What is Yo-Yo Financing?

Posted: Wednesday, March 28th, 2018

When a dealer approves a customer for a car loan and they drive it off the lot, you might think the deal is done. However, if the dealer contacts the customer days later and says they don’t meet the loan requirements, that’s known as yo-yo financing. The buyer will then be forced to pay a higher interest rate in order to keep the car. Find out more about yo-yo financing and how you can avoid getting scammed.

How to Avoid “Spot Delivery” Scams

If you’re in the market for a new or used car, you’ll want to take these steps to make sure you don’t end up with yo-yo financing:

  • Ask if the dealership allows for “spot delivery.” This practice lets customers take a car home before they’re actually approved for financing. It sounds convenient, but if your financing isn’t approved, you’ll need to take the car back or pay a higher interest rate. This then results in a yo-yo financing situation.
  • If you have a credit score that’s below 680, get pre-approved from a financing provider like Green Light Auto Credit. It lets you head to the dealership with a clear idea of your car-buying budget.
  • Check your state’s rules and regulations regarding car loans. That way you know your rights before you begin the buying process.

Turn to Green Light Auto Credit for Financing

At Green Light Auto Credit, we work with a wide variety of lenders to get you the best interest rate possible, and we don’t stoop to the kind of underhanded loan tactics that other financing providers do. Contact us to learn how you can avoid getting scammed on auto loans.