NPR: “Even after you think you bought a car, dealerships can ‘yo-yo’ you and take it back”

February 4, 2023 — Featured News

Originally airing on NPR during All Things Considered on February 4, 2023, Chris Arnold discusses deceptive auto sales and interviews John Van Alst.

“It does happen all too frequently,” says John Van Alst, an attorney with the nonprofit National Consumer Law Center.

Usually, when you finance a car through the dealer, technically you owe the dealership the money for the car. But the dealer wants to quickly sell the credit contract you signed to, for example, the credit arm of Ford or Toyota or some other auto lender.

That’s why car dealers often put in the fine print that if they have trouble doing that, they can cancel the sale.

“They want you to feel bound by the contract,” says Van Alst. “But they want to be able to walk away.”

Sometimes the car dealer made a mistake and thought they’d be able to find a lender.

But other times, Van Alst says, “it’s used as a technique by dealers to try to force consumers into a worse deal.”

In those instances, he says, the salesperson knows the deal is too good to be true, but lets you think you’ve bought the car anyway. So you take it home, show it to your friends and family. Then a few days or weeks later you get the phone call yanking you back like a yo-yo.

“‘Oh, no,'” Van Alst says the dealer tells you. “‘You’re going to have to accept an 8% higher interest rate.'” And at that point, he says, “It’s a whole lot more difficult for the consumer to walk away. The dealer might have already sold their trade-in.”

That’s called “unhorsing” the car buyer. “They are then sort of at the mercy of the car dealer,” he says.