What Is “Conditional Delivery”?
If you financed your vehicle through a dealer, chances are you signed something called a conditional delivery agreement (sometimes called a spot delivery agreement). Hidden in the fine print, this agreement says the dealer can cancel the sale if it can’t assign your loan to a lender on terms it likes.
On paper, it seems like routine contract language. In reality, it can leave buyers vulnerable to what consumer advocates call the “yo-yo” scam.
How the “Yo-Yo” Scam Works
Here’s the typical pattern we hear from clients:
You get “approved.” The dealer tells you your financing is approved. You sign the paperwork, hand over your trade-in, make a down payment, and drive home in your new car.
The callback. A few days later, the dealer calls to say your loan “fell through.” You’re told you need to return and sign a new agreement.
The pressure. When you show up, you find your trade-in has already been sold. The dealer demands you sign a new loan with a higher interest rate, worse terms, or bigger monthly payments.
The threats. If you hesitate, the dealer may threaten to repossess your new car, keep your down payment, or even report the car stolen.
At this point, most people feel trapped. You’ve lost your trade-in, you need the car for work and family, and the dealer has all the leverage.
Why Dealers Do It
Dealers love conditional delivery because it keeps you on the hook while giving them a free “do-over.”
For you: the deal feels final. You’ve turned over your old car and money.
For them: the deal isn’t final until they decide it is.
Sometimes the dealer really couldn’t sell your loan. Perhaps more often, it’s a tactic to squeeze you into a more expensive deal. Consumer advocates call it what it is: fraud that targets the people who can least afford it.
Who Gets Targeted?
We’ve seen yo-yo scams used against:
Buyers with poor credit or limited income
First-time car buyers who may not read every line of the contract
People who need a reliable vehicle immediately and feel they can’t walk away
In other words, the very people who most need fair treatment are the ones most likely to be exploited.
Victim of a Yo-Yo Scam? Get a consult with auto fraud attorney Todd Murray.
Since 2009, Todd has been helping Minnesotans combat fraudulent auto sales by used car dealers. His work has returned hundreds of thousands of dollars to his clients’ pockets and has improved the legal protections for used car buyers throughout the state. Todd’s clients have described him as “very professional and easy to work with.” He lives in Minneapolis with his wife and four children.