Spot Delivery
The practice of “spot delivery” occurs when the buyer and dealer sign the installment sales contract and the buyer takes delivery of the vehicle “on the spot,” prior to the seller obtaining financing from a lender. The dealer then may require the buyer to return the vehicle or sign a new contract if they are unable to obtain financing.
It is the position of the Department of Insurance and Financial Services (DIFS) that once a motor vehicle loan is closed and the buyer takes possession of the vehicle, the dealer cannot rescind the contract or request the return of the vehicle for any reason. Dealers are required to ensure all conditions related to the closing of an automobile purchase be met prior to the borrower’s execution of the contract. If the dealer is unable to secure financing, the dealer must accept payments from the borrower at the same or better terms until they can secure financing on the borrower’s behalf at the same or better terms.
New loan documents should not need to be resigned nor should any terms of the contract change from the original terms.
As a general rule, once the customer signs the RISC and takes the vehicle off the lot, the sale is final.
- Dealers cannot make “conditional” financing.
- Dealers must ensure financing is secured before delivery, or be prepared to carry the contract themselves.
There are some limited exceptions, such as, if customer commits fraud by lying on the credit application. If taking back the vehicle in this type of situation, you must clearly document that the customer committed fraud and this is the reason you are demanding the vehicle be returned. Even in this instance, there are steps that must be followed to legally reclaim the vehicle.
Additional reminder: Along with the usual stack of paperwork your customers sign, include the TR-210: Notice of Assignment of Secured Interest in a Vehicle. By completing this form, the purchaser authorizes the dealer to be identified as a secured party on the title to the vehicle if the original lender listed on the original RD-108 decides not to finance the vehicle.
Reviewed 06/2025
