Top Menu

The Car Trade-In Payoff Scam

There have been some changes to the Auto Industry have surfaced some of the worst of car dealer scams, the Car Trade-In Payoff Scam. There has been reports of car dealers pulling a scam by telling the customer that they are paying off their Trade-In as part of their new car purchase, but they are not. The customer then gets a call from the original lender saying they are past due on their payment from the trade-in. The customer says that they traded the car in and the dealer is going to pay off the balance on the car. The lender informs you that you are responsible for the loan and they still owe the amount on the car. The Car Trade-In Pay off scam.

Car Trade-In Payoff Scam – Now What

The car dealer has parked the car (supposedly your trade) in the back of their lot and never included the vehicle as a trade-in or the payoff of your trade-in on the paperwork.

The result is as you bought a second car, you now have 2 cars and 2 payments. In reality you are responsible for both cars and both payments. You call the dealer only to be told that your car (the Trade-in) is in their lot and they thought you were going to pick it up weeks ago. You have no recourse with the dealer because it was never part of your paperwork.

Get The Facts When You Trade-In Your Car

Get The Facts When You Trade-In Your Car

How Does This Car Trade-In Payoff Scam Happen?

This scam sometimes happens when you are upside down on your trade (owing more than the car is worth).

This car dealer scam will present you with a payment than seems reasonable to you and probably close to what you were paying. The reason is seems acceptable is because they have not included paying off your old car. When you question them about the paperwork not showing your Trade-in, they give you a story about the lender wanting it done that way because you are Upside Down on your Trade-in. The dealer only shows one large number to finance. You figure that sounds reasonable and you get a new car. You go ahead and sign the paperwork and get scammed.

Car Trade-In Payoff Scam Results

You now own 2 cars and are responsible for 2 payments.

How To Protect Yourself From This Car Trade-In Payoff Scam

*Most importantly choose a reputable dealer.
* When going over your paperwork make sure your Trade-in is listed. The year, make, model and VIN . Make sure it shows the agreed amount for your trade and the amount owed that the dealer will be paying off to the original lender.
*I have said it before, but I will say it again. READ, READ, READ your paperwork. DO NOT SIGN any paperwork, contracts or anything that you are not clear and comfortable with. If the car dealer cannot show and explain to your satisfaction DO NOT SIGN.

This scam will sometimes happen when the dealer knows they cannot get you financed for a new vehicle when they include the negative equity of your trade-in. This way they have sold you a car for an inflated amount that you may justify because you think you negative equity is included.

When you return to the dealer to straighten out the situation they ask for your paperwork and there is no trade-in listed. You have been Scammed.

You are a Victim of the Car Trade-In Payoff Scam

There have also been situations that the trade was included on the paperwork and the dealer is having a rough time financially in this current market and has not paid off your trade-in.
This scam can be a messy situation and can involve late charges, penalties and damage to your credit score. If you cannot get this ironed out with the lender and the dealer quickly you may need to get an attorney involved.

You can also contact:

The Better Business Bureau or The Attorney General for your state.

Note:This is not common practice for Car Dealers, but it has happened to many unsuspecting buyers.

Get out FREE Newsletter and get the Best Price on a New Car

, , , , , , , , ,

No comments yet.

Leave a Reply

Powered by WordPress. Designed by Woo Themes