Legal Question in Credit and Debt Law in Texas

Auto Finance Interest rate 'switcharoo'

I purchased a vehicle on 5/8 but it was a LEMON so I returned it on 5/9 (purchased directly from the finance company, it was a repo). To 'make things right' they told me to go ahead and purchase another vehicle I had seen which was the same make and model, with 10k less miles, and in MUCH better shape, and was $1,000 less (it was at a reputable nation-wide used car dealership). The finance company INCREASED my interest rate THREE PERCENT (from 19.07% to 22.07%) on this better vehicle with less miles for less money. Is this LEGAL? I don't have great credit but they did approve me at 19.07% the day before on THEIR vehicle. HELP!


Asked on 5/17/02, 7:03 pm

2 Answers from Attorneys
Peter Bradie Bradie, Bradie & Bradie

Re: Auto Finance Interest rate 'switcharoo'

It's not really a 'switcheroo'. You bought a used car, a repo. The Lemon Law does not apply to a used vehicle, only to a new one. They could have legally insisted that the lemon was yours, and not taken it back.

The second transaction was a whole new sale. While they upped the percentage, it looks overall as if you got a better deal.

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Answered on 5/20/02, 9:46 am
James Grissom Law Office of James P. Grissom

Re: Auto Finance Interest rate 'switcharoo'

I would have to see copies of the paperwork they gave you on the entire transaction, i.e. both vehicles. My fax # is 956-994-1145. Generally, switheroos are not legal, but it all depends.

Thanks, Jim Grissom

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Answered on 5/18/02, 3:56 pm


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