"We work hard to try to find loans for these folks," Moltz says. "We don't win in a situation like this. He doesn't get a car and we don't get a car sold."

Car Center says in court documents that the dispute should be handled through binding arbitration.

Maryland's attorney general has received 12 complaints so far this year about yo-yo financing, compared with 20 for all of last year.

That's not a huge number, but consumer advocates say customers often don't know their rights — or where to complain.

Auto financing differs from state to state. In Maryland, dealers aren't supposed to put temporary tags on a car and let a customer drive off the lot unless the sale is final.

"All the financing is supposed to be in place," says Sherman Swartz, a section manager for the investigation division of the Maryland Motor Vehicle Administration, which handles these cases.

And dealers also aren't supposed to use supplemental contracts that say the customer "shall return" the car if the financing isn't approved. These are sometimes called MacArthur agreements, referring to Gen. Douglas MacArthur who vowed "I shall return" when ordered to evacuate the Philippines in World War II.

Customers, however, must give back the car if a loan has been denied because they provided wrong information on their application.

The MVA has spelled out the rules in periodic bulletins to dealers over decades, but Swartz acknowledges the dealers often don't follow them. He says his office doesn't get lots of complaints on yo-yo financing. It tends to hear about the most egregious cases, he says, and not about all the times that a dealer and customer worked out a compromise.

Peter Holland, a lawyer who runs the consumer protection clinic at the University of Maryland, says the rules are clear: "If you have a contract signed saying you own it, then you own it."

It's not unlike buying a house. "If you were buying a house, they would never give you the keys and say, 'We will find out if we can get you a mortgage,'" Holland says.

Car buyers can avoid these problems, lawyers say, by getting their financing elsewhere.

"Try to get financing before you enter the dealership," says Jane Santoni, a Towson lawyer representing Carter. "The credit union is the best place."

If you do get a loan through a dealer, don't sign a supplemental contract indicating the financing isn't secured, Santoni says. Instead, she says, demand that the dealer put in writing that the financing has gone through.

"Don't let yourself be rushed through this," Santoni says. Many consumers get into trouble signing documents they don't understand, she says. "Be strong, take these home and take a really good look."

Jack Fitzgerald, an auto dealer with stores in Maryland and other states, says consumers should never leave the dealership until they're sure the contract is completed.

"It's unfair to let customers leave thinking they bought a car, if you don't think they bought a car," the dealer says. "It's a two-way street. If the customer is bound (by the contract), you're bound."

If you encounter problems, contact the MVA at 410-768-7541 or the state's consumer protection division at 410-528-8662.


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