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A Dealer Changes the Financing After You Drive the Car Home

This guide presents selected U.S. government consumer education from CFPB. References to “we” or “us” in the source material refer to the issuing agency. Source dates and links appear below.

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

Make sure the financing is final before you take the car home. A clause in many contracts allows the dealer to renegotiate the deal after you drive the car off the lot.

Some dealers allow customers to take their new vehicle home before the loan has been finalized or fully approved by the lender. This is called "spot delivery" or "conditional financing.” Most auto loan contracts have a clause or a separate agreement that allows the dealer to renegotiate the deal if they later find that the deal you signed isn’t to the dealer’s liking. This is a good reason to consider other ways to finance a vehicle.

If you drive away before finalizing the deal, you risk having the dealership calling you later to say they can’t make the loan at the agreed-upon terms and that they can only offer a loan with higher interest rate, a longer term, a larger down payment, or a combination of those terms. This practice is called “yo-yo” financing.

Legal protections against yo-yo financing

If you’ve driven off the lot without finalizing your contract, you may have a right to keep your car and make the payments as originally agreed on, if:

  • Your auto loan contract doesn’t include a clear statement that the deal was not final, or the dealer did not clearly disclose that the loan was not final.
  • Your contract doesn’t include a statement that the sale was conditional on the dealer being able to find someone to buy your loan within a short duration of time

You are not required to agree to different financing and can walk away if you don’t want to accept the new deal. The dealer should also refund your downpayment. If you’re asked to return to the dealer to discuss your financing and it wasn’t clear to you that the deal wasn’t finalized, you may submit a complaint to the Federal Trade Commission (FTC). If you worked through a Buy Here Pay Here dealer, you can submit a complaint with the CFPB.

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. If you need legal support, you may be able to get help from a legal aid office or volunteer attorney program.

Check and finalize everything before you leave the dealership

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

Before you drive away, make sure you have:

  • Checked all the information, including interest rate and loan terms, to make sure it’s what you’ve agreed to
  • Finished your paperwork, including filling in all of the blanks, and the paperwork is signed by you and the dealer
  • Received a copy of everything you signed

Understand how to close the deal

Learn how to drive off the lot with confidence, including knowing what to watch for both before you leave the dealership and possible red flags after you’ve left.

Read more about closing the deal

What is a retail installment sales contract or agreement?

A retail installment sales contract is a type of financing agreement. It is made directly between you and the auto dealer. The dealer will typically sell the contract to another lender unless the dealer is a buy-here/pay-here dealer.

Traditional vehicle financing involves borrowing money from a bank or other lender. In contrast, a retail installment sales agreement is when you borrow directly from the auto dealer. These dealers typically sell the retail installment sales contract to a bank, credit union or other lender. However, a buy-here/pay-here dealer, will keep the contract.

See different ways to get an auto loan

You have several options to consider when buying a new car or getting an auto loan. Learn how they can affect your overall money picture.

Read more about the ways to finance your loan

How do I know who my auto loan lender or servicer is?

If you financed your loan through a bank or credit union, that is your lender. If you got financing through a dealer, you should receive a welcome letter from your lender or servicer with information on your loan.

Your lender is the financial institution loaning you money for your auto loan. Your servicer is responsible for managing your loan, including collecting your monthly payments. In auto loans, most lenders manage and service their own loans, but occasionally some lenders will use a third party for servicing.

In most cases, your lender or servicer is not your dealership. You may have arranged financing through the dealer, but the loan is from a bank, credit union, or another type of lender.

If you need to find out who your lender or servicer is – for example, if you’re having trouble making your payments and need to ask for help – there are a few ways to find out:

If you have a new loan

If you’ve just finalized your auto loan, you should receive a welcome letter notifying you of who your lender or servicer is. Make sure you keep your paperwork, as it can tell you:

  • Who your lender or servicer is
  • Where to send your payments
  • What counts as an “on time” payment (usually when the lender receives it, not when you mail it) and whether there is a grace period
  • The amount the lender can charge for late fees
  • Whether there is a penalty if you pay off the loan early (prepayment penalty)
  • Who to contact if you are having difficulty making payments

If you have an existing loan

If you already have a loan, one of the easiest ways to find out who to contact about your loan is to look at your monthly statement, which should include the lender or servicer’s company name and contact information in case of questions or issues.

If you bought the car through the dealer, you can also contact the Finance and Insurance(F&I) department at the dealership, which should have record of your lender or servicer.

What should I do if I think an auto dealer or lender is breaking the law?

You have the right to submit a complaint about a problem with an auto lender or dealer that you are not able to resolve.

First, try to work with the company. Companies can usually answer questions unique to your situation and more specific to the products and services they offer. Keep all the documents, messages, voicemails, and records of your interactions with the dealer or lender.

Where do I submit complaints about an auto lender or dealer?

For issues you cannot resolve with an auto lender or a “buy here, pay here” dealer, submit a complaint with the CFPB. For issues with an auto dealership, file a complaint with the FTC.

You can also file a report with your state’s attorney general. If you need a lawyer, there might be resources to help you through your local bar association or legal aid. If you are a servicemember, contact your local Legal Assistance Office.

Sources and publication details

The federal agency source text is U.S. government work in the public domain. Fynoptic selected, adapted, and formatted it for this guide. No agency endorsement is implied. Follow the linked sources for current program details and the rules applicable to your circumstances.

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