The Expert Podcast

• A long-standing, underhanded tactic used by car dealerships is resurfacing: the bailment agreement, also known as "yo-yo" or "be-back" deals.
• This tactic can put your car purchase at risk, potentially forcing you to pay more money or return the car after you’ve already driven off the lot.

• Dealerships may offer a spot delivery, where you drive the car off the lot immediately, while the dealership works to secure financing.
• If the financing doesn’t come through as expected, you may be forced to return the car, pay a higher amount, or even accept a different car altogether.
• The bailment agreement gives the dealership the right to reclaim the car if financing fails, with the promise to refund your money and undo the transaction.

• While this tactic was out of favor for a while, it’s reappearing in the news and industry discussions, such as in a Jalopnik article and a Steve Lato YouTube video.
• Dealers use this tactic to avoid financing risks and maximize profits from loan kickbacks.

• Don’t sign a bailment agreement if you haven’t secured final approval for financing.
• Wait until financing is fully confirmed before taking the car home, even if the dealer pressures you to drive it away immediately.
• Leverage your position by not signing any deal unless the terms are finalized, and ask the dealer to call you once they have approval.

• A customer avoided a potential yo-yo deal by not accepting a spot delivery and waiting until the financing was finalized.
• The dealership made a mistake in their calculations and would have had to call the customer back for a higher payment, but because the deal wasn’t finalized, the customer had the upper hand.

• Always ensure the deal is fully committed with finalized financing before driving off the lot.
• Avoid bailment agreements that give the dealer leverage to change terms after you’ve already taken the car home.
• If a dealership insists on a bailment agreement or changes the terms after you’ve agreed to a deal, walk away. There are plenty of other cars and dealerships that will offer fair, transparent deals.