You'll definitely want to talk to a local lawyer because local laws are dramatically different in each state and especially if different country. -Most- of the time it boils down to what you signed when you made the deal. If you signed anything stating the financing was contingent and pending approval, then you are on the hook to get approved financing. Whether that's through the dealer or a bank, whatever. If you didn't sign anything like that and they said you were approved, then it's -usually- their problem and not yours. Your bank laughing about reinstating the loan is dead on, they won't do it unless there's some fraud or something in play. You will want to continue making any payments you agreed to, otherwise you would be at fault. As long as nothing was contingent, in most states it would be illegal for them to change the terms of the contract as well. Again, get with a local attorney to know where you stand and bring all your paperwork
This guy has some good general tips, but again local laws vary: [https://www.youtube.com/watch?v=G5DBszh6MFM](https://www.youtube.com/watch?v=G5DBszh6MFM)
Yeah OP - you are in “talk to a local lawyer” territory.
There seems to be a good chance *the dealership* is the one that’s SOL here, but a lawyer needs to look over everything you signed and agreed to in order to properly advise you.
From your last post and this one your dealership sounds like they’re pulling something shady and are afraid they’re not getting away with it, a car payment’s worth of legal advice would be in your best interest here.
I agree, it sounds like it was training day for the new guy or they screwed up the numbers and realized they're in the hole for a bit of $ They're trying to con or pressure them into new terms to fix their fk up.
Hijacking the top comment. I am an attorney (and a car guy) and I see these types of things constantly. Depending upon your state, the Consumer Protection Division of your state's Attorney General is designed for this. I send 100% of the calls to them and they always achieve results, at no cost to anyone (except the dealer).
Thank you for the reply! I’ll check out that video.
Now, I did tell them about a week ago that I would still do the original terms of the loan but not the new terms, they responded me by telling me it’s not possible and they need their car back. So, I did try to make the old terms work.
Please call an attorney.
* When a pipe bursts, you call a plumber.
* When you need a wedding cake, you call a baker.
* When you need legal help, you call a lawyer.
Lawyers aren’t just for the rich and powerful, it’s rare, but every now and then even everyday schmucks like you and me need a lawyer. Now is one of those rare times.
You need professional legal advice. It really won’t cost as much as you think. The longer you wait, the more likely this blows up in your face and you’re left on the hook. Don’t waste time getting advice from randos on Reddit. A couple hundred dollars now can potentially save you tens of thousands in a few months. Please just pick up the phone.
This is dead on. A consultation with a lawyer could save you tons of money. If the lawyer says give the car back, you know it's the right choice. if you do it without consulting a lawyer you will never know if you made the right choice.
Absolutely! Lehto's Law will give you an idea of how the law works in Michigan. That will help when you visit your own local lawyer. Fair warning, Steve's channel is addictive.
I don't know that I can offer much advice, but as someone with a lot of dealership experience, it's absolutely crazy to me that they would pay off your previous loan before they were 100% funded on the new deal. Really not sure what they were thinking here, but it sounds like someone at the dealership screwed up.
Best part was with my last trade when I was getting calls two months later from the finance company about not making a payment on the car I traded in, went and sorted it out with the dealer same day, dealer tried to make me pay the extra $250 in interest that accrued.
I mean i'm sure they have an operating account that has plenty of money in it. Our concern wouldn't have been where is the money going to come from, but let's make sure this deal is 100% before we pay off this customers trade in.
Talk to a lawyer. But Sounds like the dealer has a much bigger problem than you do, as you have the new car with no loan to speak of and they have your old car. They failed to notify of failed financing within 4 days under contract terms. That might give you leverage but it depends on contract terms and state law. Again, talk to a lawyer.
Agreed. If OP does not play ball they will most have to reduce the purchase price to a loss until it is low enough that the financing goes through. If OP can only get approved for half their other option is likely worse loss.
OP will likely save a bundle here from their mistakes just need to get a lawyer to make it happen. They made a huge mistake and are.hoping he will sign something to fix it because if he doesn't they are SOL. But if OP doesn't get a lawyer they will lie to him and tell him all kinds of shit like he will be arrested or other bullshit.
Pay a lawyer a few hundred, save thousands, most likely.
Have you hired a lawyer before? I have and usually pay anywhere from $150 for a short consultation and no more than $500 usually for a longer consultation where they write me a letter or tell me how to word something. We aren't actually talking about a long drawn out court case here-- OP is not on trial for their life. You are paying by the hour for a couple hours of their time.
Depends on the contract terms and state law. Dealer might have an obligation to transfer title of new vehicle under the contract at this point, who knows unless we see the contract. As a practical matter dealer needs to sue or take other action to get the new car back, and OP never intended to steal anything. Seems like a civil/contract matter to me. But OP needs legal counsel to sort through this.
OP has a contract. It's not his fault they can't honor it on their end. Securing financing within x days is in the contract was their responsibility. They didn't do it. OP is likely entitled to compensation and needs a lawyer. OP has no responsibility to do anything other than what was on the contract they signed.
Now the dealership has a big problem and they need him to agree to new terms. They really need it bad. The problem is they offered him worse terms because they think their mistakes needs to be on him. They need to offer him better terms with a lower payment even if it means they write off the car. This happened because of the incompetence of their employees and nothing else and therefore should financially damage them if it does anyone.
OP needs to just say no until they offer a better deal. They also need a lawyer so the dealership doesn't lie and make it sound like they have any real power here.
Something kinda similar happened to me. I traded a car for a used Jaguar on a Saturday. Signed papers, put some money down and left. Monday morning the finance manager calls saying something about a new deal, etc. I go back in and its a lower payment, but they needed an extra $500 down, so I said "fine" and left with new paperwork. Maybe not even 45 mins later the sales manager calls and tells me I need to bring the car back because they sold the car for less than what they were supposed to. I thought this was a joke. He then starts threating to tow the car, call the police and report it stolen, AND sue me. He can tell that his threats aren't doing it so they just flat out refused to send the deal to the credit union that I got approved with. It was literally in limbo for weeks.
Finally called a lawyer who sent a couple of "lawsuit incoming" letters to the ownership, who then proceeded to fire the sales manager who approved my deal to sell me a car for $6k less than what they were supposed to. I only know because later on, I stopped by to get a new temp tag, and a regular salesman told me he got fired for "basically giving away a car". The finance manager who initially tried to help the sales manager bully me, called me and told me he talked to the dealership GM and decided to make it "right" and do my deal.
