Car Dealer Repossession
Was your car repossessed by the dealer?
Spot Delivery and Yo-Yo Scams
A “Yo-Yo” sale occurs when a dealer sells a car to a consumer under an installment sale contract but later demands that the consumer return the vehicle because the dealer claims that financing fell through. In some extreme cases, the dealer will reclaim the vehicle using repossession, threat of arrest or tricking the consumer into returning the vehicle to the dealer. When the dealer is ready, they yank the consumer back to the dealership like a "yo-yo" at the end of a string.
Once the dealer has retaken the vehicle, the consumer is left in a vulnerable position with no car, no money for a down payment, and no trade in vehicle. The dealer takes advantage of this compromised position – one of the dealer's own making – to pressure the consumer into a new agreement. That new agreement might include less favorable terms, a vehicle of lesser value, or requiring a cosigner. If the dealer cannot secure the terms they demand, it simply cancels the consumer's deal without returning the client's down payment or trade in.
No matter what the dealer chooses to demand or provide to the consumer, the dealership treats its binding contractual obligations with the consumer as conditional, hinging upon the dealer's ability to resell the fully-executed installment contract it has with the consumer on terms that the dealer – in its own discretion – deems to be acceptable to it alone. At the time of the sale, the dealer knows that it intends to retake the vehicle if the dealer cannot sell the installment contract for the dealer's desired price but withholds this information from the consumer and does not make disclosures appropriate to conditional terms of credit.
Consistent with this view of the conditional nature of the sale, dealers treat re-takings of these vehicles as falling within the dealers' legal rights because they do not view the sale as complete or binding until the dealer has successfully sold the installment contract to a finance company -- even though the statutorily required disclosures provide no such information to consumers. For purposes of these fraudulent transactions, dealers effectively represent to consumers that these deals are complete at the time of the transaction, provided the vehicle, all necessary paperwork, and all the trappings of ownership.
The State of Michigan deems vehicle transactions to be complete upon delivery of the vehicle and execution of the sale documents. The State of Michigan also views “Yo-Yo” sales or “Spot Deliveries” as an illegal practice, having promulgated a number of opinion letters, manuals and warnings.
Have You Been a Spot Delivery or "Yo-Yo" scam victim?
If you think you have been a victim of a spot delivery or "yo-yo" scam, call us today for a free consultation. There's no fee unless we can get a recovery for you.
Call today, (248) 208-8864