One of the worst things that can happen when buying a new car is finding out that you are not really approved Some car buyers are catching on to the deceptive sales tactics and fighting back, like one customer who is suing the dealership that duped him with “yo-yo financing.”
Before we dive into what happened, let’s take a quick look at yo-yo finance, we mentioned before. Basically, it’s when a dealership lets you put down a deposit, sign for it, and walk away with a car even though you haven’t actually been officially approved for a loan. That disapproval is often not made known to the customer. Then, a short time later, this happens:
But about a week later, the dealer calls you and says you haven’t actually been approved. Depending on the dealer, one of two things will happen: they’ll tell you to bring the car back and they’ll refund your deposit, or they’ll say you need to agree to higher financing terms. Either way, things are bad—you’ll either be left without a car or paying significantly more than you originally agreed to.
Each state has a different grace period for when dealers are required to notify customers of their denial. FTC watch practice as a scam. That brings us to Gilbert Rodriguez’s situation. In September 2023, Rodriguez went to Chevrolet of Milford in Connecticut and purchased a 2018 Kia Sorento, as Car News report:
According to the May 1 complaint, Rodriguez completed a credit application, was notified that it was approved, signed a purchase agreement, paid $2,000 down, transferred ownership of the vehicle in exchange for $500 to the dealership, and was given the Sorento.
Ten days later, Milford contacted Rodriguez to request pay stubs, which he provided. Almost a week later The dealer told Rodriguez he was turned down. Rodriguez tried to keep the car by saying he would pay an additional $1,500 on top of his initial down payment, but Milford said no, that he needed to bring the Sorento back. So Rodriguez voluntarily bought it back, and the dealer refunded his initial payment. Things got worse when he traded in the car: Milford sold it, which left Rodriguez “without transportation,” according to the complaint, and Milford did not compensate him for selling the trade-in.
In a statement to Car news, Milford’s attorney said the dealership didn’t agree with the way certain things were presented, because of course they wouldn’t. Perhaps it was because Milford might not have done anything right. According to the lawsuit, Milford took back the Sorento because they couldn’t find a third-party lender that would approve Rodriguez and the dealership “did not want to be bound by the (retail installment sale) contract.” The dealership may have also misled the DMV in the process, according to AN:
Additionally, in order to resell the Sorento with proper documentation, the lawsuit says the dealership “filed a fraudulent withdrawal statement” with the state Department of Motor Vehicles and “falsely certified that ‘the customer never took delivery of the vehicle.
So remember, if an agent says you’re approved, make sure you check to see if you’re Actually Get approved before you leave with that car.