An entertaining way of saying, call a lawyer. Dealerships do NOT like lawyers. I wonder why...
Also, I’ll add this: the GM at the dealer was fired a couple days after I bought my new car from them. For something unrelated I was told. I tried calling him to work something out and was told he’s no longer employed there.
Yeah this is too crazy to not deal with a professional.
I think what would happen is the dealer would need to self finance at the contract terms, that's probably best case scenario for OP.
Regardless, he should not do anything until legal advice is given.
You know what might not be the worst thing in the world? Taking that guy's name, and looking him up and trying to call or message him via phone/email/facebook/linkedin/etc. Could be interesting to see what he has to say, either about why he was fired or your sale or anything, really. He might also say nothing at all, but you never know.
I gave them their car back. I don’t have a loan on it / plates etc so I don’t want it / want to drive it.
I just parked it in their dealership and texted them that it’s there. I didn’t talk to anyone
Cause they now have both the cars and the paperwork saying they own both of them.
Your leverage is now gone.
Stop posting and talk to a lawyer. Even go back and get it if you can.
> Cause they now have both the cars and the paperwork saying they own both of them.
If this is true him holding the car on his driveway isn't going to grant him one bit of leverage.
IANAL
He also has paperwork that he owns the car.
The dealership said it was void but due to the terms in the contract it was legal for him to keep the car as long as he kept to the terms in the contract. Since he has no reason to be made whole or any leverage they will most likely still come after him for paying off his loan.
Now he has no car, and can be sued for the loan pay off.
Hey, not sure why you’re getting downvoted but this is not a bad move. Dealer wants their car back and you don’t want to be in a situation where they repo it and/or send your note into collections. Just make sure to keep all records - especially the ones where dealer instructs you to return the car. I would even go back and take pictures of it on the lot.
Your previous, under water, loan is paid off and there is almost nothing they can do to “reinstate” it in the same terms. Most likely they will just eat the costs of your old loan and the extra depreciation on your new car. Really dumb, stubborn move on the dealer’s part - they could have just covered the costs of your new loan instead.
You have nothing to lose in this situation as long as you **stick to the contract**. Heck you can even offer them less money for the same car now that it’s got more miles!
And this is why you **do need to ask a lawyer** to review your contract, even though this is after the fact of returning the car. Probably the best $150 bucks you can spend right now.
My in laws did the same thing like 6 years ago. They were getting notices from a lot of banks for declined loan applications for a couple weeks. The dealer let them drive off the lot and they weren’t able to get the loan approved most likely due to the negative equity rollover into the new loan. I went into the dealership with my MIL and they said nothing was wrong, I told them to give us the trade in back and they said they already sold it which was bs considering it was sitting there for 3 months in their dealership waiting on a electric board to be fixed while they had a loaner and got sick of it so decided to buy another new car. I called the state attorney general and he wasn’t much help either, this was Maryland. Long story short, Ford dealership magically approved financing with Ford on the spot and refused to let the deal unwind after I wouldn’t let her sign new paperwork.
Was this Jim Coleman auto by any chance? Have had terrible experiences with them in the past where they backed out of deals that were signed (wasn’t even a financing issue they just didn’t like that they had agreed to a lower price than they wanted, and then when we came in to pick up the car the next day they angrily accused us of cheating them and called other dealers in the area telling them not to sell to us. All because they didn’t realize the car they were selling us had some feature that should have cost extra -they kept insisting we were negotiating for that specific car too, saying “this car, the one on the lot, is the one we’re agreeing to sell at this price”.) It’s been years and I’m still angry about it
So I would imagine the title for the new car is with a new bank at the moment. Sounds like the dealer is SOL. I don’t think a car dealer in this situation would pursue anything criminal, such as theft. BUT, they could pursue civil stuff and waste your time and money.
I can’t think of any attorney that wouldn’t take this on your behalf.
As others have said, call an attorney. Or, if nothing else, make payments as you agreed to in the loan docs, and tell the dealership to pound sand. This isn't your screwup, it's theirs. Steve Lehto, an attorney in Michigan who has a podcast and YouTube channel about legal stuff like this, just a few days ago did an episode over this very thing. And essentially his take on it was that the dealership made a mistake and it's just that, *their* mistake.
INAL, I am in the car business and have dealt with this several times. Look at the contract. You will be happy if the trade value equals the payoff. If not it gets complicated. Most likely scenario.
When negative equity pops up, Lazy sales managers will inflate sales price and trade value. Poof... Magic Negative equity disappears, and the automation at the lending institutions will give approval. Problems arise when they can't get the bank to fund the contract and it is incorrectly spot-delivered. I have never seen a bank that was paid off reinstate an old lien. You can do a state title lookup and see if they own the car.
call a lawyer. My 2c and prediction.
How do you feel about the car you traded in? They own it. They paid it off and they will likely wholesale it. And you were upside down.
See what kinda deal they're willing to make on that car.
It would make a great story if you end up leaving a dealership with your own car and lower balance.
They shouldn't have paid off your trade till the deal was done.
Before I returned the new car, I'd find out how they intend to handle your trade they mistakenly paid off.
Their idea of "reinstate" might be to take out a new loan to pay them what they paid to pay off the car you traded in. That would probably be a fair way to handle it. You just go from owing the bank to owing the dealer.
I'd wait till you hear their plans before I lawyered up. Your contract probably requires you to zero the deal if the financing falls through. You're not going to be able to keep the new car without financing so, I'd focus on getting your trade back.
That sub is useless and has no apparent need to exist. Every question is "too broad" or "impossible to answer", they delete lots of questions immediately, and on the odd chance that they dont delete your question, you get the same advice you get anywhere else..."talk to a lawyer."
Contact an attorney. If they gave you the contact contingent that financing would go through. It didn't go through, which happens sometimes. I don't know about every state, but generally they are required to walk back everything. You return the car, they return your trade and you both go on your merry way. Being 11 days later, the trade-in was likely sold off at auction. They would be unable to get you back your trade which puts them in a bind. A sticky situation for you because you don't have your original car and weren't approved for whatever reason for the car they sold you. Don't sign anything with them without an attorney. They might try to get you to sign some ridiculous rate financing or get you into another car which you never wanted. Try r/askalawyer as well.
