What is a Yo-Yo Scam or a Bushing Scam?

Most consumers don’t realize that the financing they agreed to at the dealership is not in fact final. Why would they? After all, the dealer gave them keys to the car, congratulated them on the sale, and let them drive off. In a bushing scam, however, the consumer receives a call from the dealer some days later informing them that the financing arrangement with some financial institution fell through. The auto dealer then directs the consumer to return to the dealership to either apply for new financing under less favorable terms or to pay a higher down payment. If the consumer refuses, the dealer may repossess the vehicle or report it stolen.

In most circumstances, the dealer is in fact the originating creditor of the installment sales credit contract to the consumer. The dealer then tries to sell the installment sales contract, usually at a profit, to some sort of finance company or bank. When consumers receive these calls, they are shocked. Just when they thought the annoying process of shopping for and buying a car is over, they find out they are now expected to take more time off to finish the purchase.