NBC15 Investigates: Woman asked to return car weeks after she bought it
Beloit woman shares her story as a cautionary warning to future car buyers about financing risks.
ROCK COUNTY, Wis. (WMTV) - Imagine walking out of a dealership after buying a new car and weeks later being asked to return it. That’s what happened to a Beloit woman who reached out to NBC15 Investigates to share her story.
Christina Martinez says she wants to warn future car buyers about the risks involved with vehicle financing. Martinez says she purchased a used SUV several months ago from a dealership in Rock County. She says she left the lot with her new ride and a smile on her face, but she had no idea her purchase might not be permanent.
“Three weeks down the road, I started getting calls from the dealership…stating that the loan company did not accept the terms of my loan and that I would need to come renegotiate,” said Martinez.
Renegotiating the car loan meant possibly ending up with a higher monthly payment and interest rate. Martinez says when she questioned this, she was told that if she didn’t like those terms, she could bring the car back but she wasn’t given a guarantee that she would get her $3,000 down payment back.
Martinez says she was angry and frustrated because she knew what she wanted and what she could afford and shopped around before choosing a car to ensure she found something that was best for her. She was also upset because this was a special purchase for her.
“I had just lost my son.”
She says she wanted to buy the car to take a cross country trip to Nashville to scatter her son’s ashes. “It was something I was trying to do for myself to help me move on,” she said.
Consumer advocates say this situation can be frustrating for any car buyer.
“This is a sales tactic that some salespeople and finance people use at dealerships,” said Sarah Orr, Director at UW-Madison’s Consumer Law Clinic. The clinic provides legal services to those who can’t afford to hire an attorney.
Orr is not Martinez’s attorney, but says she has seen similar cases where vehicle financing is rejected after a consumer makes a down payment and signs a contract.
“It’s known as a ‘Yo-Yo’ sale.” Orr says it’s called a “Yo-Yo” sale because the deal bounces back.
“It’s frustrating because the consumer did everything they thought they needed to do and then to find out it isn’t a solid deal,” said Orr.
In Wisconsin, car dealerships are regulated by the state through the Department of Transportation. While officials say these kind of sales don’t happen often here, when they do there are protections in place for car buyers.
Michael Domke is the Section Chief for the Wisconsin Dept. of Motor Vehicles. “If a dealership accepts the financing terms and the customer signs the contract and leaves with the car…the dealership has the responsibility to honor those terms and conditions,” said Domke.
The terms must be honored, even if a third party lender backs out. “The dealership has the obligation to find funding for that customer at the same terms and agreement,” said Domke.
Martinez says she read the fine print of her contract and hired a lawyer to contact the dealership.
“The contract stated they only had two hours to change the terms. If they did not accept the terms and my first car payment, they would be in breach of contract,” said Martinez.
After hearing from Martinez’s lawyer, she says the dealership ultimately honored her contract and accepted her first car payment.
NBC15 Investigates is not naming the dealership because Martinez says they worked with her to find a resolution. The general manager of the business says the issue was with the third-party lender that was financing Martinez’s loan. It’s a company called Global Lending. Martinez says the dealership told her they will no longer do business with that loan company.
NBC15 reached out to the finance company for comment but have not heard back.
While the situation is resolved, Martinez wanted to share her story as a warning to future buyers looking to finance their next car.
Martinez says pre-approval is the best option and consumer advocates agree. Pre-approval is when you secure financing before heading to a car lot. It’s common to work directly with a dealership for a car loan but consumer advocates say you might get a better deal by finding financing on your own through your bank, credit union, or another trusted lender.
The DOT encourages buyers to check out its vehicle buyer’s guide for recommendations on smart car buying. DMV officials say car buying in Wisconsin is safe and if you have an issue at a dealership, always file a complaint.
More Car Buying Resources:
Wisconsin Dept. of Agriculture, Trade, and Consumer Protection - Keys to Vehicle Leasing
Better Business Bureau - Buying a Used Car
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