Beware of Spot Delivery and Other Dealer Fraud and Scams

December 11, 2024
By: Robert Silverman

So you purchased a beautiful new car, signed all the necessary paperwork, and drove it right off the lot with a big smile on your face. The dealer got you approved “on the spot” for what’s called “Spot Delivery”- or so you thought.

A few days or weeks later, the dealer calls and asks you to return to “sign a few more papers.” They say, “We couldn’t get the car financed, and you need to sign a new loan with another bank,” or “You need someone to co-sign,” or “Give us another $1000 and we can do the deal,” or “We need to increase your monthly payment to get this done.”

The dealer may even have delayed paying off a traded vehicle loan or refused to mail registration papers, all to place additional pressure on you to either do as instructed, or face dire consequences to your credit.

Sound familiar? It gets worse.

If you refuse, the dealer may threaten to repossess the car, tell you that you have no legal entitlement to keep it, or even make you wait for hours at the dealership under some excuse, just to wear you down. This situation is most common involving consumers with bad credit, since dealers perceive that such people are vulnerable and easy to take advantage of.

Most consumers assume the dealer is telling the truth and will do whatever the dealer says, resulting in higher payments, additional money being spent over the life of the loan, and/or thousands of dollars in increased “hidden” costs. Those who refuse see their cars repossessed.

What is happening here? It’s a scam. Dealer fraud. Unlawful. Illegal.

Call it what you will. The industry has given it a name: Spot Delivery, a description which refers to the dealer placing a consumer in a car “on the spot,” to get the sale, only to “yo-yo” them back at a later date for additional funds. Played to perfection, a dealer can reap thousands of dollars in unearned fraudulent gain.

What You Should Know About Spot Delivery

If you signed purchase documents and registration applications and if you obtained insurance for the vehicle, had a new license plate put on the car, and/or had your old plate transferred, the car belongs to you.

Spot Delivery happens to unsuspecting consumers throughout the United States. It is very popular with dealers in Pennsylvania, New Jersey, and Delaware. If you find yourself in this situation, the chances are good that you have legal remedies available to right this wrong.

How to Protect Yourself from Spot Delivery or Dealer Fraud

• Remember that if you have signed papers, you own the car, regardless of whether the vehicle has been financed.
• Your credit was good or the dealer would not have delivered the car to you at the price you agreed to pay.
• A finance document showing payments, deposit, interest rate and other financial items is a binding contract, giving you specific legal rights.
• You own the car subject to making payments only. The dealer cannot change that once you take possession.
• 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 occurrence.
• 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 you believe you are a victim of a Spot Delivery scam and wish to discuss it with a consumer attorney, call 1-800-LEMON-LAW (1-800-536-6652) or email .

Remember to leave a daytime telephone number where you can be reached. Based on the information you provide us, an attorney will meet with you to discuss your claim. If we do decide to represent you, the process will be cost-free.

Kimmel & Silverman are only able to assess Spot Delivery cases in PA and NJ. For other states, please contact your state Attorney General’s office.