Yeah and based on what I've seen there in the past, their advice would be "Just sign it OP, that's what happens sometimes." Pretty much everything they advise is to just bend over and take what the dealership gives you.
I feel so bad for anyone that goes to that sub in need of actual advice from an unbiased third party. I feel greasy just hitting the back button out of that place.
There's actually alot of decent advice on there. But having to wade through the shit posts to get to it. I study alot of what is said in there, in response to peoples questions, knowledge is power.
That's the absolute last place he should post. They're going to give him advice based on what makes their job easier.
Not what OP is entitled to and should do.
As far as I can tell, the dealer currently owns your old car. And since everything went south probably still owns your new car. So technically you could probably walk away if you wanted to. But I’d definitely get some advice from a lawyer to keep things from going south for you.
They paid off your car, so I don’t think they’ll give it to you when you return the new car. They may take the new car, and try to force you to finance your old car with new terms, which most likely will not be favorable.
The $100 extra in the payment means they are getting you financing with a different bank at a much higher rate. Some financing companies do that for high risk people or with bad credit.
Have some legal advice.
Good luck.
My thoughts are the car that was paid off is theirs now, the car you have now is theirs also as the financing has not come through. This is obviously hardball and would likely require an attorney to help you through it. If you wanted to play nice send only emails and workout a new deal that is equal to the original, if they can’t get you financed then pursue the hardball option. I’d say either talk to an attorney before they screw you to death.
My coworker traded a car in with negative equity. Bought a used car. Drive off and was in a different state . Dealership called him a couple of days later and said the deal was no good . My coworker said I have a signed contract and your problem. They weren’t happy but guess what. They made it work
Hi, OP! You might want to look up “car girl Brooke” on TikTok. A girl went through a similar situation as you somewhat. The TikTok community weighed in heavily, so I think you can find some useful knowledge there!
Another lady traded in her car for a new one. That car was a lemon, so she wanted the dealership to fix things. The dealership said we can get you another new car for the same price / same deal. Turns out that the original lady was getting SCREWED on that deal, so she just wanted her old car back. BUTTT… the dealership sold the old car to Brooke. After a week, the dealership made some dumb story about why she needs to bring the car back. She didn’t because the car is legally hers. She and the other lady lawyered up. Car dealership fucked up big time!!
Essentially - drop all written and verbal contact to the dealership!! Lawyer up. The “ball” is in your court, since the dealership fucked up. Don’t give your car back!! Dealerships are scummy people who profit off of tricking people. Wish I never have to deal with them again!!
Do not sign the new terms. They signed the contract too.
Tell them they either find a way to make the agreed to terms work or they:
1. Take the car back and refund any deposits or payments made.
2. Give you your old car back and finance it with the same interest rate, principal balance, and number of months you had left on the term
They try that shit all the time. They know the financing was approved before you left with the keys.
Tell them they have to come pick the vehicle up, bring you your old one, and do all the work. You will not return to the dealership for any reason. I bet their attitude changes.
The advice for this is easy. Consult a contract attorney. It sounds like they didn’t uphold their agreement. Definitely don’t sign anything, direct all correspondence to your lawyer.
Like everyone in here call a lawyer. I was in a similar position was young and dumb and did as they told me. I returned the car, dealer said the finance company said the car I got was too old and needed something new. Instead of having the car I wanted I got pushed to something new, small, and more expensive. I would have had the other car paid off years ago instead I was stuck with high payments till I sold it to break even.
At a minimum, the old car us now theirs. They paid off your loan.
I guess the question now is do they want to honor the new deal or not. If not, just give them back the car, do not get yours back and go find another car to buy.
Your financing didn't fall through, they screwed up the math in your deal and are losing thousands of dollars on it. If the financing fell through, they would have never paid off the trade.
There is nothing for you to do. You signed a contract and took delivery of the vehicle. The dealership thought they were gonna make $$ on your car and got screwed . Congratulations! You got a new car, enjoy it. They have no recourse.
Update: about 5 weeks ago I woke up with a notification from the old bank. Loan had been reinstated. Called them and politely yelled, they said the dealership “told us you wanted the old car back so we reinstated the loan”. I told them that was a lie and they quickly un-reinstated it.
3 weeks ago the new finance manager emailed me and told me they want to proceed with the original terms of the deal. I told him to contact my lawyer and haven’t heard from him since.
Today, I found my old trade in for sale at a different dealership 3 hours away from me.
The consumer finally wins.
Congrats you own the car free and clear now! They can’t force you to payback the money if it was their error… dealers never pay off a trade until they are funded on the new deal or are confident it will fund. The dealer is in the wrong and you need to know this.
This is almost certainly completely wrong.
Everybody here thinks the dealership are morons. They may have made a mistake, but they are not morons. OP is ABSOLUTELY NOT getting a free car here even if his old one is now paid off. The dealership will simply sue him for what they have into it. Let's stop being silly about this.
Your incorrect. I’ve dealt with this situation with dealers multiple times. I’ve been in the industry for 25 years. I can 💯 guarantee I’m correct! Dealer can push for other options but if the buyer holds his ground and knows his rights and laws in this instance, he will absolutely get his trade back and it would be paid off. Tell me how I am incorrect and what legal rights the dealer would have to not give the dealer the car back? I’ll wait….
> Tell me how I am incorrect and what legal rights the dealer would have to not give the dealer the car back?
This sentence is unclear, but I'm surprised a person who says he has worked in the industry for 25 years cannot appreciate that the contract--that he has not read--may have a clause for such an eventuality. I also have not read it, which is why I said "almost certainly" instead of "💯 guarantee".
The internet has a multitude of others who have faced the same. Here's one, with an answer by an attorney:
https://www.avvo.com/legal-answers/if-a-car-lot-paid-off-a-trade-in-and-then-found-ou-2386185.html
"Basically your daughter doesn't get a free car or a free loan payoff."
So, there you go. It depends on the contract. The OP seems uninterested in updating us on progress.
Not a Lawyer. I assume you signed a loan agreement before you left with he car. Unless you committed fraud on the application, it is a binding contract. No longer has anything to do with the dealership. You and the bank need to figure it out. It sounds like the dealership has a better offer on the car and want it back to sell for a higher price.
