Do not take a car until the loan is final


  • On-site car deliveries should be approached with caution
  • Dealers say yo-yo financing is scarce% 2C but consumer advocates disagree
  • Getting financing quotes before buying a car can help

It might seem like a big plus: driving your new or new car to your home while a dealership works out the financing.

But that can turn out to be a bad idea.

This is because the terms of the loan agreement discussed at the dealership may change for a much higher rate after a buyer brings a car home. Unscrupulous dealers may try to bring buyers back one or more times to sign new, more expensive offers – a practice known as “yo-yo financing”.

Pushed by state attorneys general and consumer groups, the Federal Trade Commission is considering proposing new regulations to combat the practice.

The National Automobile Dealers Association said in a statement that it is important for regulators to distinguish between “fraudulent yo-yo financing” and what it calls “legitimate conditional sales or on-time deliveries.”


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