Buying A Truck And Trading In.

[JeziHogg]

Correct me if I'm wrong, but I think a buddy of mine just got scammed.

 

So, he has a fusion that he owed roughly $7400 on.

He bought a truck for $43,500 with Tax and ever other fee included.

They told him they would give him $7400 for the trade in, therefore paying off the existing debt on the fusion.

After everything is said and done, the paper that he signed says the principle amount of money owed on the new loan is $50,900, and the dealer now has the ownership of the fusion.

 

I looked at the loan contract and it looks like they added the loan on the fusion onto the new loan. So, am I out to lunch? When something is "trade-in" doesn't the dealership use their own money to pay for it, not add the money onto the new loan? Seems to me that the dealership just got my buddies Fusion for free.

[slonezp]

Sounds like they should have given him a check for the $7400 if they rolled the balance into the new loan

[JeziHogg]

My thoughts exactly.

[SirSnookalot]

He should have read it before signing, he does have 3 days to cancel. 

It does look like the $7400. pay off was rolled into the new loan, should not have been.  The dealership should have cut him a personal pay off check or pay the balance off themselves, either way there should be paperwork regarding taking the trade in and the pay off.

Can't really say what the mistake is, except maybe a clerical error.

[Lund Explorer]

He should have read it before signing, he does have 3 days to cancel. 

It does look like the $7400. pay off was rolled into the new loan, should not have been.  The dealership should have cut him a personal pay off check or pay the balance off themselves, either way there should be paperwork regarding taking the trade in and the pay off.

Can't really say what the mistake is, except maybe a clerical error.

Sounds like a clerical error to me as well, but the buyer has the responsibility to read what he is signing. If

the buyer is within that three day window, they should be beating feet to the dealership. If it's beyond that

time frame, I would still suggest going in and seeing if there is a way to resolve it.

If that doesn't work, there are still more costly solutions involving attorneys!

[Fishing Rhino]

Was it a new truck?  At that price, I'd assume it is.  If so, and the dealer refuses to rectify the situation, he should contact the manufacturer, explaining what happened.  Info for contacting the manufacturer should be in the owner's manual.

 

No manufacturer wants their dealers shafting the public.

[J Francho]

We had a local dealer do this, and never pay off the loans.  Dude is in jail now.  It took years for people to figure it out.

[Delaware Valley Tackle]

Looks shady from here, but what was the MSRP on the new truck and the book value of the trade in? Dealers try to tell you they'll give you X for your trade but the price of the new one goes up so you're not getting near what they told you.  Make sure any factory rebates or incentives come off the negotiated price a swell. We had a local dealer pocketing rebates years ago. He escaped jail by the skin of his teeth but was a cashier at Price Chopper for a while after that. What is it they say about Karma? 

[JeziHogg]

Good end to this story. I drove over to the dealership today with a suit on and carrying a brief case and told them I was a Corporate Lawyer, and made up some legal BS on the spot. They ended up giving him a cheque for $7400 on the spot.

[J Francho]

These guys need to be reported to your equivalent of the AG.

[F14A-B]

Good end to this story. I drove over to the dealership today with a suit on and carrying a brief case and told them I was a Corporate Lawyer, and made up some legal BS on the spot. They ended up giving him a cheque for $7400 on the spot.

Well now, good thing he has you for a friend!

[Glenn]

Sounds like a math error by an inept finance clerk in the back office.  Can you say "Job Openings"?

[JeziHogg]

I honestly thought it might have been a mess up aswell. But looking at the paper work they subtracted the 7400 initially but then re added the 7400 to the principle amount and I'm assuming the tried to get it blended into the wash of numbers and writing on the contract. I also hate lying, but the guys my friend and I hate thieves.

[Fishing Rhino]

These guys need to be reported to your equivalent of the AG.

 

And the local Chamber of Commerce.

[SirSnookalot]

Good end to this story. I drove over to the dealership today with a suit on and carrying a brief case and told them I was a Corporate Lawyer, and made up some legal BS on the spot. They ended up giving him a cheque for $7400 on the spot.

It's good they issued a check for $7400 for payoff but did they re write the contract?  If the contract is still at $50,900 your friend is still over paying both price and interest.  The contract should be for the price of the truck $43,500, the $7400 check just paid off the trade in.  It makes little difference to the dealership issuing a check to your friend or issuing it directly to the finance company for pay off.  From the explanation it sounds like your friend is still paying $50,900 for a $43,500 truck, unless some details haven't been mentioned.

 

I don't know many corporate attorneys that run right over to place of business to represent a single client.  An attorney in general practice probably would have phoned first or sent a letter by courier, not just show up.  A real attorney most likely would have had a prepared document on his letterhead, just in case of a problem down the road.  An attorney would have presented their business card before anything else.  Did they think you were attorney, I'm not so sure about that.  Don't know about the law in Canada, but in many states falsely representing oneself as an attorney has consequences, probably not for a 1 time shot like this.

[Fishing Rhino]

It's good they issued a check for $7400 for payoff but did they re write the contract?  If the contract is still at $50,900 your friend is still over paying both price and interest.  The contract should be for the price of the truck $43,500, the $7400 check just paid off the trade in.  It makes little difference to the dealership issuing a check to your friend or issuing it directly to the finance company for pay off.  From the explanation it sounds like your friend is still paying $50,900 for a $43,500 truck, unless some details haven't been mentioned.

 

I don't know many corporate attorneys that run right over to place of business to represent a single client.  An attorney in general practice probably would have phoned first or sent a letter by courier, not just show up.  A real attorney most likely would have had a prepared document on his letterhead, just in case of a problem down the road.  An attorney would have presented their business card before anything else.  Did they think you were attorney, I'm not so sure about that.  Don't know about the law in Canada, but in many states falsely representing oneself as an attorney has consequences, probably not for a 1 time shot like this.