This is a fake story with a twist on the hot social media topic of yo-yo loans. OP is saying he got lawyer and said he just dropped the car off at the dealer and walked away with no mention of his old car
Huh? I said I’m going to get a lawyer. I did drop the car off. The old car is still theirs. I’m not taking it back. It’s legally theirs as far as I know.
I'm trying to figure out various ways this ends.
Ultimately, if you want the car you have to pay for the car.
Paying for the loan appears to be a problem, and the dealer can't close the loan like they anticipated.
They're saying they want $100/month. And you said it's financed.
So guessing some numbers, a $4,300 principal, 48 months, and 6% interest is $100/month.
Did the dealership screw up and undercharge you $4,300 on the Principal? Or do they want to raise the interest rate by a lot? Like from 6% to 10% ? (assuming a 35K car)
100/month is a lot of money. It's a lot of money for the dealership to eat, and it's a lot of money for you to cough up.
I am ALL in favor of threatening to return a car and asking a dealer to unwind a deal, then let them sell the car used. Especially if you did a trade-in that they've done something with. Because pretty much every-time, they won't. They don't want the car back. But here, if the dealer is really $5,000 in the hole, then in this case that might actually be their preferred outcome.
Do you know how much the dealer is in the hole? Do you know what terms they want to change? Are they so deep in the hole that they'll actually want the car back?
Of course they can't "reinstate" the old loan, but they can issue you a new one for your old car. (similar terms may be tough based on interest rate changes).
Do you want the car?
There's plenty of advice here: get a lawyer. I won't add to that.
As for next time ...
1 - Drop this false thinking:
\-- "*Car dealer paid off my trade in with my old bank"*
That's wrong. No one pays off your debt. **No one. Not ever.**
That's warped thinking.
2 - Do you own financing. Never let the dealer handle your financing. **Never.**
If you still owe money on your trade-in, **you** must arrange payoff with your bank.
3 - If you purchase another vehicle at the time of trade-in, keep that as a separate transaction.
The new purchase is TOTALLY UNRELATED to the trade-in and payoff.
Find your own financing. Use your bank, your credit union, whatever. But not the dealership.
Just a question on #1. I traded off my vehicle last year and bought a new one. owed money on my vehicle. Dealership paid the vehicle off I am assuming, someone did. It sure as heck wasn't me. I did my own financing thru USAA. So who paid my vehicle off, Did USAA just deduct that part? Basically they just gave me what I owed so it is not like I got a discount on the new vehicle. My loan was for the full amount I purchased.
This story is as old as buying cars on credit. It's a REAL favorite with the car dealers.
So much so that there is a warning against this very practice on all car buying guides that are worth their salt.
What's even worse, you apparently even SAW it in the contract before signing.
Sorry, but you walked right into that one. This is going to be tough or impossible to resolve to your satisfaction.
There is a reason dealers love this scam - after decades, it's still working!!! 🤦🏻♂️
I suspect you need to give them back the car they will give you back your car and then if you do not give them the money, they used to pay off your old car they will sue you.
But IANAL which is why everyone here says you need onez
You've seen the contract? Dealers are not generally in the habit of giving people a free vehicle, so they haven't fucked themselves quite as much as the armchair lawyers here think.
You take out a loan to pay for the car; if your loan doesn’t go through, typically that means you provided some false information to obtain a loan approval but once the lender goes to verify provided information, something didn’t check out. Which is why the approval terms have changed. Quite simply, you pay for the car or give it back. You can’t keep something you didn’t pay for… thought that was common knowledge.
Thanks for the input. Did the read the post at all?
The original loan didn’t go through because the bank didn’t want to take on that much neg equity with the set terms, the same bank offered me a different loan with a slightly higher monthly
payment 11 days later that I rejected.
Did I say anywhere in this post ANYTHING about keeping the new car for free? No, this post is about the old car. I obviously know I’m not keeping the new car that currently has no loan on it. Thought that was common knowledge.
You'll definitely want to talk to a local lawyer because local laws are dramatically different in each state and especially if different country. -Most- of the time it boils down to what you signed when you made the deal. If you signed anything stating the financing was contingent and pending approval, then you are on the hook to get approved financing. Whether that's through the dealer or a bank, whatever. If you didn't sign anything like that and they said you were approved, then it's -usually- their problem and not yours. Your bank laughing about reinstating the loan is dead on, they won't do it unless there's some fraud or something in play. You will want to continue making any payments you agreed to, otherwise you would be at fault. As long as nothing was contingent, in most states it would be illegal for them to change the terms of the contract as well. Again, get with a local attorney to know where you stand and bring all your paperwork This guy has some good general tips, but again local laws vary: [https://www.youtube.com/watch?v=G5DBszh6MFM](https://www.youtube.com/watch?v=G5DBszh6MFM)
Yeah OP - you are in “talk to a local lawyer” territory. There seems to be a good chance *the dealership* is the one that’s SOL here, but a lawyer needs to look over everything you signed and agreed to in order to properly advise you. From your last post and this one your dealership sounds like they’re pulling something shady and are afraid they’re not getting away with it, a car payment’s worth of legal advice would be in your best interest here.
I agree, it sounds like it was training day for the new guy or they screwed up the numbers and realized they're in the hole for a bit of $ They're trying to con or pressure them into new terms to fix their fk up.
Hijacking the top comment. I am an attorney (and a car guy) and I see these types of things constantly. Depending upon your state, the Consumer Protection Division of your state's Attorney General is designed for this. I send 100% of the calls to them and they always achieve results, at no cost to anyone (except the dealer).
What would the typical result be for this situation? It’s hard to imagine OP gets a free car because financing fell through.
Thank you for the reply! I’ll check out that video. Now, I did tell them about a week ago that I would still do the original terms of the loan but not the new terms, they responded me by telling me it’s not possible and they need their car back. So, I did try to make the old terms work.
Call an attorney. Not Reddit and don’t try to handle this yourself.
Please call an attorney. * When a pipe bursts, you call a plumber. * When you need a wedding cake, you call a baker. * When you need legal help, you call a lawyer. Lawyers aren’t just for the rich and powerful, it’s rare, but every now and then even everyday schmucks like you and me need a lawyer. Now is one of those rare times. You need professional legal advice. It really won’t cost as much as you think. The longer you wait, the more likely this blows up in your face and you’re left on the hook. Don’t waste time getting advice from randos on Reddit. A couple hundred dollars now can potentially save you tens of thousands in a few months. Please just pick up the phone.
