ELVIS
02-03-2009, 01:39 PM
Closing Dealers Stun Buyers With Liens On Trade-In
AP Writers (http://www.freerepublic.com/focus/f-news/2177527/posts)
February 03, 2009
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, "Their credit is destroyed for no fault of their own because the dealer defaulted."
Regulators in other states, including Florida, Iowa and Washington, are seeing a surge in consumer complaints. They warn the problem [will grow] this year because of the deepening recession and trouble in the auto industry.
About a quarter of all car buyers are vulnerable because they still owe money on their trade-in It's become more common for a driver to owe money on a trade-in as people stretch their car payments over six or seven years to make them more affordable.
:elvis:
AP Writers (http://www.freerepublic.com/focus/f-news/2177527/posts)
February 03, 2009
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, "Their credit is destroyed for no fault of their own because the dealer defaulted."
Regulators in other states, including Florida, Iowa and Washington, are seeing a surge in consumer complaints. They warn the problem [will grow] this year because of the deepening recession and trouble in the auto industry.
About a quarter of all car buyers are vulnerable because they still owe money on their trade-in It's become more common for a driver to owe money on a trade-in as people stretch their car payments over six or seven years to make them more affordable.
:elvis: