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While buying a car is usually an exciting time, it can also be scary for first-time buyers who don’t know what to expect from a car dealership.

So much more is involved than just picking out the car you want. They look at your credit score to determine what you can and can’t afford, and sometimes car dealerships can take advantage of people with shaky credit scores.

A recent post from Edmunds.com highlighted a scam that some car dealers have used called “yo-yo financing.”

What happens is that the salesman will approve your credit and let you sign the papers for the car. A few days later, they’ll call you back and say the financing fell through and you have to re-sign at a higher interest rate.

The dealer lets you take the car before the financing is actually approved. When the consumer returns, they’re faced with a higher interest rate and often times and a larger down payment.

Related: According to test results, you have a great chance of getting hurt — or worse — driving this car

Dealers use “spot deliveries” to let the consumer sign the paperwork and leave with the car before the financing is actually complete. Some states have laws in place to prevent dealers from changing interest rates once the paperwork has actually been signed, but that’s not the case everywhere.

The article advised people with credit scores under 680 to obtain preapproved financing to avoid spot-deliver issues.

“Those consumers wondering if their dealership financing is final should ask to see a copy of the confirmation from the finance company. Also, be wary of signing any additional paperwork or ‘conditional’ boxes in the contract. These might allow the dealer to rewrite the contract under different terms.”

Many people look to buy cars around the holidays when many dealerships are running events for the end of the year. If your credit score isn’t ideal, make sure you are conscious of a dealership potentially running this scam on you.

Don’t fall for this car dealership scam Joe Raedle/Getty Images
Cole Frederick About the author:
Cole Frederick is from a small town in Alabama, and he graduated from the University of Mississippi with a degree in journalism. He loves all sports - especially football and basketball - and quotes The Office frequently.
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