My dealership started ‘yo-yo’ing’ my car – they kept trying to take it back for ‘problems’ after I bought it weeks ago
A COUPLE has had their car reclaimed multiple times and eventually taken for good by a dealership over constant, headache-inducing issues.
The two filed a lawsuit against the dealer over the back-and-forth "yo-yo'ing" of their family car.
Courtney and Darren Johnson, a young couple living near Orlando, Florida, traded in their older pickup truck to finance a Hyundai SUV.
Courtney had recently had a baby and wanted a vehicle that offered more peace of mind when driving her most precious cargo.
"I was excited," Courtney told NPR last year.
"I felt like I'd made a good decision as a mother. It had the backup camera, and passenger and kid's airbags in the back."
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She enjoyed her Hyundai for three weeks until the dealership called and told her they needed to come back to sign on "new terms" after the dealership wasn't able to finance their car under the previous terms.
If they failed to sign the new terms, the Hyundai would be repossessed.
"I was kind of confused," she recalled.
"I thought this was a legally binding contract. ... We've had this vehicle at home. What do you mean it's not financed?"
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What happened to the Johnsons is called being "yo-yo'd," or what the FTC calls, "bait and switch marketing," where a dealership implements legal language in the sales contract that allows them to back out of a sale if they're not able to sell a loan at the original terms agreed upon with the customer.
Most times, it's a legitimate and very rare instance and a dealership renegotiates the term of the loan, but for many, it's a tactic used by dealerships to trick people into more costly numbers to the benefit of the dealership.
Dealerships are also not required to keep a trade-in, so if the vehicle is sold and the customer cannot afford the new terms of the deal, they've effectively "unhorsed" the customer - leaving them without a car and paying off an expensive loan for a car they no longer have.
The Johnsons, backed into a corner, signed the new terms to keep their baby-friendly SUV.
A week later they were called in an additional time to renegotiate the terms again.
This time, they refused to sign the new terms.
"At that point, it just all seemed really fishy," she said.
I thought this was a legally binding contract. ... We've had this vehicle at home. What do you mean it's not financed?
Courtney Johnson
The Hyundai was soon repossessed by the dealership, and since the dealer had sold their truck, there was nothing for the couple to drive - relying on friends to take them to doctor appointments.
"I was, like, counting out change, trying to give friends money for gas to get places," Courtney said.
The Johnsons feverishly searched for a lawyer who would take their case and found attorney David Abrams.
He acknowledged the case was risky for the couple, especially since the dealership countersued the couple for legal fees and "storage fees" for their pickup truck they never returned.
Financing for vehicles
There are 3 main types of car finance - personal car loans, Hire Purchase (HP), and Personal Contract Hires (PCH).
One of the simplest ways to finance your new car is through a car loan.
It involves borrowing money to buy the motor.
You will need to work out how much you need from the lender - a bank or building society - as well as how long you want to borrow the money for.
But with a personal car loan, you can drive as far as you like, and if the car picks up any damage to the interior, there’s no expectation to have this fixed unless you want to.
Hire Purchase is a handy option that lets you spread costs over monthly payments - until you finally own the car.
HP repayments might be slightly higher than with other options as you’re making regular payments to eventually own the vehicle.
But on the upside, it won’t penalize you if you don’t have a good credit history.
HP finance is secured against the value of the vehicle, so if you’re unable to stick to your monthly installments, the finance company could take the car back.
The third great option, with PCP finance, you won’t own the vehicle during the agreement – it will instead belong to the finance company.
You will be asked to put down a deposit and pay regular installments over the agreed term.
If you decide it’s time to give up your motor, you can simply hand it back or part-exchange for something new.
After a few months, Abrams was able to earn the family a victory of $225,000 in damages from the dealership.
"I'm glad the dealership got punished," Darren said.
THE FTC FIGHTS BACK
The FTC, after hearing several complaints similar to the Johnsons, began drafting restrictive transparency laws for dealerships laws that would protect people from being yo-yo'd.
The new Rule, called CARS, or the Combating Auto Retail Scams (CARS) Rule, was passed in December of 2023 stating dealerships would no longer be able to allow customers to leave the lot until financing is approved and they're able to finalize the terms with their finance branch.
They would also be banned from selling trade-in vehicles until financing is finalized, to allow customers to have their vehicles returned to them in case they can't afford new terms.
If a dealership is found to have violated the Rule, the dealership may need to pay civil penalties to customers, as much as $50,120 per Rule violation.
THE TRUTH ALWAYS WINS
The law is due to go into effect on July 30 but has been postponed due to a counter-lawsuit from the National Automobile Dealers Association and the Texas Automotive Dealerships Association.
The agencies argue the Rule imposes an "unfair" rise in fees to dealerships.
The FTC is confident the Rule will be maintained.
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"To the extent there are costs, those are outweighed by the benefits to consumers, to law-abiding dealers, and to fair competition," the agency wrote in a statement.
"Honest dealers will not be at a competitive disadvantage relative to dishonest dealers... The CARS Rule is a big win for consumers, who can expect that established standards of truth and transparency."