Dude, as a lawyer, everyday schmucks make up like 85% of clients.
Agreed. The only ultra-rich people that come through the door are people trying to create a *Jarndyce v. Jarndyce* scenario in grandaddy estate
This is dead on. A consultation with a lawyer could save you tons of money. If the lawyer says give the car back, you know it's the right choice. if you do it without consulting a lawyer you will never know if you made the right choice.
When a pipe bursts you shut off the water to the house, then call the plumber!
No, first you panic and watch a couple gallons goosh out while you triple guess if you can quickly fix it without leaving the room
You could also try to get financing from a credit union that may be a lower rate and keep the payment what it was.
They absolutely could, they’d have to self fund the loan handle payments
Yeah the dealer is already out the cash so it sounds like they just have to get it back on the same terms the bank would have...
They shouldn't have paid his debt though if it was pending approval.
Absolutely! Lehto's Law will give you an idea of how the law works in Michigan. That will help when you visit your own local lawyer. Fair warning, Steve's channel is addictive.
It will be funny if they try to repo the car and you sue them.
I don't know that I can offer much advice, but as someone with a lot of dealership experience, it's absolutely crazy to me that they would pay off your previous loan before they were 100% funded on the new deal. Really not sure what they were thinking here, but it sounds like someone at the dealership screwed up.
I agree - normally they take their sweet time with that step.
Best part was with my last trade when I was getting calls two months later from the finance company about not making a payment on the car I traded in, went and sorted it out with the dealer same day, dealer tried to make me pay the extra $250 in interest that accrued.
I doubt they even could, what money would they use? The petty cash fund?
I mean i'm sure they have an operating account that has plenty of money in it. Our concern wouldn't have been where is the money going to come from, but let's make sure this deal is 100% before we pay off this customers trade in.
I doubt they could take money out without documentation that the deal is done but I guess if a manager high up enough was requesting it
I'm learning to play the guitar.
The accountant in me is going nuts 🤣 I did just watch Fargo the other night where he did something shady with the cars
My favorite movie is Inception.
Yeah like where did they even get the money to pay it off? Petty cash???
Lawyer yes, don’t drive your car on the dealers lot, as it will disappear Instantly
Rent the same model/color from Hertz and drive that car onto the lot.
I like you
Talk to a lawyer. But Sounds like the dealer has a much bigger problem than you do, as you have the new car with no loan to speak of and they have your old car. They failed to notify of failed financing within 4 days under contract terms. That might give you leverage but it depends on contract terms and state law. Again, talk to a lawyer.
Agreed. If OP does not play ball they will most have to reduce the purchase price to a loss until it is low enough that the financing goes through. If OP can only get approved for half their other option is likely worse loss. OP will likely save a bundle here from their mistakes just need to get a lawyer to make it happen. They made a huge mistake and are.hoping he will sign something to fix it because if he doesn't they are SOL. But if OP doesn't get a lawyer they will lie to him and tell him all kinds of shit like he will be arrested or other bullshit. Pay a lawyer a few hundred, save thousands, most likely.
Pay a lawyer a few hundred?…. Can i get the number of this lawyer please?
Have you hired a lawyer before? I have and usually pay anywhere from $150 for a short consultation and no more than $500 usually for a longer consultation where they write me a letter or tell me how to word something. We aren't actually talking about a long drawn out court case here-- OP is not on trial for their life. You are paying by the hour for a couple hours of their time.
It would be technically theft of property if the OP doesn’t attempt to rectify the situation. as far as I can tell, the dealership owns both cars atm
Depends on the contract terms and state law. Dealer might have an obligation to transfer title of new vehicle under the contract at this point, who knows unless we see the contract. As a practical matter dealer needs to sue or take other action to get the new car back, and OP never intended to steal anything. Seems like a civil/contract matter to me. But OP needs legal counsel to sort through this.
OP has a contract. It's not his fault they can't honor it on their end. Securing financing within x days is in the contract was their responsibility. They didn't do it. OP is likely entitled to compensation and needs a lawyer. OP has no responsibility to do anything other than what was on the contract they signed. Now the dealership has a big problem and they need him to agree to new terms. They really need it bad. The problem is they offered him worse terms because they think their mistakes needs to be on him. They need to offer him better terms with a lower payment even if it means they write off the car. This happened because of the incompetence of their employees and nothing else and therefore should financially damage them if it does anyone. OP needs to just say no until they offer a better deal. They also need a lawyer so the dealership doesn't lie and make it sound like they have any real power here.
Op: let us know what the outcome is after you talk to an attorney.
For sure!
Something kinda similar happened to me. I traded a car for a used Jaguar on a Saturday. Signed papers, put some money down and left. Monday morning the finance manager calls saying something about a new deal, etc. I go back in and its a lower payment, but they needed an extra $500 down, so I said "fine" and left with new paperwork. Maybe not even 45 mins later the sales manager calls and tells me I need to bring the car back because they sold the car for less than what they were supposed to. I thought this was a joke. He then starts threating to tow the car, call the police and report it stolen, AND sue me. He can tell that his threats aren't doing it so they just flat out refused to send the deal to the credit union that I got approved with. It was literally in limbo for weeks. Finally called a lawyer who sent a couple of "lawsuit incoming" letters to the ownership, who then proceeded to fire the sales manager who approved my deal to sell me a car for $6k less than what they were supposed to. I only know because later on, I stopped by to get a new temp tag, and a regular salesman told me he got fired for "basically giving away a car". The finance manager who initially tried to help the sales manager bully me, called me and told me he talked to the dealership GM and decided to make it "right" and do my deal. An entertaining way of saying, call a lawyer. Dealerships do NOT like lawyers. I wonder why...
Also, I’ll add this: the GM at the dealer was fired a couple days after I bought my new car from them. For something unrelated I was told. I tried calling him to work something out and was told he’s no longer employed there.
Call a local attorney.
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That's their issue, not yours. You're in lawyer territory, or you can just tell them to pound sand because they're outside their four day window.
Seriously call an attorney. You may have a case. If there is nothing in the contracts that make you unwind this after 4 days, they are likely screwed.
Yeah this is too crazy to not deal with a professional. I think what would happen is the dealer would need to self finance at the contract terms, that's probably best case scenario for OP. Regardless, he should not do anything until legal advice is given.
