What to do if the dealership wants to cancel our lease contract after driving it for 10 days

If you are a regular reader of this blog, you know how I feel about car sellers.

Most are good people…

I hang out with a few of them.

They have typical American families… with a dog, white picket fence – even eat apple pie.

The best part is they are totally fun people to talk with. Because they have the gift of gab.

And they all have stories. Some have GREAT stories.


Most do not go into the car selling business by choice. Instead, they hit a rough patch in life. And car selling is often the last resort.

I find a lot of car salespeople start off with good intensions. They truly want to help us get a great car at a great price.


Honesty flies out the window about 2 weeks into their intensive sales training.

Because their bosses brainwash them. And they are trained to use military-grade, psychological warfare against us to sell more vehicles.

Squeezing the most profit out of us is their ultimate goal.

Some will throw their grandma under a bus if they could make an extra few hundred dollars at it.

Oh well.

It is the system we live in:

Winners win.

And losers lose.

But armed with my KTL USA At-Home Leasing System, I reveal how to cut through the nonsense. And we turn the tables on dealerships: we just want to get the darn car at a fair price.

As a result, we usually win.


A small minority of dishonest car sellers kick it up a notch.

They go well beyond small white lies and deceptive business practices.

Some flat out lie in the most despicable way ever.

Introducing the most devious car sales hustle ever – the “yo yo scam”

One way they do this is by engaging in the “spot delivery hustle.”

Insiders refer to this as the yo-yo scam.

This hustle is easy to recognize. It goes something like this:

I leased a new car from a California dealership.

Exactly 9 days later, I received this in my mailbox at home:


“… we were unable to assign the contract to any one of the financial institutions with whom we regularly do business under an assignment acceptable to us.”

Here is the problem for us: the lease agreement states that if the dealership cannot find a lease finance company to buy the contract, the car is to be returned.

lease agreement cancel verbiage.jpeg

They will issue us a letter titled, “Notice of election to rescind”…

I know, I know. Crazy!

You would think that signing lease paperwork means we are approved… especially after driving the car for more than a week, right?

But it does not.

You would think computers and the internet would know if we are approved for lease financing in nanoseconds, right?

(Apparently not.)

The fine print in the lease contract (that no one reads) clearly states that the lease is “subject to financing”. There is a clause that uses words like “Conditional Delivery Agreement.” That is, the contract is void if the lease finance company ultimately declines our lease application.

This spot delivery hustle usually preys on those with bad credit…

But in the example above, the person had great Tier 1 credit. So we are all vulnerable to this.

And in every case, the law is on the side of the car dealers.

Even worse, we could be sued for high rental fees and/or charged for excessive wear and tear if we do not agree to rewrite the lease.

The worst part is for those who traded in their car. The dealership might have sold it (and sent it to auction). So now we cannot “unwind’ the deal even if we wanted to – we would have no car in the end.

If you are a KPT client of mine, you knew ahead of time to only accept delivery of your new car once financing was approved… once it is locked in.

But if you skipped that part, feel free to borrow my suggested tactics to turn the tables on unscrupulous car dealers:

Do not reply to their demands

Wait it out.

Continue driving the vehicle (and park it in a secure area – like a garage)…

Or park it away from the house.

When parked, remove the license plate. Because if a tow company repossesses the car, they ID it with the plate number. (Obviously, if you ordered the car with LoJack, they know where your car is at all times).

Once the first payment coupon arrives in the mail, I would pay it right away. Or if you signed up for auto pay, look at your records for the completed transaction – it should come about a month after signing the car lease.

Once the payment clears, you are now officially “approved’ and (should) have nothing to fret about.

Contact the leasing company

Reaching out to the leasing company and confirm that you have an account. Ask if they have funded the deal and are the owners of record. If that is the case, then you should let them know about the letter you received from the dealership and get their feedback. Ask them to reach out to the finance manager you dealt with.

And then call dealer and let them know you confirmed account with HFS and see what they say. It might just be an honest mistake.

Hire a lemon law lawyer

If you get many requests to get your new car back, search for a local “auto fraud” or even “lemon law” lawyer near you.

