Deal or No Deal: How Yo-Yo Scams Rig the Game Against Car Buyers

Abstract

The yo-yo scam is an abusive tactic perpetrated by auto dealerships that arrange financing for their customers. The dealer leads the car buyer to believe that the financing is final when it actually is not. After several days the dealer then calls the consumer back into the dealership, claims the original financing deal has fallen through, and pressures the consumer to sign a new financing contract with a higher interest rate or other less favorable terms.This report provides data on the prevalence of yo-yo scams, insight into how yo-yo scams are perpetrated, and identifies which consumers are most likely to be targeted. The findings are derived from survey responses from individuals from five professional organizations serving over 2,100 clients with auto finance-related issues.