Car dealership won't pay balance on trade-in vehicle

[50Cal]

I had purchased a Nissan Altima from a well-known dealership in Dallas. This was back in last week of June. During the purchase I had traded in my old car which had an outstanding balance of $1400. However, up to today August 8 the dealership has not payed that balance. All I've gotten from them is promises saying that they'll pay it soon and that their transaction "system" is backed up. However as far as my old lien holder (CapitalOne) is concerned I still owe them $1400. They confirmed multiple times that the sole responsibility is on me to pay off the balance even though the dealership has taken ownership of the trade-in vehicle!

I have complained to them (the dealership) several times that balance on the trade-in is still outstanding but they kept saying it'll be paid, however now I have a severely past due payment with CapitalOne Auto over 20 days past due and now pushing the dreaded 30 days (effective August 15th).

What the dealership kept saying was that even if my past due payment goes past 30 days and my credit is ruined they'll issue an "At Fault Letter" to the credit bureaus saying it was them that were at fault and that will 100% restore my credit to its original status.

Question: All this sounds way too shady to me. Is there anything such as an "At Fault Letter" and is this even common practice by auto dealerships during the car sales process? What should I do? The only documentation I have is the contract stating that they included the $1400 buyout from my trade-in into the amount I owe. However I do not have any paperwork stating that they will issue a letter fixing my credit if it gets ruined. After talking to a few attorneys I've also come to learn that sending them a letter would cost $500 dollars minimum.

 

[PayrollHRGuy]

The letter they are describing is not that uncommon. It simply states that the credit problem was not your fault. When they issue the letter ask them for a copy.

 

[Zigner]

Why would you not continue to make payments on your obligation until the payoff is received? Any overpayment will be refunded to you.

 

[50Cal]

Here is a copy of the auto sales agreement. I removed all identification information to comply with forum however the useful numbers are present.

Link to Contract

The way I understand it:
- Amount allowed for the old car by dealer (Payoff Made By Seller): $1434
- Amount I still owed to the lender for the car: $1499.00

So what I'm expecting is that $1434 be tagged on to the balance I owe on the car and that the "Payoff Made By Seller" (of $1434) is what they would be sending to the dealer.

As they also indicated that the gross trade-in (blue book value of trade-in) is $2000, however the net trade-in was $566 as after they paid my original lender that was the only dollar balance to be applied to the trade-in. Thats how. I understood it. ..Am I mistaken?

 

[50Cal]

Why would you not continue to make payments on your obligation until the payoff is received? Any overpayment will be refunded to you.

Zigler is it a normal occurence during car sales for it to take this long to payoff the previous lender (of the trade-in vehicle) ???

 

[50Cal]

The letter they are describing is not that uncommon. It simply states that the credit problem was not your fault. When they issue the letter ask them for a copy.

However it is the previous lender (CapitalOne) that would be making the negative report on my credit. Are they (CapitalOne) not the ones that usually supposed to send a letter to the credit bureaus. I don't know that the letter send by the dealer to the lender has any impact. Am I thinking along the right lines here?

 

[Zigner]

However it is the previous lender (CapitalOne) that would be making the negative report on my credit. Are they (CapitalOne) not the ones that usually supposed to send a letter to the credit bureaus. I don't know that the letter send by the dealer to the lender has any impact. Am I thinking along the right lines here?

You promised Capital One to make payments of a certain amount each month until your car is paid off. It is your obligation to continue to make those payments until your car is paid off. Capital One will not relieve you of that obligation just because you traded in the car. YOU need to make sure the payments are made until such time as the car is paid off. If you don't, then Capital One will ding your credit. Additionally, you will incur late fees (and likely already have) for not making your payments on time.

Once the dealership pays Capital One, then any overpayment will be refunded to you by Capital One.

PAY YOUR LOAN.

 

[TimStudiesLaw]

Zigler is it a normal occurence during car sales for it to take this long to payoff the previous lender (of the trade-in vehicle) ???

Zigner is correct, it's your loan, you need to pay on it until the dealership pays it off.

Here's a question for you - Have you received anything regarding your NEW loan? It is common for a dealer to not pay off a trade until the new deal has been funded by your new lender.

 

[50Cal]

Zigner is correct, it's your loan, you need to pay on it until the dealership pays it off.

Here's a question for you - Have you received anything regarding your NEW loan? It is common for a dealer to not pay off a trade until the new deal has been funded by your new lender.

I have received a welcome letter from the new lien holder, although they have not sent me a balance/payment due with a due date like the previous lien holder (CapitalOne Auto) does every month.

 

[50Cal]

omg!!! The drama continues. I had actually went to the dealership (yet AGAIN) to sort this stuff out and discovered that the VIN# they used on my contract was a completely different VIN. They're claiming that's why the payment got delayed.

I have no idea where they got that from but I had double-checked it with pictures of my VIN number I had taken recently as well as having the lien-holder of the vehicle (CapitalOne) email me documents stating what the VIN was.

Being that they screwed up the VIN, can I sue them to pay the balance. It was after all their negligence that led to the payment getting delayed.

 

[Zigner]

omg!!! The drama continues. I had actually went to the dealership (yet AGAIN) to sort this stuff out and discovered that the VIN# they used on my contract was a completely different VIN. They're claiming that's why the payment got delayed.

I have no idea where they got that from but I had double-checked it with pictures of my VIN number I had taken recently as well as having the lien-holder of the vehicle (CapitalOne) email me documents stating what the VIN was.

Being that they screwed up the VIN, can I sue them to pay the balance. It was after all their negligence that led to the payment getting delayed.

They will pay the amount they credited you for. As I said before, it was (and is) your responsibility to make sure the loan payments are made up until the point that your loan is paid off.

 

[50Cal]

They will pay the amount they credited you for. As I said before, it was (and is) your responsibility to make sure the loan payments are made up until the point that your loan is paid off.

Why do you think it took them so long even though I had been complaining all this time? The vehicle was traded in on June 26 during the purchase of the new car from them. Does it not seem abnormal that it's taking this long to sort out a customer issue? Surely, all their customers cannot be complaining like this. Is it not normal to give the complaining customer priority?

 

[Zigner]

Why do you think it took them so long even though I had been complaining all this time? The vehicle was traded in on June 26 during the purchase of the new car from them. Does it not seem abnormal that it's taking this long to sort out a customer issue? Surely, all their customers cannot be complaining like this. Is it not normal to give the complaining customer priority?

I recently traded in a vehicle towards a new vehicle and it took right around 5 weeks for my former lender to receive the payoff. Abnormal? Not really...at least not yet.

 

[50Cal]

I recently traded in a vehicle towards a new vehicle and it took right around 5 weeks for my former lender to receive the payoff. Abnormal? Not really...at least not yet.

Mine has been since June 26. That puts it now at six weeks and counting.

 

[Zigner]

Mine has been since June 26. That puts it now at six weeks and counting.

My point being that 5-6 weeks is not out of the realm of "normal".