Car dealers pull off this hustle, because it works so well. And the law protects them, too…

Most people rush to contact the dealership to work things out. And usually, they are forced to either pay higher interest rates, buy unneeded upgrades – or both.


Once thing that FRIGHTENS car dealerships are:

– blood thirsty lemon-law lawyers…
– state-government consumer advocates…
– bad reviews on Google.

(By the way, a bad review on the Better Business Bureau is worthless. Their rating system is seriously flawed. Because they have a pay-to-play program that lets dishonest companies pay a monthly “fee” to erase bad marks. Those fees range from several hundred dollars to up to $10,000 a year.)

So, when we are represented by an attorney, the dealership (usually) drops the case (and lets us keep the car using the current lease contract).

These days, our favorite search engine makes it easy to find lawyers that specialize in fighting spot delivery hustles…

Search for something like this:

“auto fraud” lawyer in Pennsylvania

(Of course, replace my state of Pennsylvania with your state. Lawyers can only represent clients in their state.)

Represent yourself

If you cannot afford a lawyer, there are a few tactics that have worked for people in the past:

– Ask for a copy of the letter denying financing at the agreed-upon terms. In most cases, the dealership will not be able to produce this. And we will never hear from them again.

– Tell them you will be back in a couple weeks when returning from a road trip. Hint that it will be at a place that is at least 500 miles away. Why? Because returning a new car with over 1,000 miles lowers the perceived value of the car.

– Visit the dealership. Get a ride in another car (as they can repossess your new car if it is on their lot). Ask them what is involved if you decide to give them their car back…

Of course, we are bluffing here. If this is a spot-delivery hustle, they are just looking to squeeze more profit out of us. By offering to return the car, we are now hustling them back. Because the VAST majority of new car buyers who fall for this hustle are emotionally tied to their new car.

(Remember: emotion is the enemy of making good decisions.)

At the same time, they might REALLY want the car back. Maybe the finance manager made a colossal mistake in the paperwork. And the General Manager forced the F&I office to get your car returned and the lease canceled.

If this is the case, and they call your bluff and want the car back, here is what I would do. I would reply with something like, “Okay, I will let my lawyer know about this, and I will let her decide what to do here.” Then I would calmly (and slowly) walk out of the dealership.

If someone runs after us to “work something out”, do not look back. Just leave. This is great news. It probably means they were bluffing all along.


Help!!! I got a verification letter from my leasing company just after getting my car. They asked questions about my income – but I am unemployed. What should I do now?

This seems like a spot delivery hustle, but it most probably is an income income-verification problem. It is not a scam, because odds are great that someone lied about their income on the credit application.

Of course, income is usually in the form of a job. But some might generate steady income from investments or from self-employment.

Bottom line: leasing companies need a steady income of at least $20,000 a year. That is right around minimum wage. The leasing companies require a pay stub (paper or electronic proof). And entrepreneurs can use the last 2 years of tax returns as proof of income.

If I got a letter like this (and lied about my income), I would do the following:

I would stop driving on the spot. Instead, I would visit the dealership and talk to the F&I manager. This is the person who handled the lease paperwork…

If I could not rub two nickels together, I would have the manager “unwind the deal.” The lease contract has this provision. It states if the dealership can’t find a sales finance company to buy the contract, the car is to be returned. The dealership can (and will) charge a fee for returning the car (hundreds of dollars plus a certain rate per mile). And I would pay this, because not paying it is going to kill our credit score.

If I had a few thousand dollars of savings available, I would offer a down payment to save the deal. I find $2,000 seems to be the amount needed to fix the issue. The lease will need to be rewritten and signed. And to protect ourselves, I would have the down payment tagged as a security deposit. This way, we get the money back at the end of the lease. Plus, a security deposit is untouchable if the car is totaled or stolen.

The worst-case scenario is to get a one-pay lease. Like the name suggests, we pay all the lease payments up front. There are no discounts for prepayment… but it should fix this situation.

UPDATE: According to an article published by Raymond G. Ingalsbe on the FTC website, spot delivery scams (or yo-yo scams) is flat out theft and are illegal. Click here to read all about it.