Lemon Law Blog

As we have reported repeatedly on this blog, car sales are down big time! As a result, dealers are doing everything they can to make a sale.  Unfortunately, some dealers are more concerned with getting the cars off the lot immediately than they are about securing financing for their customers.  And as new car sales continue to be more competitive, we are receiving a plethora of calls at 1-800 LEMON LAW regarding a dealer tactic known as spot delivery.

Most folks have heard of this tactic before.  An alleged spot delivery transaction between a NJ consumer and the Brad Benson dealership found its way on National TV (and throughout cyberspace).  Spot Delivery occurs when a dealer puts a consumer in a new car “on the spot,” with the consumer signing a number of documents, including a retail sales agreement.  Later on, the customer starts receiving calls tellling them their financing did not go through. In most cases, they are trying to get the customer to come back to pay more money than they originally agreed to.   Some dealers play dirty when this occurs.  They may threaten repossession, or not pay off a trade-in, or make numerous threatening phone calls. And in most cases, customers feel trapped into paying more money.

So, what should you do? You need to stand your ground.  If you signed purchase doucments and registration applications, obtained insurance, and a new license plate installed or an old plate transferred, the car belongs to you.  Here are some other tips to follow if you find yourself in a spot delivery situation:

• Keep all copies of your paperwork and anything else associated with the sale (including calendars, photographs, advertisements). If the finance manager asks for your papers at any time for any reason, refuse! Keep these documents in a safe place, not the car.
• If you are called back to the dealership to sign additional papers, either do not go or do so in a different car than the one you bought.
• Have a friend or spouse drive you and witness whatever is being told to you. This will prevent the dealer from taking your car as hostage, an all too common happening.
• If a dispute arises with the dealer over the contract and the dealer demands the car is returned, park it in a garage or remote location until the matter is resolved, to prevent it from being taken against your wishes.
• Put together a complete time line of everything that happened from the time you thought of purchasing the car until the car was taken away. Try to remember specific names of dealership personnel and any statements that were made to you during conversations with the sales and finance staff.
• Keep track of all monies you had invested into the purchase, including registration, insurance, down payment and trade. Never pay cash and always get a receipt!

If after reading this, you realize that you are a victim of spot delivery, you may want to contact a consumer attorney to take action. At this time, we are handling spot delivery claims in Pennsylvania and New Jersey. If you are in either state, please contact us via e-mail or by calling Michael Sacks, Director of Client Services at 1-800 LEMON LAW (1-800-536-6652) ext. 131.  If you reside in another state, contact your attorney general or check out our attorney directory.

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Former football star Brad Benson is known for his light-hearted radio and television commercials, however he may have gotten a bit more publicity than he bargained for when his dealership was featured last night on the ABC program “I-Caught.” You can watch the video from YouTube here:

The video does not tell the whole story. A daughter enters Brad Benson Hyundai and returns her mother’s car, citing the fact that the dealership changed the interest rate and caused her mother significant aggravation. As she is leaving the dealership, she warns prospective customers. She records the transaction as proof that they did return the car. The salesman seems caught offguard and completely uninformed about the situation, essentially looking like a deer in headlights. She submits the video to a wonderful website, the consumerist (I love their tag-line: Shoppers Bite Back) and the story caught the attention of ABC producers.

Not one to back down from a fight (He once challenged Rosie O’ Donnell to a mud wrestling fight in one of his ads), Mr. Benson put up his own well-produced video rebuttal:

In his video, he gives a whole other side to this story. Essentially, he is leaving it to the public to serve as judge and jury and judging from the comments, it appears most YouTube viewers are siding with the protective daughter.

While it would be difficult to put together the pieces of this puzzle without reviewing the paperwork, there are a few rules of thumb everyone needs to be made aware of:

1) Once you have a signed sales contract, it is binding and both parties must uphold the terms of the contract. That means that if the dealer guarantees a certain interest rate, they must secure the financing. It also means that customer must agree to buy or lease the car at the stated cost and interest rate.

2) It is therefore imperative that before you sign on the dotted line, you read through the terms of the contract and make sure you understand them. If you have questions, ask! Do not put down false information about yourself, even if the dealer encourages it. If you have to be dishonest to get a certain deal, it is not worth it and we have seen scenarios where dealers use this to pull the rug out from some customers.

3) If you have a signed retail sales agreement, and the dealer calls you to tell you that they can’t secure financing and you have to resign the contract for a higher interest rate/and or cost OR you need a co-signer, STOP! You could be the victim of a dealer fraud scam known as SPOT DELIVERY WITH YO-YO. It is illegal for a dealer to repossess a car if there is a binding sales agreement If you find yourself in this situation, contact us.

4) On the other side of the coin, you can not just return a car. A car is not a shirt or a book. Once you sign a binding agreement, you are responsible for upholding the terms of that agreement. If you sign a blank contract, you are essentially singing a blank check. Your signature is your most valuable possession. Use it wisely. If your car is giving you troubles, contact us or another consumer attorney, but do not just drop off the car. This will be viewed as a voluntary repossession. The dealer can sell the car on the auction block and sue you for the difference between what they received and what you owe them. Plus, your credit will be ruined. PLEASE DO NOT TAKE THE LAW IN YOUR OWN HANDS. This could backfire on you big time.

It remains to be seen how this case will carry out. I am sure this is not the last we have heard regarding this. Stay tuned…..

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