Buying a car? Some who finance at dealerships lose their cars, must fight to get down payment back

DEKALB COUNTY, Ga. — Decatur resident Lilli Lawson told Channel 2 Action News after her car was stolen last month, she went to Olympic Auto Sales in DeKalb County and drove off the lot with a used Honda CRV.

“Financed it through. Boom, boom, boom. Signed all my paperwork. Everything felt normal,” Lawson said.

She was shocked when the bank she financed her vehicle through called two days later to say they were unable to complete the loan.

“I’m driving the car. It’s Monday. I’ve had it for two days. What are you talking about?” Lawson said.

After an unsuccessful attempt to finance the SUV on her own, she took the vehicle back. The salesman told her the $500 downpayment was nonrefundable. The dealership did offer to apply her $500 to another car on the lot.

Lawson’s situation is not uncommon. It’s called spot delivery.

Georgia consumer attorney Michael Flynn told Channel 2 Action News that consumers should never leave the lot before the financing is secured.

“You’ve got to make sure that the financing is approved and don’t listen to the dealer. Make sure you talk to the bank,” Flynn said.

In Georgia, consumers financing at the dealership sign a bailment agreement.

Lawson’s agreement stated the sale of the vehicle was contingent on Olympic Auto Sales being able to secure financing for the customer.


Shawn Conroy works in the Georgia Attorney General’s Consumer Protection Division.

He told Channel 2 consumer investigator Justin Gray that consumers should watch for bailment agreements in their paperwork, but dealers have a responsibility to make it clear to buyers what they are signing.

“It is imperative that the dealers be transparent about what’s going on and misrepresentations of what’s happening could potentially be a violation of the law that our office enforces the Fair Business Practices Act,” Conroy said.

Olympic Auto Sales told Channel 2 Action News in a statement: “We do not do ‘spot deliveries’ because all our customers leave the lot with a finance arrangement in place.”

The language in the bailment agreement they gave Lawson to sign makes it clear the agreement is contingent on Olympic securing financing.

Lawson told Gray the loss of the vehicle and downpayment weren’t the only hits to her financial situation. The whole mess cost her dozens of points on her credit score.

“Well, when I was approved initially, it was 695, and now it is like a 620. They hit it nine times,” Lawson said.

Olympic claims Lawson provided fraudulent income letters on her application, but Gray looked at the rejection letters from two of the credit and they only say she had, “excessive obligations related to income.”

Channel 2 consumer adviser Clark Howard said car buyers are better off securing their own financing independent of the dealership.

“If you allow this to be a one-stop shop where you get the vehicle and finance it, you’re asking for trouble,” Howard said.


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