Deadbeat Defaulting Dealers…

The uncertainty of the retail automotive market is uncovering unfortunate ripple effects. And its the consumer who is left reeling from these ripples.

Here’s the situation: A shopper trades in their used car at a car dealership and purchases a new vehicle. The dealership is responsible for paying off the balance owed on the trade-in.

Introduce weak cash flow, or even worse, dealers simply shutting down and you’ve got a mess on your hands. Rather, the person who traded in their car has a mess – because the dealership defaulted on their obligation to pay off the trade.

Now the person who sold their car to the dealership is left holding the bag on two car payments – their new car AND the old one!

Imagine when the trade-in vehicle has been purchased by a third party and repossessed because of the defaulted loan.  This just makes an ugly situation even uglier. Buyers assumed they were getting a vehicle with a clear title. (no liens against it)

If you’re concerned and want to be extra cautious, simply ask the dealership to see the title on the vehicle you’re buying.

If you traded a vehicle in, get confirmation the dealership has in fact paid off your old loan. Depending on the state you’re in, this is usually done within 1-7 days.

Shop smart and be prepared.

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