Posted on 02/01/2009 5:53:51 PM PST by Red in Blue PA
SACRAMENTO, Calif. – 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.
"It's devastating for people when it happens because they have two car payments and they can't afford them," said Rosemary Shahan, president of Consumers for Auto Reliability and Safety, a Sacramento-based nonprofit that lobbies on behalf of vehicle owners. "Their credit is destroyed for no fault of their own because the dealer defaulted."
(Excerpt) Read more at news.yahoo.com ...
You’re right, Gordon Greene. I should use qualifiers (some, a few, etc.) where necessary. I should have restricted the mention to a few of the less scrupulous and politically pushy investment bankers, merchants and importers instead of generalizing, “the bankers and their free traitors.” Please accept my apology.
Gee, car dealers screwing customers? Who ever heard of such a thing.
Check back later. The regulators are changing all of that.
I'm really starting to believe that our overlords want one (1) bank, which they and they alone control.
Well, on the “regulators,” I hope that some of the big investment banks don’t do what some of the big lumber mills and developers did with getting too much into government to shut their smaller competitors down (mostly using employees who posed as environmentalists in county and state level meetings, board positions and the like). Many of the regulations devised by well-meaning, idealistic government department heads are more than bad enough (if their are any who aren’t really porking for semi-private special interests).
Except for the fact that the lien would be clearly shown on the title in most states.
I would like for someone to explain to me where I’m missing something here; here’s what I see in this post...
The subject of the story is not the lenders, but the car dealers who did not fulfill their contract obligations and paid off the cars (and have probably not filed the necessary paper work either). The banks have been stuck for the last few years with debt obligations that were not their own because the government strong-armed them into making loans to unqualified recipients. I have been one of those unqualified recipients in the past through bad choices, and I paid back everything because it was my obligation to do so. But I took out the loan so I was responsible.
Seems since the government has gotten on the bandwagon of blaming the banks for the credit crisis, it’s gotten to be the popular thing to do so for the rest of the country, politics completely aside. I do agree the banks should be taking the morons to the cleaners who are causing the issue... the car dealers. But they are probably just looking at paper that tells them who last held the loan. That would lead them to go after the last known owner of the vehicle. If the car dealer was going out of business in the first place chances are paperwork was less important to them than cash in hand.
If the banks have no other recourse, should I suppose they should just go down with the car dealers? I certainly don’t want them coming after me, but like someone pointed out in an earlier post, if the person trading in the car has a contract and have read it then they would know their legal rights in the situation and whether they are signing to be liable in event of the car dealers default. If not, they will show the contract and make an appeal to the bank to cease and desist.
Tell me where I’m misunderstanding...
I wonder how many car dealers would be out of trust if proper audits were sprung on them.
Of course, as long as the money keeps flowing, it’s not really in anyone’s interest to look too closely.
You’re right. Our generalizing complaints about bankers were off-topic for the post above this thread, and I chimed in. ...shows you what “news” saturation on one issue will do to us, when we’re weak enough to carry it to other discussions.
I don’t even directly work concerning the overall economy (certainly not finance or investments). ...only learning about it for a history hobby and to use the knowledge for a small project plan.
Groovy... I didn’t mean to come across harsh. I’m not even a banker; I just play one on TV.
Trading in a car you still owe money on? I’ve never done that in my life and I’ve been buying cars since the mid 60’s. Actually I’ve never even traded in a car, always just sold it myself.
Interesting times. Since some folks have been desperate enough to kill themselves and their families, it’s got be just a matter of time before more than a few figure out it might be more fun to point the gun at some of these vultures instead.
Does anyone know if Edmunds, NADA, and Kelly are really accurate these days?
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Of course not Silly! Those books are printed for schmucks that buy retail, they have never been objective ,, their purpose is to get you thinking you’re getting a good deal on that car and on your trade-in... The only book that you should consult is the black book for the auction house (Manheim etc.) ..
Only a Kennedy, Kerry or a Gates can afford a team of lawyers to translate all the paperwork involved with a car sale into understandable English. And even then they may lie to you to protect their(all lawyers) legal rearends.
Simpler solution. Don't trade in a car with a note on it. Drive it for at least as long as the note.
Won't be long now....
L
...TV, eh? ...another difficult job (sincerely). At the University, Mr. Gomm (me) was part of an unintentionally hilarious scene, and doing a Shakespeare play was traumatizing. :-)
The Galves book still works very well to get a real price and even the small guy like me can go to their websaite and pay a small fee for a trade-in quote. Last I heard, most, if not all, used car dealers still use Galves.
This story IS confusing for the very reason you say. Am ppretty sure my bank would not honor any draft for a new car with trader-in unless the dealer “attached title” and paid off the trade-in. Banks have established proceedures, now maybe the dealer’s car company financier was the one who let the dealer slide.
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