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Dealership not paying trade-in balance: Can ruin my credit!!!

Discussion in 'Car Sales, Dealers, Repairs, Lemon Law' started by egrizzly, Aug 8, 2018.

  1. egrizzly

    egrizzly Law Topic Starter New Member

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    Jurisdiction:
    Texas
    I had purchased a Nissan Altima from a well-known dealership in Dallas. This was back in last week of June. During the purchase I had traded in my old car which had an outstanding balance of $1400. However, up to today August 8 the dealership has not payed that balance. All I've gotten from them is promises saying that they'll pay it soon and that their transaction "system" is backed up. However as far as my old lien holder (CapitalOne) is concerned I still owe them $1400. They confirmed multiple times that the sole responsibility is on me to pay off the balance even though the dealership has taken ownership of the trade-in vehicle!

    I have complained to them (the dealership) several times that balance on the trade-in is still outstanding but they kept saying it'll be paid, however now I have a severely past due payment with CapitalOne Auto over 20 days past due and now pushing the dreaded 30 days (effective August 15th).

    What the dealership kept saying was that even if my past due payment goes past 30 days and my credit is ruined they'll issue an "At Fault Letter" to the credit bureaus saying it was them that were at fault and that will 100% restore my credit to its original status.


    Question: All this sounds way too shady to me. Is there anything such as an "At Fault Letter" and is this even common practice by auto dealerships during the car sales process? What should I do? The only documentation I have is the contract stating that they included the $1400 buyout from my trade-in into the amount I owe. However I do not have any paperwork stating that they will issue a letter fixing my credit if it gets ruined. After talking to a few attorneys I've also come to learn that sending them a letter would cost $500 dollars minimum.
     
  2. mightymoose

    mightymoose Well-Known Member

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    This is true. You should have signed documents during the trade in advising you to keep making payments in the interim. Having traded in the vehicle does not eliminate your obligation to the original creditor.
    There really is no action to take against the dealer unless you were promised payment would be made by a certain date (which is incredibly unlikely).
    Any harm to your credit score is unfortunately your own suing for failing to pay as agreed.
    What you have described here is very common and not something you should waste any time or money on trying to pursue addiction against the dealer.
    Be patient and the payment will come. Meanwhile, pay Capital One to bring your account current. The dealer will send you a check for any remaining amount they owe you Aster after mthe payoff.
    You might try and talk Capital One into removing any negative marks they have made for late payments. If you were otherwise in good standing with them they might be cooperative, but you will have to explain the misunderstanding and bring your account current.
     
  3. egrizzly

    egrizzly Law Topic Starter New Member

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    You're saying that even though I have a contract saying that the dealer has taken over the payment that it's meaningless? That the paperwork does not legally mean the dealer is obligated to take over the payment?
     
  4. txls

    txls Well-Known Member

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    The dealer is obligated to make the payment. However your agreement with your bank is that YOU will make the payments. Your bank did not enter into any agreement with the dealership.
    So if you want to protect your good credit then you will have to make the payment(s) then take it up with the dealership to get reimbursed. It shouldn't happen that way, but sometimes does. There is a dealer group that operates in TX that recently filed bankruptcy. I don't think they operate in Dallas but not sure. You can file a complaint with the dealer licensing division.
     
    army judge likes this.
  5. army judge

    army judge Super Moderator

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    If you traded a vehicle upon which you owed more than the dealer gave you in trade for the vehicle there is a balance still owed on the car to the lender.

    You traded a car and the dealer allowed $5,000 for your old car, but you owed $7,000 to the lender.

    The dealer sends $5,000 to your existing lender, and the additional $2,000 is buried in your new loan.

    The dealer sends (or someone sends) an additional $2,000 to the original lender.

    Is that what should have happened here?

    Did you speak to the sales manager, finance manager, or general manager about when the payoff will be processed? What did you learn?
     
  6. txls

    txls Well-Known Member

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    Not really AJ. The full payoff is disclosed in the documents. The dealer pays the full payoff to the bank in one payment.
     
  7. army judge

    army judge Super Moderator

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    Yes, that is what normally occurs.

    I've never had a bad experience across those 50 years.

