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A yo-yo is a simple toy that when handled correctly returns to the hand of the person using it. Unfortunately, there is another common meaning for the term yo-yo. This kind of yo-yo refers to the practice of certain car dealers when they approve financing on a vehicle, and then turn over possession of the car to the new proud owner. A week or so later the car buyer learns for the first time that there is some problem with the financing and that they need to bring the car back to the dealer. The dealer jerks the string and the car yo-yo’s back to them. When the car buyer may be told that the car financing did not go through and that a new sales agreement must be signed. Not surprisingly, these new agreements often have different terms such as a higher interest rate, higher sales price, require more down payment, or a combination of the above. In a website section pertaining to consumer protection The Texas Secretary of State recognized this possibility.

“It has been known to happen: the consumer leaves the old car as a trade-in and drives away in the new car with only a verbal agreement about the amount of the monthly payment. The contract just needs final approval – “a mere formality” – by a manager who is not immediately available.

What happens? The buyer’s credit is not approved, the monthly payment will be significantly higher and the trade-in has already been sold. The buyer is stuck with the new car at the higher payment.”

Yo-yo situations may be a sign of fraud by the car dealer. If the initial paperwork does not adequately describe the financing as contingent, if the buyer is told that the deal is done and everything is “fine”, fraud or other deception may have occurred. A dealer may say that it could not sell the financing contract and thus it is revoked. Generally, any finance agreement can be sold, perhaps just not for the level of profit the dealer would like. Yo-yo style deals may indicate breach of contract, fraud, and violations of state and federal law.

Depending on the situation, and the documents that were signed at the time the car was originally delivered, the buyer may have valuable remedies including rescission (complete undoing of the deal), breach of contract damages (the difference in the original contract terms versus the new contract terms), attorney’s fees and, in some cases, punitive damages (damages assessed against the wrongdoer to punish it for its behavior and to deter similar acts in the future.).

The Julie Johnson Law Firm is dedicated to the protection of consumer rights. If you have been victimized through questionable dealer practices please fell free to contact us at http://juliejohnson.wpengine.com/.A yo-yo is a simple toy that when handled correctly returns to the hand of the person using it. Unfortunately, there is another common meaning for the term yo-yo. This kind of yo-yo refers to the practice of certain car dealers when they approve financing on a vehicle, and then turn over possession of the car to the new proud owner. A week or so later the car buyer learns for the first time that there is some problem with the financing and that they need to bring the car back to the dealer. The dealer jerks the string and the car yo-yo’s back to them. When the car buyer may be told that the car financing did not go through and that a new sales agreement must be signed. Not surprisingly, these new agreements often have different terms such as a higher interest rate, higher sales price, require more down payment, or a combination of the above. In a website section pertaining to consumer protection The Texas Secretary of State recognized this possibility.

“It has been known to happen: the consumer leaves the old car as a trade-in and drives away in the new car with only a verbal agreement about the amount of the monthly payment. The contract just needs final approval – “a mere formality” – by a manager who is not immediately available.

What happens? The buyer’s credit is not approved, the monthly payment will be significantly higher and the trade-in has already been sold. The buyer is stuck with the new car at the higher payment.”

Yo-yo situations may be a sign of fraud by the car dealer. If the initial paperwork does not adequately describe the financing as contingent, if the buyer is told that the deal is done and everything is “fine”, fraud or other deception may have occurred. A dealer may say that it could not sell the financing contract and thus it is revoked. Generally, any finance agreement can be sold, perhaps just not for the level of profit the dealer would like. Yo-yo style deals may indicate breach of contract, fraud, and violations of state and federal law.

Depending on the situation, and the documents that were signed at the time the car was originally delivered, the buyer may have valuable remedies including rescission (complete undoing of the deal), breach of contract damages (the difference in the original contract terms versus the new contract terms), attorney’s fees and, in some cases, punitive damages (damages assessed against the wrongdoer to punish it for its behavior and to deter similar acts in the future.).

The Julie Johnson Law Firm is dedicated to the protection of consumer rights. If you have been victimized through questionable dealer practices please fell free to contact us at http://juliejohnson.wpengine.com/.