Car Dealers - Not Paying Off - Trade In Loans - People having Cars Repossed and stuck with Old and N

This kind of stuff - infuriates me - business people - screwing over trusting "regular" person! This is NOT right!

Seems, when people have traded in their cars for new ones, many Car dealers - who have gone out of business, NEVER PAID OFF the traded in Car loan. Those people who bought "new cars" are stuck with the old loans - even though they do not have the car anymore. Plus those who bought those cars - have been having them repossed - due to the "old loans" not being paid off!

This is sickening!

link to article: finance.yahoo.com...

The national wave of auto dealership closures has come crashing down on thousands of people who are on the hook for used-car loans that dealers were supposed to absolve.

When a car buyer still owes money on a vehicle he is trading in, the dealer promises to pay off the outstanding loan, then resells the vehicle. But as more dealers go out of business, some are sticking consumers with the bill. Lenders can then go after the previous owner who thought the debt was paid, or repossess the car from the new owner who assumed it came with clear title.

About a quarter of all car buyers are vulnerable because they still owe money on their trade-in or lease when they buy another vehicle, according to industry tracker Edmunds.com. It's become more common for a driver to owe money on a trade-in as people stretch their car payments over six or seven years to make them more affordable.

The article has much more information with what states are having problems etc.

This is a warning to those, who are looking at trading in and purchasing a new car......

I would not leave the dealership, UNTIL I see them send in an electronic transfer or whatever they have to do.

I know they would probably say "Oh, it has to go through a process and we can not do it right away" - my response would be "fine, I will come back, tomorrow or the next day - to confirm it has been done, and would want to see the paperwork, of the confirmation of payoff".

"You've got to check out the dealer's financial health as best you can if you're going to let them handle your vehicle resale," said Jesse Toprak, executive director of automobile industry analysis for Edmunds.

Officials are having trouble helping consumers who still owe money on trade-in vehicles if a dealer defaults, said Mary Lobdell, an assistant attorney general for the state. For now, they are advising consumers to hire attorneys and seek a share of the dealer's $30,000 bond.

I read about that in the paper last night. That's just insane! Everyone is trying to screw the average joe, instead of taking responsibility themselves.

On my local news there's a car dealership running commercials that says you can buy a new car today and if you encounter money troubles, they will buy back the car and it won't affect your credit. RIGHT! More like spend your money with us now, and you'll get screwed later, but we don't care.

Sounds like some people need to read their paperwork better.

The first thing I would is get a lawyer, when you buy a new car the dealer signs a paper that they have an obligation to pay off the loan.

There are going to be lots of lawsuits. It isn't the fault of the consumer the lenders are going after 'regular joes' because like I said earlier most people don't read their paper work. And they know they can get the car and sell it for more than the loan is worth. So yes regular joes are getting screwed.

If something like that was to happen to me I would call the cops and if the repo guy hooks up my car to repo it I would have him arrested for stealing.

If we did that to someone they the Police would have us in jail.
This is just another thing where government lets company's get by the laws.

And it is not only going on with the Car dealers.

Here in Missouri they have people who are losing there homes to the same thing. Holding company's are taking the payments on the homes and not paying the banks!
There have been quite a few people who are in a mess over this.
They told the owners it was there fault for not checking on the company's health. Wait , can I go down and have a company open it's book for me to see if they are doing well or are doing the work in a legal way? NO I can't , that is no allowed.
Give me a break , how much longer are the people going to let company's get away with this.
I can for see a real disaster coming over all of this. When enough people get the shaft and lose all that they have worked for there is going to be a real fight. And no one is going to just let it go, they are going to go after the ones who have been getting away with things like this.

reply to post by Hastobemoretolife


Actually, it sounds like they were supposed to pay off the loans per the paperwork but just didn't do it. The paperwork is not the problem here. This is a case of "the average joe" screwing "the average joe".

I'm surprised that the lending institutions have any right whatsoever to go after the people for a loan they didn't take out. I think I'd have to ask to see the note with my signature on it before I even attempted to go further with the legal aspects of it.

