NPR recently interviewed multiple car buyers who experienced the “yo-yo.” This occurs when a car buyer signs papers and takes the car off the lot, only to have the dealership announce days later that the financing fell through. The dealer indicates the deal is invalid, and the car must be returned or refinanced at a different rate. By this point, the buyers may have sold or traded in their previous vehicle, or at least have been seen by family, friends and neighbors driving the new vehicle causing them to feel trapped.
The Federal Trade Commission collected public comment in 2022 on a new trade regulation rule for motor vehicle dealers that would prohibit dealers from certain deceptive practices related to financing and add-on products. The public comments are being reviewed.
In addition, your Better Business Bureau is dedicated to helping preserve “an ethical marketplace where buyers and sellers trust each other.” BBB strives to support best practices.
While these practices are being reviewed against current regulations, your BBB and the Federal Trade Commission offer recommendations to help ensure you experience a smooth, honest, safe transaction when making a major purchase like that of a new vehicle.
Here are tips to help you with your car-buying decision:
– Do your research. Check if the dealer is BBB accredited and read the dealership reviews. Before you go, you should know the make and model you want and if you want a used or a new car. Be sure to check state laws before making a final decision.
– Determine financing options. Decide how you plan to finance the car. Before arriving at the dealership, consider looking online at the best deals to stay on a budget that works for you. Ask about their leasing policies to see if they are a good fit. If you decide to do preapprovals, the Trade Commission advises doing only a few since your credit will be pulled each time.
– Check to make sure you’re using secure sites. If you decide to do online preapprovals, be aware of online safety and ensure the website is secure. Look for the closed lock by the URL and a website link that starts with https instead of http.
– Visit the dealership. Look at the car before you make a purchase. Visit the dealership in person to see the vehicle and take the car for a test drive. Check for any exterior or interior damage that may not have been disclosed. Ask about the history of the car: Has it been used? How many owners does the car have? Has it been in any accidents? It’s important that you are comfortable with your chosen make and model before driving off the lot.
– Have an independent mechanic check the vehicle. If this is a used vehicle, ask if you can take the car to a local, trusted mechanic to have it reviewed for any concerns. You should do this before you make a purchase to avoid headaches later and be wary of a company that won’t allow you to do so.
– Negotiate the best rate. Ask questions regarding warranties, trade-ins, service contracts and other add-on services. Ensure you have a clear understanding of your deal before you sign. If a dealer attempts a yo-yo situation, ask the dealer if they can work with you versus returning the car or paying a higher rate.
– Use secure payment methods. Payment methods such as peer-to-peer payment apps or gift cards are not the most secure since payments cannot be returned. Consider using a credit card that offers protection if you need a refund.
– Be on the lookout for red flags. Always use payment methods that offer security in case of a return. Never do handshake deals; get documentation of everything to ensure your purchase is official. Do not be afraid to walk away if you don’t feel comfortable; you do not have to do business with a shady dealer.
Got a lemon? If you do purchase and feel you have a “lemon” or need to resolve a dispute, contact BBB Autoline.
Purchasing a car is a big decision that can come with many uncertainties. Practice smart shopping both online and in-person, and always look for businesses that follow BBB standards for trust.
Shred Day update
Thank you to BBB’s partners who helped make our recent “Shred Day” a tremendous success. On April 15, 800 cars filled with families and individuals came through Shred Day with more than 12.6 tons of documents to be shredded onsite by River City Shredding.
They also dropped off 393 hard drives for destruction — a record number — and more than 2 tons of escrap was kept out of our general waste streams thanks to electronic recycling with Resource 1 Tier 3 Data Security. Hamilton County Coalition’s law enforcement representatives collected more than 386 pounds of prescription medications and vials for safe disposal — another event record.
BBB also thanks Coca Cola Bottling Co. Inc. for providing its parking lot and beverages for attendees, along with our event media partners: Chattanooga Times Free Press, Local 3 News, Cumulus Radio, Bahakel Communications and NoogaToday. The fall event is set for Saturday, Oct. 7, 9 a.m.-noon in Coca Cola Bottling Co.’s parking lot at 2111 Shepherd Road in Chattanooga. (Exit 1A off Highway 153).
Michele Mason is president of the Better Business Bureau in Chattanooga.