What can I do if the loan on my trade-in has never been paid off by the dealer?
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What can I do if the loan on my trade-in has never been paid off by the dealer?
I bought a car with a car loan and drove it for a year. I then didn’t want it anymore so I brought it to a dealer to trade it in for a different car. When the trade in went through, I was told that my car would get “sold” and the bank will get their money. The car was sold to a young kid; I have the paperwork for when the car was sold to him. It’s been 8 months and I’ve been paying 2 car notes. One from the orignal car and the new car they gave me. The dealer won’t write me a check to pay off the car.
Asked on June 2, 2015 under General Practice, New York
Answers:
M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney
Answered 9 years ago | Contributor
If a dealership agrees to pay off your existing loan (even in writing), there is no guarantee that it will do so. It might be a dishonest business or it might be having financial difficulties, etc. And, has you have unfortunately found out, regardless of the reason that the dealership has failed to pay off your loan you are still responsible for payments to the lienhiolder (i.e. the auto finance company, bank, etc.).
What you need to now is to consult directly with an attorney to see what option is open to you. The fact is that you may have legal recourse under the Federal Trade Commission’s “holder” rule. You may also have remedies under state law. Additionally, you my want to contact your state's Attorney General's office to see if you can file a compliant and/or get help in resolving this situation.
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