Nightmare Trade-In Leaves New Car Buyer Juggling Multiple Payments
As if buying a new car doesn’t feel expensive enough. One woman in Georgia got a real shock to her wallet after her recent purchase. In October 2022, Lynne Damali went to a local Atlanta dealer, Union City Chrysler Dodge Jeep RAM, to purchase a new Jeep Grand Wagoneer. Part of the transaction included her trading in two of her other cars, both of which had active loans.
In typical trade-ins, the customer exchanges a currently owned car for a reduced final bill on the new vehicle. The dealership would obligate itself to pay off any outstanding car loan balance. The idea is that the buyout would be less than the car’s value. This way, the dealer can turn around and sell the used unit free and clear.
In Damali’s case, after buying her new Jeep and settling into it, she was astounded to find that the dealership made an administrative error. It failed to immediately pay off her other two cars. The results over the next few months were devastating, requiring her to pay for three cars simultaneously.
According to Damali, the debacle included eight bounced checks and a missed payment, negatively affecting her credit score. The dealership’s general manager has proposed settling the issue for more than the extra payments.
KALB News reports that Georgia law doesn’t require loan payoffs to happen within a certain time frame in the event of a trade-in.
How to protect yourself during a trade-in car loan payoff
Few people are aware that the lendee is accountable to a car loan at all times up until the loan is paid off. This means that in the rare circumstance that the trade timing is off, your car loan still needs to be paid.
You can protect yourself from the risk of balancing multiple loans in the following ways:
- If possible, reserve your next car payment ahead of its trade-in day.
- Save all records from the dealership transaction.
- Make a copy, front and back, of the title you signed over to the dealer.
- Obtain written confirmation of the payoff date or timeline from the dealer.
- Pay attention to your loan status, even after trading in your car.
- Be prepared to continue paying your car payment. Submit any extra payments to the dealer for reimbursement.
Source: KALB News