Car Buying - Bushing Scams: "Spot Delivery" or "Yo-Yo" Sales
Consumers are often confused and angry when they receive a phone call from the car dealership where they just purchased and financed a vehicle, and the dealer informs them that they must return and sign additional documents with less favorable terms. Consumers often leave the car lot believing that the terms they just agreed to are final and that the vehicle is theirs. But many times the terms are contingent, and the dealer is still attempting to locate a finance company to finance the vehicle.
Bushing scams or “spot delivery” or “yo-yo” sales are terms used when a car dealership attempts to change the terms of the contract after more than four (4) working days of the purchase or lease of the vehicle. When a car buyer signs a contingent contract, a dealer has four working days (excluding weekends and holidays) from the time of the purchase or lease to find financing and finalize the the sale.
If the dealer cannot find the financing specified in the contract within four working days, they must inform you that they reject the contract within those four working days, thereby automatically voiding the agreement. If the dealer wishes to re-negotiate, before the end of the fourth working day the dealer must offer to return your initial payment or security (money, check, trade-in, vehicle keys, certificate of title) before attempting to negotiate a new deal with you.
When dealers violate these laws, they commit what’s called bushing. Dealerships do this when they (1) attempt to change the terms of the contract after the four working days, or (2) if they notify you within the four working-day period but fail to offer you back your initial payment or security before attempting to negotiate a new deal with you.
When this happens, the dealer will typically contact you and tell you that the deal fell through and now they need: a larger down payment; higher monthly payments; higher interest rate; or a co-signor. You are not required to accept these new terms. But dealers count on you not knowing this, and they push you to agree to their less favorable terms.
Consumers also feel trapped when a dealer informs them that their trade-in has already been sold. Dealers often sell a trade-in within 24 hours of receiving it. But you should know that you are entitled to the cash value of the trade-in, as listed in the contract, if the trade-in has been sold.
If you have fallen victim to the shady tactics of a car dealership, please give us a call to see if we can help.