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We're the Consumer Financial Protection Bureau (CFPB), a U.S. government agency that makes sure banks, lenders, and other financial companies treat you fairly.

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Can the dealer increase the interest rate after I drive the vehicle home?

Answer:

Some dealers will allow the customer to take possession of the new vehicle before the loan is approved by the lender. This practice is sometimes called “spot delivery.” In some cases after you drive away with the vehicle but before the sale is finalized, the dealership will later tell you that they couldn’t make the loan at the agreed-upon terms. They then may ask you to bring back the vehicle and renegotiate the loan for a higher interest rate, a longer term, a larger down payment, or a combination of those terms. 

If this happens and you don’t agree to a second deal, the dealer will have to unwind the sale and give you back your trade-in and down payment. This is sometimes called a “yo-yo sale” and you may be entitled to legal protections in some situations.

Before you drive off with your new vehicle, make sure:

  • you reviewed the contract and disclosures before agreeing to the loan and auto sale to make sure you understand the terms of your deal;
  • you have a signed copy of all documents that both you and the dealer have signed and that all blanks are filled in;
  • the financing and the loan rate is final before you take the vehicle off the dealer’s lot.

If the contract did not contain a clear statement that the deal was not final or that the sale was conditional on the dealer being able to find someone to buy your loan within a short duration of time, and if you already signed all of the documents before you left with the vehicle, you may have a right to keep it and make the payments as agreed. If you are asked to return to the dealer to discuss your financing and it was not disclosed to you that the deal was not yet final, you may submit a complaint to the Federal Trade Commission (FTC) or in the case of a Buy Here Pay Here dealer, with the CFPB online or by calling us toll-free at 1-855-411-CFPB (2372). You can also tell us about your experience without submitting a formal complaint. You can also submit a complaint with your state attorney general or state consumer protection office. If you’re in the military, you should report this to your installation JAG immediately. To find your JAG Legal Assistance Office use the locator.  If you need to legal assistance, this list of lawyer resources from the American Bar Association. You can find legal help from your legal aid office or volunteer attorney program.

The best way to protect yourself from a yo-yo sale is to make sure the loan and sale are final BEFORE taking the vehicle home.

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