The Anti-Yo-Yo Sale Law that Indiana needs.

One of my consumer law attorney friends, Larry Smith, from Chicago, pointed out that Illinois has an interesting law that would help us address a number of yo-yo car sale situations that come up frequently.  Yo-yo sales (sometimes called "gimme back", "spot delivery" or "puppy dog" sales) happen when the car buyer signs paperwork to buy the vehicle, takes the vehicle home, then the dealer says the buyer has to bring the vehicle back because financing fell through or some other problem.

Many car dealers insist that yo-yo sales are completely legal (they almost always use the term "spot delivery"), and most consumer advocates will tell you they are illegal. I can tell you that working on yo-yo sales is a pain in the rear.  This is especially true when most dealers who do yo-yo sales now use a separate document called a "spot delivery rider" or something similar. They claim the document gives them the right to unwind the sale.  Illinois addressed this with a statute that at least prevents the dealer from using the spot delivery as leverage to steal a down payment or a trade in.  And likely the statute prevents the repossession of the vehicle until the deposit and trade-in are returned.   We could use a statute like this in Indiana.

If you have a car dealer try to pull a yo-yo sale on you, as soon as the dealer tells you to bring the car back. call a consumer lawyer. Find one in your area at www.consumeradvocates.org.

815 ILCS 505/2C: If the furnishing of merchandise, whether under purchase order or a contract of sale, is conditioned on the consumer's providing credit references or having a credit rating acceptable to the seller and the seller rejects the credit application of that consumer, the seller must return to the consumer any down payment, whether such down payment is in the form of money, goods, chattels or otherwise, made under that purchase order or contract and may not retain any part thereof. The retention by the seller of part or all of the down payment, whether such down payment is in the form of money, goods, chattels or otherwise, under those circumstances as a fee for investigating the credit of the consumer or as liquidated damages to cover depreciation of the merchandise which was the subject of the purchase order or contract or for any other purpose is an unlawful practice within the meaning of this Act, whether that fee or those charges are claimed from the down payment, whether such down payment is in the form of money, goods, chattels or otherwise, or made as a separate charge to the consumer.