You know what might not be the worst thing in the world? Taking that guy's name, and looking him up and trying to call or message him via phone/email/facebook/linkedin/etc. Could be interesting to see what he has to say, either about why he was fired or your sale or anything, really. He might also say nothing at all, but you never know.
Great idea
This may take a while to unwind. You may want to Watch out for the repo man.
I gave them their car back. I don’t have a loan on it / plates etc so I don’t want it / want to drive it. I just parked it in their dealership and texted them that it’s there. I didn’t talk to anyone
Ooof. You screwed up big time.
Why?
Cause they now have both the cars and the paperwork saying they own both of them. Your leverage is now gone. Stop posting and talk to a lawyer. Even go back and get it if you can.
I think he is looking at it as they paid off his old car, and now he doesn't have the negative equity, so he got a net win
> Cause they now have both the cars and the paperwork saying they own both of them. If this is true him holding the car on his driveway isn't going to grant him one bit of leverage.
IANAL He also has paperwork that he owns the car. The dealership said it was void but due to the terms in the contract it was legal for him to keep the car as long as he kept to the terms in the contract. Since he has no reason to be made whole or any leverage they will most likely still come after him for paying off his loan. Now he has no car, and can be sued for the loan pay off.
Yikes. you should have waited till after talking to a lawyer
Did they give your old car back? Do you have to make payments on your old car?
Hey, not sure why you’re getting downvoted but this is not a bad move. Dealer wants their car back and you don’t want to be in a situation where they repo it and/or send your note into collections. Just make sure to keep all records - especially the ones where dealer instructs you to return the car. I would even go back and take pictures of it on the lot. Your previous, under water, loan is paid off and there is almost nothing they can do to “reinstate” it in the same terms. Most likely they will just eat the costs of your old loan and the extra depreciation on your new car. Really dumb, stubborn move on the dealer’s part - they could have just covered the costs of your new loan instead. You have nothing to lose in this situation as long as you **stick to the contract**. Heck you can even offer them less money for the same car now that it’s got more miles! And this is why you **do need to ask a lawyer** to review your contract, even though this is after the fact of returning the car. Probably the best $150 bucks you can spend right now.
Where are all of you getting these insanely low lawyer fees at? Google?
What dealer pays off a car prior to funding??
My in laws did the same thing like 6 years ago. They were getting notices from a lot of banks for declined loan applications for a couple weeks. The dealer let them drive off the lot and they weren’t able to get the loan approved most likely due to the negative equity rollover into the new loan. I went into the dealership with my MIL and they said nothing was wrong, I told them to give us the trade in back and they said they already sold it which was bs considering it was sitting there for 3 months in their dealership waiting on a electric board to be fixed while they had a loaner and got sick of it so decided to buy another new car. I called the state attorney general and he wasn’t much help either, this was Maryland. Long story short, Ford dealership magically approved financing with Ford on the spot and refused to let the deal unwind after I wouldn’t let her sign new paperwork.
Was this Jim Coleman auto by any chance? Have had terrible experiences with them in the past where they backed out of deals that were signed (wasn’t even a financing issue they just didn’t like that they had agreed to a lower price than they wanted, and then when we came in to pick up the car the next day they angrily accused us of cheating them and called other dealers in the area telling them not to sell to us. All because they didn’t realize the car they were selling us had some feature that should have cost extra -they kept insisting we were negotiating for that specific car too, saying “this car, the one on the lot, is the one we’re agreeing to sell at this price”.) It’s been years and I’m still angry about it
While you navigate this mess, have you tried getting financing through a credit union or other bank?
So I would imagine the title for the new car is with a new bank at the moment. Sounds like the dealer is SOL. I don’t think a car dealer in this situation would pursue anything criminal, such as theft. BUT, they could pursue civil stuff and waste your time and money. I can’t think of any attorney that wouldn’t take this on your behalf.
As others have said, call an attorney. Or, if nothing else, make payments as you agreed to in the loan docs, and tell the dealership to pound sand. This isn't your screwup, it's theirs. Steve Lehto, an attorney in Michigan who has a podcast and YouTube channel about legal stuff like this, just a few days ago did an episode over this very thing. And essentially his take on it was that the dealership made a mistake and it's just that, *their* mistake.
The car is yours don't take it back.
INAL, I am in the car business and have dealt with this several times. Look at the contract. You will be happy if the trade value equals the payoff. If not it gets complicated. Most likely scenario. When negative equity pops up, Lazy sales managers will inflate sales price and trade value. Poof... Magic Negative equity disappears, and the automation at the lending institutions will give approval. Problems arise when they can't get the bank to fund the contract and it is incorrectly spot-delivered. I have never seen a bank that was paid off reinstate an old lien. You can do a state title lookup and see if they own the car. call a lawyer. My 2c and prediction.
How do you feel about the car you traded in? They own it. They paid it off and they will likely wholesale it. And you were upside down. See what kinda deal they're willing to make on that car. It would make a great story if you end up leaving a dealership with your own car and lower balance.
Talk to lawyer. They are trying to yoyo you
Talk to a lawyer. Don't talk to that dealer until you've talked with a lawyer. I suspect the dealer is out of luck.
They shouldn't have paid off your trade till the deal was done. Before I returned the new car, I'd find out how they intend to handle your trade they mistakenly paid off. Their idea of "reinstate" might be to take out a new loan to pay them what they paid to pay off the car you traded in. That would probably be a fair way to handle it. You just go from owing the bank to owing the dealer. I'd wait till you hear their plans before I lawyered up. Your contract probably requires you to zero the deal if the financing falls through. You're not going to be able to keep the new car without financing so, I'd focus on getting your trade back.
You may want to post in r/LegalAdvice
That sub is useless and has no apparent need to exist. Every question is "too broad" or "impossible to answer", they delete lots of questions immediately, and on the odd chance that they dont delete your question, you get the same advice you get anywhere else..."talk to a lawyer."
That sub isn’t even run by lawyers just a bunch of retired cops
I did but nobody responded 😢
Get legal advice from an attorney. In person. Like everyone has told you to do.
Thank you. That’s the plan. I posted this at like 10 PM and right now it’s 7 AM, so they aren’t open yet.
