Customers Buying Cars Dealers Don't Own
When is buying a used car from an established new car dealer actually the receipt of stolen property? When the dealer didn’t pay off the previous owner’s loan. The New York Times has tales of the woe car buyers are facing thanks to now-shuttered houses of ill-repute. Vacaville Ford, for example, sold Diana Foley a used 2006 Lincoln Town Car taken in on trade. Ms. Foley was probably feeling smart for saving herself the massive initial depreciation on a Town Car. Lttle did she know that Vacaville Ford never paid off the prior owner’s loan balance and didn’t own the car it sold her. Now Diana has a car in her driveway she can’t register and doesn’t really own; the prior owner of the Town Car still owes money on a car they don’t have anymore and Vacaville Ford is boarded-up. “David Paulson, the Solano County district attorney, is prosecuting Vacaville Ford-Mercury for similar fraud involving an as-yet-undetermined number of consumers.” Thousands of miles away, the attorney general’s office in Arkansas has sued McKay Hyundai of Pine Bluff on “charges that the dealership violated consumer protection laws by not paying off loans or by selling nonexistent extended warranties to at least 40 people.”
With over 900 new car dealers having gone bust last year alone you can be sure there are countless more cases of fraud and double dealing going on. Bankers involved in these deals also share liability for funding the dealerships and the car loans without making sure everything was on the up-and-up. These banks must know they are in hot water, as Arkansas Assistant Attorney General has said “some banks have been willing to let Arkansas consumers off the hook by handing over the title and accepting the loss.” I’ve never seen a banker roll over just because it was the nice thing to do, so we can assume they wrote off the unpaid balance to avoid an even more difficult situation. No matter who you are doing business with, Ronald Reagan’s maxim remains the best advice: “Trust, but Verify”. Make sure you have a clean title in hand before handing over any money.
More by John Horner
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Had this happen once, in Newark, NJ. Client bought a car from a "curbstoner". (guy who sells used cars for a living or at least extra $ but without a dealership or indicia of being "in business". The Tercel came up stolen-after the buyer registered the car, NJSP showed up to check the VIN numbers and it was hot. We sued the seller. He, like all car dealers I have ever intersected with professionally, denied everything and fought to not only the Courthouse steps, but every dilatory tactic and up to Trial. The Judge was no nonsense and gave my client Judgment for the car. Which the dealer then paid. I find it interesting that if you do go all the way and get Judgment, the dealers then pay up. They will stonewall you all the way if they can get away with it, and are NOT afraid of attorneys or lawsuits. They do the "call back" game with new cars, too. A family member bought a car (Toy MR2). The payment book showed up a bit higher than the agreement. Dealer says "come in, we will discuss it" and "make one payment and we'll work it out". I called, and said I'd happily come in, but to drop off the car for good, as it is clear that the deal is rotten, and with the untouched and unpaid payment book. My next call was to be to Toyota Finance where the F & I guy calls me, apoligizes for the salesmen, and fedexes me a corrected payment book. What was clear were the two salesmen who tried to talk the family member into this were anything but "mistaken" or "in error" about what they tried to pull off. Don't ever buy a car where you don't get title. Period.
If she paid cash a title should have been produced. If it was financed the finance company would have insisted on a title before forking over a check. If she financed it through the dealer in house, good luck with that. They could take her down payment and not even give her a kiss on the neck.