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Watch out for this financing scam when you buy a car

Friday, March 1, 2019
PHILIP REED | Market Watch
Rebecca Borné

If you buy a new or used car, and a few days later the dealer tells you there’s been a problem with your financing, alarm bells should go off. You might be the victim of a “yo-yo” financing scam — so called because you’re pulled back into the dealership to renegotiate the deal at a higher interest rate and worse loan terms.

Such scams are a twist on what’s known as a “spot delivery” in which the customer drives off in a car while the dealer continues shopping for their financing. By understanding yo-yo financing and what to watch out for at the dealership, you can avoid being put on the spot — and falling prey to deceptive practices.