I cannot figure out how the new buyers are getting their car licensed without a clear title. In other words when I bought my used car last year the previous owner’s wife had not signed the title meaning I could not legally license the car or even title it in my name until the title was cleared. I have the title now and it has my name on it with the lien holder as the back I have the loan through.

As for the trade in we watched out bank account and made calls until we seen the transfer take place of them paying off the old loan. This payment can take a few days (due simply to paperwork) but I would not expect it to take longer than a week, so I would not expect it to be paid off before I drove off the lot.


The paperwork (if I remember reading it correctly) states plainly that the dealership takes responsibility for the previous loan. A good attorney could clear things up quickly.

Raist

Spend Spend Spend. Then blame it on the seller.

Seems to me the US population needs somone to manage there money.
Why buy a car and not have then cahs or income to pay for it? We have been looking at houses for sale in the US (we are from Canada) and we are amazed at the sizes of houses!!!

I think maybe it's alot to do with Glutony!

Ever tried cash?

This happened at one dealership stop overreacting.

If this happens a lot it means we're F'd.

Originally posted by ConservativeJack
This happened at one dealership stop overreacting.

If this happens a lot it means we're F'd.

Excuse me, you obviously did not read the article, because right here in it, is this:

DMV spokesman Mike Marando said the agency had 319 open investigations on dealers for failing to pay off liens or register a vehicle as of December, up from about 200 cases at the same time a year ago. It fielded 1,655 vehicle-transfer complaints against dealers from July to September, nearly double the number of consumer complaints for the same period in 2007.

Complaints also are rising in Florida.

Between March 1 and Sept. 1, 2008, Florida officials deemed valid 103 complaints regarding auto dealers' delinquent loan payments. By comparison, there were 37 confirmed complaints during the same period in 2007.

Originally posted by unruly1
Spend Spend Spend. Then blame it on the seller.

Seems to me the US population needs somone to manage there money.
Why buy a car and not have then cahs or income to pay for it? We have been looking at houses for sale in the US (we are from Canada) and we are amazed at the sizes of houses!!!

I think maybe it's alot to do with Glutony!

Ever tried cash?

What are you talking about?

This is not the buyers fault here. They have the money and are paying their current loans. They were not aware however that the car lot did not pay off the old loan on a trade in made on a new sale. It has nothing to do with the buyer getting their car reposed because the former owner (really the car lot) did not make the payments. This is about the negligence of a car lot not paying their bills they owed so it is affecting their customers.

Again it is the problem of the car lot and not the customers in this case. Nowhere did I read the people were mad because they bought a car they could not afford. What I did read was that people bought a car they could afford and believed the paperwork that states the car lot is now responsible for the old cars payoff.

Reading comprehension is your friend.

Raist

I read the article it was hard to follow.

This is typical America.

Buy a car you can't afford, and trade it in when you can't pay for it anymore.

Then, get a better, newer car, that you can't afford even more.

Originally posted by unruly1
Spend Spend Spend. Then blame it on the seller.

Seems to me the US population needs somone to manage there money.
Why buy a car and not have then cahs or income to pay for it? We have been looking at houses for sale in the US (we are from Canada) and we are amazed at the sizes of houses!!!

I think maybe it's alot to do with Glutony!

Ever tried cash?

What makes you think that some of them didn't pay in cash? Just because the article talks about people who financed a used car, don't think that ALL of them did!

Do you own a car? Did you buy a used car like these people did? Are you glutonous? You are just like these people... don't throw stones...

Throw stones?

I dont live in a glass house. Just take a look at you economy and then tell me it isn't driven by overspending. My policy for 15 years is buy it if I can afford it, No Credit, No Credit cards. Im not in debt and owe ZERO to anybody!

reply to post by Iamonlyhuman

Originally posted by ConservativeJack
I read the article it was hard to follow.

This is typical America.

Buy a car you can't afford, and trade it in when you can't pay for it anymore.

Then, get a better, newer car, that you can't afford even more.

