This is an excerpt from a very good article on the CNN Money website, dated 1-15-04. It is in regards to financing problems after you have taken the vehicle.
http://money.cnn.com/2004/01/14/pf/autos/yoyo/index.htm


NEW YORK (CNN/Money) - You've got your new car. You showed it off to all your friends. You've driven it to work a few a times. You love it. Then you get a scary phone call.


"This is Jim from the dealership. There seems to be a problem with the financing."

You may find yourself looking at a higher interest rate than you originally agreed to, or facing pressure to buy additional insurance products.

If you take a car off the dealer's lot before financing's been approved by the lender, you could get that very disturbing call. If you do, be careful. There's a good chance you're being set up for a scam.

Taking a car immediately after negotiating a deal, but before final approval of financing arrangements, is called "spot delivery." Getting called back in because of an alleged financing issue is commonly called a "yo-yo sales" tactic.

Essentially, the dealer is getting a second shot at negotiating a deal that you thought was already settled.


If you find yourself in this situation, you shouldn't just go in and renegotiate the deal. First, find out what the options are and be aware that this may simply be a ploy to get you to give up more money.

Re-read your copies of any papers you signed to see what, if anything, your agreement says will happen if the financing falls through.

If there is no such clear-cut agreement, contact the office of your state's attorney general to find out what your rights are. Consumer protection laws vary from state to state.

Either way, be prepared to return the car back to the dealer. The dealer may not mention that you could do that or may even say that, since you've driven the car, you can't give it back.


Being prepared to walk away from the car at least puts you back on an even footing for negotiating a new deal. You may not even want to negotiate a new deal, though.


In many cases, expertsthe dealer's lot before financing's been approved by the lender, you could get that very disturbing call. If you do, be careful. There's a good chance you're being set up for a scam.

Taking a car immediately after negotiating a deal, but before final approval of financing arrangements, is called "spot delivery." Getting called back in because of an alleged financing issue is commonly called a "yo-yo sales" tactic.

Essentially, the dealer is getting a second shot at negotiating a deal that you thought was already settled.


If you find yourself in this situation, you shouldn't just go in and renegotiate the deal. First, find out what the options are and be aware that this may simply be a ploy to get you to give up more money.

Re-read your copies of any papers you signed to see what, if anything, your agreement says will happen if the financing falls through.

If there is no such clear-cut agreement, contact the office of your state's attorney general to find out what your rights are. Consumer protection laws vary from state to state.

Either way, be prepared to return the car back to the dealer. The dealer may not mention that you could do that or may even say that, since you've driven the car, you can't give it back.


Being prepared to walk away from the car at least puts you back on an even footing for negotiating a new deal. You may not even want to negotiate a new deal, though.


In many cases, experts say, a dealership may simply be taking a second shot at pressuring you into a better deal for them. In reality, the deal may never have been submitted for approval.


"Sometimes the dealer doesn't get the profit they should by their own mistake," said Phil Althouse, a Cleveland attorney who mostly handles consumer fraud cases. "So, they'll make up something and say, 'Hey it wasn't approved.'"

If you get called back in because of an alleged financing problem, ask the dealer for the name, telephone number and address of the lending institution that rejected the financing and the name of someone there that you can talk to there. If your financing was actually rejected, you have a right to speak to the financing company about it.

Avoiding the yo-yo
There are several things you can do to make sure you don't get into a situation like this. For starters, never drive a car off the lot without approved financing. If you can't get immediate financing for any reason, just wait until the financing is approved. Better yet, arrange your own financing before going the dealership.

 

Screwbigred,

Can you please edit what you posted? It looks like when you cut/pasted this article, you overlapped, and repeated several parts.....Kinda hard to follow the article.....

thanks, Dave

 

It has to do with something not working right on this site. I have had some post do the same thing. It seems to be if you post over a certain amount of words it gets really weird, even if you try to edit it, it does not help.

Best thing to do with a large post like that is to post a few sections…

 

Yeh it just did it to me.Then it would not allow me to edit it.
When i replied to this thread the first time it thought i wanted to start a new thread.O well

Mike

 

Just click on the link an read it on Money line

 

good article, thanks for posting it. while this did not happen to me, it is always good info to have.

