Recently a friend asked me what I thought the worst scam was in the car business.

That was like asking what car was the best car – too many choices and no focus.  I had to think for a long time.  I decided to eliminate outright fraud and choose from the many common practices in the market place.  I chose “Spot Deliveries”.

Spot Deliveries, in themselves, are not scams but how they’re used often turn into scams.  On weekends, bank lending departments (including the manufacturers’ lending arms) are not open and therefore cannot approve loans or leases.  In the interest of selling a vehicle on weekends, many dealers will do a tentative loan approval.  The new buyer is happily off driving his new vehicle.  Although, this usually happens on weekends, it can also occur on extra busy weekdays as well, if the dealership is backed up and doesn’t feel they have the time to get approvals on the spot.

If, on the next business day, the loan or lease is either disapproved or approved at a higher interest rate by the lending institution, the dealer will contact the buyers to have them return the car with rental charges or sign a corrected loan or lease at a higher payment, causing significant headache and upset to the driver.  At the time of the original delivery, if the possibility of this loan change or increase in payment (based on the credit score) is not discussed, as often happens, this results in even more weeping and gnashing of teeth.

MORAL OF THE STORY – If you’re not paying cash and your credit is less than perfect (scores over 700 to 740 depending on the lender), don’t take delivery of a vehicle on a weekend or at a very busy dealership, unless the loan or lease has been previously finalized and approved.  Better yet, get a referral to a good broker you can trust and stay out of dealerships altogether, unless accompanied by your broker.