True, the contract is still in force and he is paying the 50,900 dollars, but he now has a 7400 dollar check in pocket.  If he is smart, he will apply that 7400 dollar check to the principle on the loan and reduce the balance.  However, even if he does do that, he may end up paying more interest on the loan.  It depends on how they work the interest.  As I'm sure you know, home mortgages are front loaded where most of the payment goes to interest.  Over the term of the loan the interest portion declines and the principle portion increases.

 

When we bought our homes, we got an amortization schedule and paid extra on the principal, thereby saving a ton on the interest.  We never had big mortgages and our monthly payments were  about one hundred five dollars.  To keep that in perspective, we got our first mortgage in 1965.  When we moved and sold our home we got enough so our new mortgage payments were essentially the same.  In our third move we again ended up with the same monthly payments.  We also still paid extra on the principle and paid off our thirty year mortgage in about fifteen years, again saving a ton of money on the total interest paid.

[SirSnookalot]

True, the contract is still in force and he is paying the 50,900 dollars, but he now has a 7400 dollar check in pocket.  If he is smart, he will apply that 7400 dollar check to the principle on the loan and reduce the balance.  However, even if he does do that, he may end up paying more interest on the loan.  It depends on how they work the interest.  As I'm sure you know, home mortgages are front loaded where most of the payment goes to interest.  Over the term of the loan the interest portion declines and the principle portion increases.

 

When we bought our homes, we got an amortization schedule and paid extra on the principal, thereby saving a ton on the interest.  We never had big mortgages and our monthly payments were  about one hundred five dollars.  To keep that in perspective, we got our first mortgage in 1965.  When we moved and sold our home we got enough so our new mortgage payments were essentially the same.  In our third move we again ended up with the same monthly payments.  We also still paid extra on the principle and paid off our thirty year mortgage in about fifteen years, again saving a ton of money on the total interest paid.

The $7400 is to pay off the old car.  If the check is applied to the new car he still owes on the old one. 

 

Auto loans come in both simple interest loans as well as front loaded.  Many dealerships write front loaded loans while banks and credit unions are more likely to be simple interest loans.  The issue in this case is paying too much for the vehicle.

[JeziHogg]

Ya snook, its illegal as all heck to impersonate a lawyer here in Canada as well, but hey it worked. Regardless if they believed I was a lawyer or they realized that my friend wasn't going down with a fight, he ended up getting the money.

As for what he uses the cheque for is on him.

[J Francho]

It's generally illegal to practice as an attorney, as in offer advice, taking clients, in court.  What you did is no different than telling a lady at the bar your a lawyer.  It's just lying - not always illegal.

[Crappiebasser]

Ya snook, its illegal as all heck to impersonate a lawyer here in Canada as well, but hey it worked. Regardless if they believed I was a lawyer or they realized that my friend wasn't going down with a fight, he ended up getting the money.

As for what he uses the cheque for is on him.

He's still getting bent over for $7400 plus interest. I advise he does not cash the check and takes it and the truck back them and tells them to forget the whole thing. If they won't he needs to take his case to the OCA.

[J Francho]

The $7400 is to pay off the old car.  If the check is applied to the new car he still owes on the old one. 

 

Auto loans come in both simple interest loans as well as front loaded.  Many dealerships write front loaded loans while banks and credit unions are more likely to be simple interest loans.  The issue in this case is paying too much for the vehicle.

 

So, he handed in a $7400 vehicle, took a $43,500 vehicle home, got a check for $7400 and a loan for $50,900.  There's some bad math here....

 

(7,400) - (value of trade-in)

(50,900) - (loan)

43,500 - (truck value)

7,400 - (refund)

 

If they don't pay off his old loan, he's still out $7400?  I hate this stuff, makes my head spin.

[JeziHogg]

Ya, hes still gonna end up paying interest regardless, but if he uses the $7400 toward the $50k loan, he wont get charged the interest on the $7,4k because he has used it towards the principle of the $50k loan, making it a $43,5k loan. Unfortunately once you sign the contract in Ontario it is binding so you cannot return it.

[J Francho]

Did the dealer pay off the $7,400 loan?  That's the part I'm wondering about.  That's where the guy here got into trouble.  He wasn't paying off the trade-in loan.  People traded in a car, bought a new one, and later the banks came after them for the original loan.  Mad shady.

[SirSnookalot]

Ya, hes still gonna end up paying interest regardless, but if he uses the $7400 toward the $50k loan, he wont get charged the interest on the $7,4k because he has used it towards the principle of the $50k loan, making it a $43,5k loan. Unfortunately once you sign the contract in Ontario it is binding so you cannot return it.

That's the big question, did the dealer pay off the loan as well giving the buyer a check.

 

This is true, I just read the Ontario law, no cooling off period as we have in the states.

Whether he pays down the 50k to the original purchase price or leaves it and pays off the old loan, he is still stuck for 7400 bucks.  Lesson learned, read it before you sign it.

[JeziHogg]

Did the dealer pay off the $7,400 loan?  That's the part I'm wondering about.  That's where the guy here got into trouble.  He wasn't paying off the trade-in loan.  People traded in a car, bought a new one, and later the banks came after them for the original loan.  Mad shady.

Ya, the $7400 cheque was to pay for the loan he owed on the Fusion. Where the dealership tried to screw him was they told him they would pay for the Fusion with their own money, but ended up rolling the $7400 onto his new loan, therefore getting the Fusion for free. Now my buddy has no loan left to pay for the Fusion.