Take Action to Protect Yourself Against Auto Dealer Scams
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In the next few weeks, Maryland state lawmakers will be discussing new automobile buyer protections that prohibit automobile dealers from selling a consumer’s trade-in vehicle until the financing on the new vehicle is final.
Maryland is joining other states in growing efforts to protect vehicle buyers. Earlier this year, California passed a vehicle buyer protection law that would protect used-car buyers, giving them the opportunity to return a vehicle after it is already purchased and limiting the amount of money dealers can make off of a sale, among many other protections.
These new safeguards are important to shield consumers against widespread deceptive practices by some automobile dealers. Each year, countless numbers of automobile buyers are conned out of thousands of dollars and their trade-in vehicles by unscrupulous automobile dealers who practice what is commonly called a “yo-yo scam.”
Yo-yo scams occur when a dealer encourages customers who have financed a new vehicle through the dealership to drive the vehicle off of the dealership lot after the purchase but before the financing is approved by a bank. Dealers may not inform buyers that the vehicle purchase was contingent upon obtaining approval from a bank.
A few days or more than a week later, the dealer will contact the vehicle buyer and say that the financing has fallen through. The dealer will tell the buyer to bring the car back to the dealership to renegotiate financing – to the benefit of the dealer. Often, the dealer will have already sold the buyer’s trade-in vehicle, leaving the buyer without any alternatives.
Fight these scams. Tell your lawmaker it’s important to protect consumers from being swindled by crooked auto dealers.