 

Thanks for the post...this is happening to me right now so it's very much real...I was called back in because Ford turned down my financing...I have the truck but I have to come back in for a new deal...totally sucks...anyone out there with advice?

 

The article doesn't address what to do if you have a trade either! It's great to be able to tell the dealership to shove it and walk away, there are plenty of other dealerships around, but what if you traded you old vehicle in, and it's already sold?

 

This just happened to a friend of mine. He was trying to get a new Mustang form the dealer that I bought my truck from. He had the car for alittle over a week and got the call that he had to bring it back. Not only did ford not take the financing but all the other banks in the area did not want the loan either. So we took the car back and they gave him back his Ranger. Now except for all the hits on his credit. It is just like he never had the mustang to begin with.

 

I read of this hazard on http://www.carbuyingtips.com/finance.htm when researching vehicles, etc. The site has a lot of info.

Anyway, about 3/4's of the way down the page, you'll read the following:I just notified my sales rep and told her she'd better do all she can to make sure that coupon book is ready when my truck arrives.

 

That would be tough to do. Many banks/finance companies no longer give out payment coupon books. I know Ford Credit has gone to monthly printed/online statements.
Besides, after the dealer completes the financing paperwork with the buyer, they still have to deliver the paperwork to the finance source, who then has to ensure that everything is approved and the paperwork is properly completed and signed, which is very often at least a day after actually vehicle delivery has taken place.

I agree with the spirit of your post - if there is any doubt about the financing arrangements, don't take delivery until those doubts are resolved.

 

The best thing to do for several reasons is:

1) Join a credit union and establish good credit with them. Most institutions implement Buyer Direct and can get an approval in 1/2 hour or so. Once that approval is done, its a done deal.

2) Credit unions frequently offer some of the best finance rates around. Use that to your advantage to try to get the dealer to beat it.

3) Remember - ALL dealers get kickbacks on financing. Its not just the truck and extended warranties that they make money on.

The higher the interest rate you sign on, the more profit they make.

4) Get pre-approved on several website finance companies, too. See what the best rate you can get is.

5) Remember, it all pretty much boils down to 4 letters:

F-I-C-O (Fair Isaac & Company) (see: http://www.bankrate.com/brm/fico/calc.asp for more info)

If you have a 720 or higher FICO score you can pretty much write your own ticket on best rate financing.

 

I think that Ford Credit has different criteria or scaling for extending credit .... I believe that they rate you from 1-5 or something like that, as opposed the FICO/BEACON score from the bureaus.

If you have a payment history with them and sufficient income you should be OK unless you have abyssmal credit.


As part of FOMOCO's larger 'turn around' strategy, Ford Credit is supposed to be re-focusing on its core values, and as a part of this (and to reduce its portfolio risk), they are shying away from the sub-prime paper that they (and all the other moneylenders) were espousing as 'the newest untapped market with great profit margins' back in the go-go 90's.....

Not sure what this means to the 'credit score marginalized' yet otherwise good faith paying customers .... back to the predatory, sub-prime, high interest, zero benefit and excessive fee credit market I guess ...

What a joke ....

 

All I know is that I'd better not get SCrew'd. Okay, sorry for the pun, but it had to be done. No more rhymes, I mean it. Anybody want a peanut?

I, too, have heard elsewhere that Ford has a 1-5 rating system. I did ask my sales rep to pass along my "credit score" which approved me for the 3.9% 60mo. I scored 761. So, I'm very certain that my financing arrangement is pretty safe. But the fact that some dealerships, etc. can do this to folks is just plain scary at times. My credit union will do 4.5%, but I'd rather not increase my %. Who would!?

So with the online payment deal in lieu of the old-style coupon book (which I received eight years ago), how do we know everything is "finalized" to the point that they can no longer jack you?

 

Well Gordo, with a 761 (which is a FICO rating) regardless of whatever this 1-5 Ford rating is, you are in very good shape credit-wise.

You could basically pick your lender (as I stated above) if that is your FICO.

So, you need to sort of get on the offensive. Make the lenders bargain for your business.

Things change all the time too. When I bought my '04 FX4 on 11/29, my CU was offering a best of 4.99. Ford couldn't beat that.

A couple weeks later Ford offered 1.9 for 36 months or something similar.

Now you know why I don't play the lotto.