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!

Answer
“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.”
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Rachel Juillerat
Answered on Sep 10, 2021
Rachel Juillerat has her Master's in Publishing & Writing from Emerson College. You can view her work in the Independent, Cupid's Pulse, and the Penmen Review. She has worked in personal finance for five years before transitioning to insurance. She lives in Boston, where she spends her time exploring small New England towns, learning new skills, and napping through her cat's zoomies.
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