Spot Delivery Pitfalls- How to Avoid being Scammed

 “Spot delivery” is a widespread and accepted practice in the automobile business.  However, some less scrupulous dealers may try to take advantage of the unwary consumer.

In spot delivery, the buyer takes possession of the vehicle “on the spot,” upon making a commitment to buy or lease on installment, but not yet having a definite arrangement for financing with a bank or finance company.

There are inherent advantages and disadvantages to this practice.  The advantages include 1) a probable sale for the dealership and 2) a gratified consumer who, in need of transportation, is able to get it immediately.  Being able to drive the car home is a convenience to the buyer, for example, when the sale takes place after hours or on a weekend when his credit cannot be immediately verified.

A well-intentioned dealer can usually confirm the terms within 72 hours if you are creditworthy.  He may or may not have conducted a preliminary credit check that indicates you’ll be approved for the requested financing, but you may be allowed to drive the new car off the lot if he is confident you’re a “good risk.”

The downside is that middle- to lower-income customers who don’t have excellent credit may end up not being approved for financing, and they may not have been informed orally of what the written contract states: that the agreement is not binding until financing is approved.  If the financing isn’t approved, either the vehicle must be returned, or less favorable terms must be negotiated.

How can you avoid a situation like this?

• Be an educated consumer and learn the advantages versus the disadvantages of spot delivery.
• Select a reputable auto dealer.  Check them out with the Better Business Bureau.
• Be fully prepared before you go to the dealership, since it’s in your own interest to find the best loan rate and terms.  Ideally, arrange third-party financing ahead of time so you know the amount of money you can borrow.  At least contact your bank or credit union to find out what interest rate you would qualify for, so you can compare this with the dealer’s financing offer. 
• If you do finance through the dealer, seriously consider waiting until financing has been approved before you take possession of the vehicle.
• Before signing anything, give yourself a cooling-off period.  Take your time, think it through, and don't let the salesperson rush you into anything.
• Carefully read all provisions of the contract.  If there are blanks left, ask the dealer to complete them before you sign.  Ask questions if there are items you don’t understand.
• Keep records of all monies you pay in the transaction, and don’t pay with cash.
• Insist in advance on a written assurance that, if your financing should fall through, your deposit and your trade-in will be returned to you; or, if credit terms change, you may cancel the deal.

Source- www.Georgia.gov