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What is spot delivery?
What does spot delivery mean and is it illegal in Colorado? There’s a car that I want to buy soon, but I’m scared of getting scammed. I heard negative things about spot deliveries and I don’t want this to happen to me. Help!
Rachel Juillerat · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
“A spot delivery allows car buyers to
purchase a vehicle
and drive off the same day before the loan application is approved or denied.In your case, you won’t have to worry about this because spot deliveries are illegal in Colorado and considered auto fraud.
That said if you ever buy a car in another state, spot delivery might be legal there. Spot deliveries allow you to take the car home before receiving an answer from the lender. Unfortunately, if your loan application is declined, you’ll be asked to bring the car back. The dealership will submit a new loan application and it may return with unfavorable financing terms.
Spot deliveries often happen when the dealer knows you won’t be approved at the rates you cited. After your application declines, they’ll ask you for a cosigner, higher monthly payment, higher sales price, or higher interest rate. Because you’ve already driven the car home, you’re less likely to return the car and dealers are more likely to make a profit off of you.
If you are looking to buy a new car in Colorado, keep in mind that each state has a minimum insurance requirement. If you want help reviewing your policy to make sure you meet Colorado’s requirements, try using the
Jerry
app. Jerry automatically reviews your policy every six months to make sure you’re getting the best rates on the coverage you need. And the best part–Jerry does this for free.”View full answer
- Gregory R.
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Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
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