posted on Feb, 2 2009 @ 07:27 AM
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.