Again how is this the fault of the buyer? They traded one loan for another. What makes you think they cannot afford the loan?

Either you are just being self-righteous or just not comprehending the reading at hand. When people trade off cars and a loan for a loan does not mean they cannot afford the loan. I am paying my loans just fine and I traded a loan for a loan.

This is not the buyers fault at all. They signed a paper that says the dealership (read that word again if you need too) the dealership is responsible (yes I said responsible) for the former loan on the trade in. It has nothing to do with not being able to afford the either loan. What it deals with is the dealership not being able to make due on their promise and now lawful responsibility of paying the loan on the trade in.

Your assuming things about the article and people and you know what assuming does.

Raist


[edit on 2/2/09 by Raist]

Yes you are right. I apologize. But come on lets get real. The dealers are also taking full advantage of the system.

But the system has been driven by Over spending PERIOD

I agree there in many cases it is driven by over spending. And the dealerships are on top of that game.

I can drive by car lots that are over stocked and they dealers are begging people to drive one off the lot. This is a case simply of the dealers at fault and not the car buyers though.

Again I do agree that many do decide to get things they simply cannot afford even if they get a second job. The truth is though in today’s economy it is difficult for anyone but a lucky few to be able to buy a car or house with cash. If you can do either more power to you, for those who cannot we use credit. For those not smart enough to use credit wisely they get burned and help to add to the economic crisis we have now. For the dealerships though to play that game only brings things down harder on those who should not be affected.

In other words if I go and trade in a car that I still have a loan on and the dealership signs a paper to pay said loan while I take out another and give them business they should be affected and not me the buyer. I know they paid off the loan on my trade in though because not only did I negotiate that but I watched the bank statements and the loan being paid in full a few days after my purchase.

The dealership is fully responsible for not paying their bills.

Raist

reply to post by Raist



I don't understand, how they are going after the people who traded in their cars. They would have paperwork, showing the dealer was responsible. Something is COMPLETELY WRONG here!

Why is it, the companies keep getting away with screwing people, why is it justice is now working?

How come those dealers aren't ultimately responsible - even if they have gone under. Tell the banks - go after those companies that owned the dealerships - not me.

The govt. needs to get involved here, and set things straight!

I am sick - of the banks getting away with what they are - because they are getting away with this, by going after the innocent people!

That is true as I mentioned I cannot figure out how the reposed cars even got titled and licensed to the new buyers if the titled was not cleared prior to them buying it.

I think the owners of the car lots need to be charged as it is their problem and not the person who did the trade in. These are legally binding documents after all that they are signing. It is odd how normal people are held to the legally binding documents but dealerships are not. I say take the dealership owner/owners homes and cars to pay the bills they did not pay.

I am sick of hearing about people getting screwed over by businesses that only care about the mighty dollar.

Raist

reply to post by Iamonlyhuman


It is the banks. The dealerships have good relations with banks, because they do so many loans with them Dealerships get a percent of the APR. They call them points. So if I sell a car and the person buying signs on the dotted line for 8% the Dealership gets anywhere between .5% and 1% of that APR.

If the company that the buyer had a loan with wasn't informed that the buyer sold the car the Lender is going to come after the buyer and take their new car.

The lender is outright stealing the new car. There is nothing more or less to it. When you buy a new car you sign responsibility for the note over to the dealership the original lender is informed of this, but the lender still goes after borrower because they don't want a bad relationship with the dealership.

It is kind of like biting the hand that feeds you.

I used to sell cars and even though all legal obligation is signed over to the dealer and the original lender knows this, they still go after the borrower.

It is screwed up. It is the lenders that are at fault for not going after the person responsible.

reply to post by Hastobemoretolife


There is something COMPLETELY wrong with that!

How is that allowed to happen?

If the paperwork shows the car was traded in and it was the responiblity of the dealership to pay it off - the bank should NOT BE ALLOWED to make the old owner pay for what is left of the loan.

One question:

Why aren't lawmakers getting involved in this issue?