How To Buy A Car With No Credit Or Bad Credit

“We Forgot To Pay Off Your Trade-In”

You trade in your old car which you still owe money on, and the dealer is supposed to obtain a payoff figure and payoff the loan for you and add that payoff amount to your new car purchase. But something horrible happens. Some time later, you are shocked to hear the new car dealer did not pay off your old car loan as promised.

With this scam, dealers effectively pay you less for your trade than they promised or steal it altogether. When the bank calls, YOU are responsible for the loan, not the dealer. The car loan is still in your name, until the dealer pays it off. As far as the bank is concerned, they have a loan with YOU, not a dealer and it's in your name until paid off.

Then, your credit gets dinged with late payment alerts from your bank. If you try to sue the dealer, the judge will ask to see your contract with the dealer obligating them to pay off your old car loan. Of course there will be no contract and you are making twice the payments or ruining your credit.

To avoid the scam, it is recommended first that you not buy a new car when you still owe money on your current car. If you pay it off yourself first, you can get your title from the bank, and then trade it in or sell it privately.  Then you can pay off your loan with sales proceeds.

When you trade in a used car on which you still owe money in order to buy a new car, make the dealer put in writing that he will pay off your car loan in 10 days, or there’s no deal. Then the dealer is liable in court for that payoff. You don't want to end up in court without proof that the dealer was supposed to payoff your trade-in.

If the dealer refuses to put these promises in writing, it means they will probably pull this scam on you, and you need to leave immediately, taking your business to a more reputable dealer. It's the same with houses and cars, if you call for a payoff figure, you typically have 10 days to pay off that loan or interest will accrue. Most dealers are good, but a dealer who pulls this scam should know better.

>>>  Table of Contents  <<<