It seems that some people that are trading in a car when buying a new car are getting screwed. With the large number of car dealers that are going out of business, some of their customers are left holding the bag. If you still owe money on your car when you trade it in and the dealer is going to take care of the balance of your loan, they don't always manage to follow through.
I can't remember ever trading in a car that was not already paid off, so I am not real familiar with the process. Some people have traded in cars with the arrangement that the dealer would pay off the remainder of their loan. If that car dealer goes out of business, they may not have paid off your loan and you are still on the hook for the balance of the loan. This can even happen if the dealer has sold the car to a third party. In some cases, the lender will go after the third party and repossess the car because they still have a lien against it. I guess the buyers aren't looking at the titles prior to buying the car to make sure that there is not a lien holder on the title.
In any case, if the dealer goes out of business and is bankrupt, the person that traded in the car is at risk of the lender coming after them for the remainder of the loan. In other cases, they may take away a recently purchased used car from someone that bought it in good faith.
Seems like it should be illegal to me, but I guess the consumer needs to look out for themselves because nobody is looking out for them. I assume that most lenders are banks and the auto manufacturers. They may be coming after you after you dealt in good faith. They can afford to come after you. Thanks to the bailouts, they have plenty of taxpayer dollars to finance it.
Read more about it here
I can't remember ever trading in a car that was not already paid off, so I am not real familiar with the process. Some people have traded in cars with the arrangement that the dealer would pay off the remainder of their loan. If that car dealer goes out of business, they may not have paid off your loan and you are still on the hook for the balance of the loan. This can even happen if the dealer has sold the car to a third party. In some cases, the lender will go after the third party and repossess the car because they still have a lien against it. I guess the buyers aren't looking at the titles prior to buying the car to make sure that there is not a lien holder on the title.
In any case, if the dealer goes out of business and is bankrupt, the person that traded in the car is at risk of the lender coming after them for the remainder of the loan. In other cases, they may take away a recently purchased used car from someone that bought it in good faith.
Seems like it should be illegal to me, but I guess the consumer needs to look out for themselves because nobody is looking out for them. I assume that most lenders are banks and the auto manufacturers. They may be coming after you after you dealt in good faith. They can afford to come after you. Thanks to the bailouts, they have plenty of taxpayer dollars to finance it.
Read more about it here
1 comment:
I agree with your thoughts here. No, the 3rd party wouldn't be in trouble. But if the dealership and/or the bank wants to put all this shit on my head in order to get out of a bit of bad debt after I've traded in a car...I would then return fire with contributory negligence, and wrongful prosecution. That's assuming we need to go to court and contest such proceedings in the first place. With my lack of patience with used car sales personnel, and a half-cocked lending institution involved, we'll be entering a courtroom before all is said and done. Since, I've not forgotten how to write an expose, I'll do my best to make certain the local media is fully informed as well.
If you buy a car that's not brand new, please make certain you've researched the car's history. Any car that's had any work completed has a working history. Yes, I know, that's assuming all body work, mechanical and electrical work was done at a legit auto-body shop. However, the dealership is required to present you with all paperwork on this issue. But you gotta request it. That includes anytime the car in question, has been wrecked too. How is all this shit tracked?...through the VIN registry. So, please make sure you ask before signing your life away to a 3 to 5 year loan at 18% or what have you.
Mr. Couger, this is a great topic to bring up.
Thanks, J.
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