» Posted July 25, 2016 Resources | Share This Post
Many people buying new cars have a trade-in when they go to the dealer. In some cases, there is still an outstanding loan on the car being traded in. When there is a lien on a vehicle, a car dealer may agree to pay off the loan or lease on the trade-in so the dealer can get the sale. This is convenient for consumers, as it can leave the details of the final payment up to the car dealership rather than having to take care of it on their own.
Unfortunately, NJ.com reports that some unscrupulous dealers can scam customers when they enter into a transaction with this type of arrangement. The problem is, the dealer can end up not paying off the car loan despite promising to do so.
If a car dealer doesn't pay off the loan as promised and a payment is late or missed, this could harm the car owner's credit. It could also lead to late fees, higher interest charges, and a host of other issues that the borrower will be forced to deal with.
A failure on the part of a dealer to pay off a loan on time as promised is just one example of how a car dealer could end up harming a customer. When a car buyer is affected by an untrustworthy dealer or is damaged because a car manufacturer sells a vehicle with defects, a Los Angeles lemon law lawyer can provide assistance in taking action.
Car Dealers Can Harm Consumers By Not Paying off Loans
NJ.com reported on a man who had purchased a 2009 vehicle for his wife to drive. When his wife proved uncomfortable with the manual transmission, he decided to trade in the car rather than returning it to the dealership. He went to a different dealer and they worked out a deal to trade in his wife's vehicle for a used car on the dealer's lot.
The man wanted his car loan paid off and said he would make the trade and buy their car only if the dealer agreed to ensure the loan on his wife's car was repaid by April 11, when the payment was due. The sales associate and sales manager agreed; however, the man said they failed to provide clear answers when they sat down to do the paperwork for the sale. He pressed them to call and was told they'd take care of the loan payoff when the paperwork was done. However, that didn't happen.
The car buyer said he returned the next day because of concerns that the dealer wouldn't pay off the old loan, and that he called a week later to get an update but found the loan still had not been paid off. He asked a police officer to escort him to the dealership to push for reconciliation, but the manager said everyone's time would be wasted. He did, however, learn the dealer had called the financing company to get the payoff amount.
Unfortunately, three days before the payment was due, the car buyer found the loan was still open. He returned to the dealership with a police escort and was provided with a copy of a signed check illustrating the payoff amount. He remained concerned, but didn't pay his loan payment, and he called the lender on April 18.
It reported a check had been received (with a different number than the one shown) but was unsigned and returned. Repeated efforts to follow up were to no avail as the dealer would not return his calls. NJ.com tried to track the money, and spoke to the dealer who indicated they had done nothing wrong. At the time of publication, however, the car loan had still not yet been repaid.
This case shows how difficult it can be for a consumer to deal with car dealers and car manufacturers when problems arise. If the issues relate to lemon vehicles and related vehicle defects, a lemon law lawyer should be consulted for help as soon as possible.