    I watched my dad buy cars as a young boy, and as a man.

    It never happened to him, or any other relative.

    I've bought new cars for 50 years and never had this occur.

    I have been told by a couple of people that said it happened to them.

    I don't speak from experiencing this inconvenient event.

    If it ever happened to me, I'd contact someone in management at the dealership to learn what interfered with the transaction.

    In most cases it could be remedied in short order.
     
  8. egrizzly

    egrizzly Law Topic Starter New Member

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    Hello Army Judge this is the link to the sales contract. I removed all identification information but the useful numbers are still there.

    auto_contract_2018_highlight.png

    To answer your question I believe this is what I'm dealing with:

    - Amount allowed for the old car by dealer (Payoff Made By Seller): $1434
    - Amount I still owed to the lender for the car: $1499.00

    So what I'm expecting is that $1434 be tagged on to the balance I owe on the newly purchased car and that the "Payoff Made By Seller" (of $1434) is what they would be sending to the lender of my original car (the traded in vehicle).

    As they also indicated that the gross trade-in (blue book value of trade-in) is $2000, however the net trade-in was $566 as after they paid my original lender that was the only dollar balance to be applied to the trade-in. Thats how. I understood it. .. although I'll have to confess that I'm an obvious newbie at this apparently. So am I mistaken?
     
    Last edited: Aug 8, 2018
  9. mightymoose

    mightymoose Well-Known Member

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    I highly doubt that is what your document says. Read it carefully.
    That simply is not how trade-ins work. Nothing you described above sesee out of the ordinary.
     
  10. txls

    txls Well-Known Member

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    He traded the vehicle in June so that is out of the ordinary. It should have been paid by now.
     
  11. army judge

    army judge Super Moderator

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    If I were you, I'd start by meeting with (or telephoning) the finance manager.
    You can explain your understanding, and listen to her/his understanding.
    This can be solved very easily if you communicate with the right person.

    It doesn't matter what I think.
    You must find out what the dealership is thinking then work to make sure things get completed.
     
  12. mightymoose

    mightymoose Well-Known Member

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    I don't follow the math in your contract.

    Trade-in= $1434
    They paid you $566
    Net trade in= $868

    It looks like $368 got lost somewhere.
     
  13. army judge

    army judge Super Moderator

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    These amounts They paid you $566
    ...........................Net trade in= $868

    .............................................= $1434

    I don't understand it, but I don't need to understand it.

    The dealership and the OP must understand it.
     
  14. army judge

    army judge Super Moderator

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    I agree.

    When I used to trade this way, it was done in about 7 to 10 days.
     
  15. txls

    txls Well-Known Member

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    No. The allowance was 2000.00 and the payoff 1434.00 which equals the 566.00 they "paid him".
    The only thing that matters at this point is the dealership has to pay $1434.00 to the bank.
    The dealership should also pay any interest or late fees accrued since the time of trade which probably explains why $1499 is now owed.
     
  16. army judge

    army judge Super Moderator

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    That was my thinking.

    He paid $2,000 down, but the dealer gave him $566 back from his trade.

    I'd never do business this way.
     
  17. txls

    txls Well-Known Member

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    Actually the $566 is the net trade. The cash to buyer is N/A. The copy of a little crooked.
     
  18. egrizzly

    egrizzly Law Topic Starter New Member

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    From the con
    I'm constantly calling the Finance Manager. According to what he's telling me he says that "the check" has been mailed to my previous lender (CapitalOne) last Wednesday. However my gut tells me that he's stalling because any letter sent even with snail mail on Wednesday, August 1st, should have been received by Monday, August 6th.

    Plus he says there's no tracking number. For a check of that amount?!? I don't think so! I believe he's stalling and that something fishy is up. I hope for my convenients sake that I'm wrong.
     
  19. mightymoose

    mightymoose Well-Known Member

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    I wouldn't expect a tracking number. The check has no real value. Once received there is processing time to account for as well. I'd expect it to post a week to ten days from receipt.
     
  20. army judge

    army judge Super Moderator

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    Have you contacted C1 to see if it has been received?
    MightyMoose is correct, the check could arrive on Monday in a mail room, and take a day or two to get posted to your account.
     

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