the "customer never took delivery of the vehicle."

Lessons Learned: Protecting Yourself from Yo-Yo Financing Traps

The case of Gilbert Rodriguez serves as a stark reminder for all car buyers to be vigilant and cautious when navigating the car-buying process. Even if a dealer tells you that you're approved for financing, it's crucial to verify that the approval is genuine before signing any paperwork and driving off the lot. Failing to do so can leave you in a precarious situation, facing the possibility of losing your vehicle, your trade-in, and your hard-earned money.