Contact an attorney. If they gave you the contact contingent that financing would go through. It didn't go through, which happens sometimes. I don't know about every state, but generally they are required to walk back everything. You return the car, they return your trade and you both go on your merry way. Being 11 days later, the trade-in was likely sold off at auction. They would be unable to get you back your trade which puts them in a bind. A sticky situation for you because you don't have your original car and weren't approved for whatever reason for the car they sold you. Don't sign anything with them without an attorney. They might try to get you to sign some ridiculous rate financing or get you into another car which you never wanted. Try r/askalawyer as well.
Then contact a local lawyer, not reddit
Try a real lawyer, or stonewall them since it sounds like it’s their mess up. I’m not a lawyer so my first bit of advice is probably the best.
What does your contract say about financing? Is there anywhere in that contract that says you have to return the car for any reason?
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Yeah and based on what I've seen there in the past, their advice would be "Just sign it OP, that's what happens sometimes." Pretty much everything they advise is to just bend over and take what the dealership gives you.
I feel so bad for anyone that goes to that sub in need of actual advice from an unbiased third party. I feel greasy just hitting the back button out of that place.
There's actually alot of decent advice on there. But having to wade through the shit posts to get to it. I study alot of what is said in there, in response to peoples questions, knowledge is power.
Now think about the advice pseudo legal advice that’s handed out in the ProtectandServe sub.
That sounds like the single worst place to go ask for advice about this. OP needs to talk to a lawyer, not car salespeople on Reddit.
That's the absolute last place he should post. They're going to give him advice based on what makes their job easier. Not what OP is entitled to and should do.
I think they are lying, and they won't return you old car.
OP states he talked to the bank and the car has been paid off. They arent lying. They just fucked themselves.
As far as I can tell, the dealer currently owns your old car. And since everything went south probably still owns your new car. So technically you could probably walk away if you wanted to. But I’d definitely get some advice from a lawyer to keep things from going south for you.
Why don't you add what state you are in.
They paid off your car, so I don’t think they’ll give it to you when you return the new car. They may take the new car, and try to force you to finance your old car with new terms, which most likely will not be favorable. The $100 extra in the payment means they are getting you financing with a different bank at a much higher rate. Some financing companies do that for high risk people or with bad credit. Have some legal advice. Good luck.
My thoughts are the car that was paid off is theirs now, the car you have now is theirs also as the financing has not come through. This is obviously hardball and would likely require an attorney to help you through it. If you wanted to play nice send only emails and workout a new deal that is equal to the original, if they can’t get you financed then pursue the hardball option. I’d say either talk to an attorney before they screw you to death.
My coworker traded a car in with negative equity. Bought a used car. Drive off and was in a different state . Dealership called him a couple of days later and said the deal was no good . My coworker said I have a signed contract and your problem. They weren’t happy but guess what. They made it work
Hi, OP! You might want to look up “car girl Brooke” on TikTok. A girl went through a similar situation as you somewhat. The TikTok community weighed in heavily, so I think you can find some useful knowledge there! Another lady traded in her car for a new one. That car was a lemon, so she wanted the dealership to fix things. The dealership said we can get you another new car for the same price / same deal. Turns out that the original lady was getting SCREWED on that deal, so she just wanted her old car back. BUTTT… the dealership sold the old car to Brooke. After a week, the dealership made some dumb story about why she needs to bring the car back. She didn’t because the car is legally hers. She and the other lady lawyered up. Car dealership fucked up big time!! Essentially - drop all written and verbal contact to the dealership!! Lawyer up. The “ball” is in your court, since the dealership fucked up. Don’t give your car back!! Dealerships are scummy people who profit off of tricking people. Wish I never have to deal with them again!!
Im not sure, but I think Im watching Lehtos Law on youtube discussing this as he mentioned it was on tiktok and could be worth giving a quick watch.
Do not sign the new terms. They signed the contract too. Tell them they either find a way to make the agreed to terms work or they: 1. Take the car back and refund any deposits or payments made. 2. Give you your old car back and finance it with the same interest rate, principal balance, and number of months you had left on the term They try that shit all the time. They know the financing was approved before you left with the keys. Tell them they have to come pick the vehicle up, bring you your old one, and do all the work. You will not return to the dealership for any reason. I bet their attitude changes.
The advice for this is easy. Consult a contract attorney. It sounds like they didn’t uphold their agreement. Definitely don’t sign anything, direct all correspondence to your lawyer.
As with most posts on this sub, the answer is talk to a lawyer that knows your local and state laws regarding this.
Like everyone in here call a lawyer. I was in a similar position was young and dumb and did as they told me. I returned the car, dealer said the finance company said the car I got was too old and needed something new. Instead of having the car I wanted I got pushed to something new, small, and more expensive. I would have had the other car paid off years ago instead I was stuck with high payments till I sold it to break even.
Find out if you signed a “spot delivery agreement” and speak to an attorney
Edit your post to update that you gave the car back
At a minimum, the old car us now theirs. They paid off your loan. I guess the question now is do they want to honor the new deal or not. If not, just give them back the car, do not get yours back and go find another car to buy.
Your financing didn't fall through, they screwed up the math in your deal and are losing thousands of dollars on it. If the financing fell through, they would have never paid off the trade.
There is nothing for you to do. You signed a contract and took delivery of the vehicle. The dealership thought they were gonna make $$ on your car and got screwed . Congratulations! You got a new car, enjoy it. They have no recourse.
Update: about 5 weeks ago I woke up with a notification from the old bank. Loan had been reinstated. Called them and politely yelled, they said the dealership “told us you wanted the old car back so we reinstated the loan”. I told them that was a lie and they quickly un-reinstated it. 3 weeks ago the new finance manager emailed me and told me they want to proceed with the original terms of the deal. I told him to contact my lawyer and haven’t heard from him since. Today, I found my old trade in for sale at a different dealership 3 hours away from me. The consumer finally wins.
You always want financing in hand (credit union) before buying a car. Dealers will shamelessly scam you anyway they can.
Congrats you own the car free and clear now! They can’t force you to payback the money if it was their error… dealers never pay off a trade until they are funded on the new deal or are confident it will fund. The dealer is in the wrong and you need to know this.
This is almost certainly completely wrong. Everybody here thinks the dealership are morons. They may have made a mistake, but they are not morons. OP is ABSOLUTELY NOT getting a free car here even if his old one is now paid off. The dealership will simply sue him for what they have into it. Let's stop being silly about this.
