Legal Question in Consumer Law in California

Auto Trade-In Payoff

I purchased a vehicle on Oct 11, 2004. I traded in my vehicle that I owned at the time, the finance dept of the dealership called the lender for the payoff, and we signed the transfer of ownership paperwork. It is now Nov 15, 2004, the trade has not been payed off, I have a 30 day late reported and the lender is threatening to repo the truck from the dealer. Lender is stating that I am still responsible for the loan regardless of the paperwork that I signed at the dealership on Oct 11. Am I still accountable for the loan? Also, what recourse can I take for the late payment report to my credit?


Asked on 11/15/04, 3:57 pm

1 Answer from Attorneys
Roy Hoffman Law Offices of Roy A. Hoffman

Re: Auto Trade-In Payoff

Unfortunately, you are still responsible to the original lender for the loan on the vehicle you traded in. The old lender is simply not bound by your contract with the dealer. The original lender has every right to repossess the vehicle if they do not receive payments on the loan, regardless of who has physical custody of the vehicle. However, if they repossess the vehicle, they will most probably report that fact to the credit reporting agencies and it will be reported under your name.

You should immedlately contact the dealer and tell them that if they do not immediately pay-off the original loan, you will sue them to recover any damages you inur as a result of their breach of contract including, without limitation, any amounts you are required to repay the original lender, as well as any damages you incur as a result of an adverse credit report as a result of their failure to repay the loan.

If the dealer does not cooperate, you will need to sue it.

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Answered on 11/17/04, 4:48 pm


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