A Spot Delivery When Car Buying Can Leave A Mark

In the car business a ’spot delivery’ is a common practice. But just like about anything else that involves revenue, sales, and commission, there are those that are unscrupulous around us.

What happens in a ’spot delivery’ is that the buyer agrees to the terms and conditions of the loan and to take delivery ‘on the spot’… even though the financing contract isn’t yet been picked up and actually approved by the bank.

All dealerships have working relationships with various financial institutions that approve (and disapprove)the loan papers.

Sales managers work with and evaluate potential buyers credit reports and credit scores all day long in conjunction with the working relationships that they have with their various lenders. Needless to say there are many business hours that a car dealership is open and doing business that the banks and lenders are not. As such, dealers will make the decision to ’spot deliver’ a car based on the probability that they will be able to get the loan as stated in the contract from one of the lenders.

For those customers with good to excellent credit, this is rarely if ever a problem. The problems occur when someone’s credit is in the gray area. Also, more often than not this usually (but not always) involves a used car purchase.

As you might imagine, under the aforementioned business practice there would be advantages and disadvantages (as well as the opportunity for exploiting). The most prominent advantage is for both sides. For the dealer… obviously the sale. For the consumer who may need transportation, the ability to take delivery ‘on the spot’ and not have to wait for the next available approval such as when a sales takes place after hours or on the weekend.

Again, this all depends on your credit rating and if you are deemed a good risk.

The problems can occur when those who don’t have the best of credit and don’t have the income to overcome the lackluster credit, ultimately don’t get approved for the financing terms that the dealer put them in the car at.

So what happens… first of all all the contracts that I ever dealt with state that the agreement that you are signing up for is contingent upon approval from the lender. In other words, the agreement isn’t binding until the vehicle financing is approved.

If the car financing isn’t approved… the ’spot delivered’ car must be returned or you’ll have to re-sign papers for a less favorable deal.

When a dealer mis-calculates and doesn’t get a car buyer approved for the terms that they put the customer in the car with, it’s not a pleasant situation.

I know that there are unscrupulous dealers out there and this is where the window of opportunity opens for them… but that’s a whole other article and for the purposes of this one, I’m going to just stay with the idea that the dealer got a bit too aggressive thinking they could get the customer approved.

So, when the bad news comes back that none of the lenders will approve the loan ‘as is’, outside of returning the car, the customer will generally have to come up with a larger down payment (this puts the lender at less risk), accept a higher interest rate (which will mean higher payments) or in some cases have to come up with a co-signer of good credit standing.

None of these options are pleasant, and for me as a sales manager weren’t pleasant to have to be the bearer of the news either.

8 Car Buying Tips To Avoid This Situation:

1. First and foremost know what a ’spot delivery’ is (which you should by now) and know what can happen if the dealer can’t get you approved.
2. Check with the Better Business Bureau and/or only visit reputable car dealers.
3. It’s in your best interest to find your own loan rate and terms. If you can, apply for and arrange a loan so you’ll already know what you’re approved for. At the very least, talk with your bank or credit union and see what term and rate you could qualify for… you’ll then be able to compare with the dealer’s offer and get the best car deal possible for your scenario.
4. This is a biggie… especially if your credit is risky… if you finance through the dealer, after signing the papers, simply decline to take a ’spot delivery’ of the car… just tell them you’ll be back to pick up the car once the financing has been dutifully approved.
5. Give yourself a cooling off period. This is a good idea because buying a car can be a long and tiring day… give yourself a chance to get yourself back together after the rush of the car deal.
6. Read everything… ask questions!
7. Keep a record of everything and don’t pay cash.
8. Get it in writing… if you’re going to accept the car buying ’spot delivery’ it is not too much to ask to get in writing that your trade-in WILL be returned to you if the financing should fail… and… if the financing does go through but with different credit terms than you were ’spot delivered’ at… you are free to cancel the deal.

Getting the Best New Car Deal

Ah yes, the car buying experience.

Whether it’s working on getting your best new car deal or your best used car deal for that matter.

It’s an event, a project, a day out amongst friends we all enjoy. You just can’t beat it!

The whole car buying experience….. a day of rest and relaxation.

Assuming you’re the type that feeling of confusion, occasional anger, and constant frustration is a source of relaxation for you.

Ok, maybe not… So let’s take a look at what you’ll be up against.

O.K.

Before we jump in and get you started, I want to take a brief moment to tell you what my website is about.

I’m all about helping you buy a car and all the basic pieces of putting together to get the best deal on a vehicle you can for yourself. How to, when to, what to, what not to… and all that.

There are certainly many good car buying advice and research websites out there. But with this website, unlike many of the others, you’ll get information and articles written by someone who spent years in the car business.

I’ve been on the sales floor convincing people to buy. I’ve sat in hundreds of sales meetings both good and the one’s where we were basically told our jobs were on the line this month if we didn’t make our projections.

I’ve managed the finance and insurance department selling not only F&I, but security add on’s, glass etching add on’s, extended warranties, and anything else the dealers saw potential profit on.

Used cars… you bet. Done that too. Primary financing, secondary financing, going to auctions every week to buy inventory. Working wholesalers to get every penny out of car that I could possibly get.

For the purposes of this website I have tried to keep each page as standalone as possible so you can jump around to the various areas of topic and all will still flow and make sense.

So take a look around and come back later… or roll up your sleeves and learn how to save yourself some big bucks on your next car buying excursion.
Are dealers and salespeople in the car business to make a profit and support their families and enjoy the things in life they like to do?

Of course, they are. Aren’t you? Isn’t that why you work hard everyday?

Are there good, honest dealers and ….. well not so good, honest dealers…. well yes. Are there good, car salespeople… and not so good, honest automobile salespeople? Well, of course there are. Doesn’t that seem to be the case no matter who you deal with in life?