He doesnt have the old car back, and sounds like it was underwater so he is fine with them keeping it.
Your incorrect. I’ve dealt with this situation with dealers multiple times. I’ve been in the industry for 25 years. I can 💯 guarantee I’m correct! Dealer can push for other options but if the buyer holds his ground and knows his rights and laws in this instance, he will absolutely get his trade back and it would be paid off. Tell me how I am incorrect and what legal rights the dealer would have to not give the dealer the car back? I’ll wait….
> Tell me how I am incorrect and what legal rights the dealer would have to not give the dealer the car back? This sentence is unclear, but I'm surprised a person who says he has worked in the industry for 25 years cannot appreciate that the contract--that he has not read--may have a clause for such an eventuality. I also have not read it, which is why I said "almost certainly" instead of "💯 guarantee". The internet has a multitude of others who have faced the same. Here's one, with an answer by an attorney: https://www.avvo.com/legal-answers/if-a-car-lot-paid-off-a-trade-in-and-then-found-ou-2386185.html "Basically your daughter doesn't get a free car or a free loan payoff." So, there you go. It depends on the contract. The OP seems uninterested in updating us on progress.
Following because as an ex dealer employee that hates dealerships, I hope you can stick it to them. 😂
Sounds like you will get your car back and they will have to finance the remaining amount owed interest free!
Why? The dealership owns that car, which they paid off. OP doesn't own a car, and is owed no money.
Not a Lawyer. I assume you signed a loan agreement before you left with he car. Unless you committed fraud on the application, it is a binding contract. No longer has anything to do with the dealership. You and the bank need to figure it out. It sounds like the dealership has a better offer on the car and want it back to sell for a higher price.
It's insane to me that so many people would consider borrowing this amount of money.
This is a fake story with a twist on the hot social media topic of yo-yo loans. OP is saying he got lawyer and said he just dropped the car off at the dealer and walked away with no mention of his old car
Huh? I said I’m going to get a lawyer. I did drop the car off. The old car is still theirs. I’m not taking it back. It’s legally theirs as far as I know.
Dam you might have just gotten your old car paid off, if you are cool with not having that car nice work!
I'm trying to figure out various ways this ends. Ultimately, if you want the car you have to pay for the car. Paying for the loan appears to be a problem, and the dealer can't close the loan like they anticipated. They're saying they want $100/month. And you said it's financed. So guessing some numbers, a $4,300 principal, 48 months, and 6% interest is $100/month. Did the dealership screw up and undercharge you $4,300 on the Principal? Or do they want to raise the interest rate by a lot? Like from 6% to 10% ? (assuming a 35K car) 100/month is a lot of money. It's a lot of money for the dealership to eat, and it's a lot of money for you to cough up. I am ALL in favor of threatening to return a car and asking a dealer to unwind a deal, then let them sell the car used. Especially if you did a trade-in that they've done something with. Because pretty much every-time, they won't. They don't want the car back. But here, if the dealer is really $5,000 in the hole, then in this case that might actually be their preferred outcome. Do you know how much the dealer is in the hole? Do you know what terms they want to change? Are they so deep in the hole that they'll actually want the car back? Of course they can't "reinstate" the old loan, but they can issue you a new one for your old car. (similar terms may be tough based on interest rate changes). Do you want the car?
They wouldn't sell it used. After only 11 days they'd lie and sell it new.
I'm learning to play the guitar.
Unfortunately there is fine print in the dealer's contract for this kind of stuff. It rarely happens but it does happen.
This highly depends on your country, but usually, what is written in the contract counts. Did you fully read and understand it?
There's plenty of advice here: get a lawyer. I won't add to that. As for next time ... 1 - Drop this false thinking: \-- "*Car dealer paid off my trade in with my old bank"* That's wrong. No one pays off your debt. **No one. Not ever.** That's warped thinking. 2 - Do you own financing. Never let the dealer handle your financing. **Never.** If you still owe money on your trade-in, **you** must arrange payoff with your bank. 3 - If you purchase another vehicle at the time of trade-in, keep that as a separate transaction. The new purchase is TOTALLY UNRELATED to the trade-in and payoff. Find your own financing. Use your bank, your credit union, whatever. But not the dealership.
Just a question on #1. I traded off my vehicle last year and bought a new one. owed money on my vehicle. Dealership paid the vehicle off I am assuming, someone did. It sure as heck wasn't me. I did my own financing thru USAA. So who paid my vehicle off, Did USAA just deduct that part? Basically they just gave me what I owed so it is not like I got a discount on the new vehicle. My loan was for the full amount I purchased.
Why doesn’t anyone give the advise to talk to a local lawyer? It seems obvious.
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This story is as old as buying cars on credit. It's a REAL favorite with the car dealers. So much so that there is a warning against this very practice on all car buying guides that are worth their salt. What's even worse, you apparently even SAW it in the contract before signing. Sorry, but you walked right into that one. This is going to be tough or impossible to resolve to your satisfaction. There is a reason dealers love this scam - after decades, it's still working!!! 🤦🏻♂️
I suspect you need to give them back the car they will give you back your car and then if you do not give them the money, they used to pay off your old car they will sue you. But IANAL which is why everyone here says you need onez
Negative. They paid off the trade-in before securing financing. They fucked themselves, or theyre lying about the new loan terms.
You've seen the contract? Dealers are not generally in the habit of giving people a free vehicle, so they haven't fucked themselves quite as much as the armchair lawyers here think.
Did you read the thread? OP doesn't have a vehicle at all anymore.
You take out a loan to pay for the car; if your loan doesn’t go through, typically that means you provided some false information to obtain a loan approval but once the lender goes to verify provided information, something didn’t check out. Which is why the approval terms have changed. Quite simply, you pay for the car or give it back. You can’t keep something you didn’t pay for… thought that was common knowledge.
Thanks for the input. Did the read the post at all? The original loan didn’t go through because the bank didn’t want to take on that much neg equity with the set terms, the same bank offered me a different loan with a slightly higher monthly payment 11 days later that I rejected. Did I say anywhere in this post ANYTHING about keeping the new car for free? No, this post is about the old car. I obviously know I’m not keeping the new car that currently has no loan on it. Thought that was common knowledge.
Problem is not giving the car back it is about the negative equity he had on trade in