Why won't any car dealerships or other companies buy your car for the payoff amount if it is financed?

Question

They make so much money already. Once they buy your car from you, they can sell it off or re-finance it to someone else and make more money again. I know that there are auto payment-takeover companies, but "subleasing" and such concepts are technically not allowed.

Answer 1

If the car is not worth what is left to pay it off why would the bank pay it off?

Answer 2

Go ahead, call the police like everyone wants you to, And get ready to hear the laughter on the other end of the line. Nobody is trying to screw you or take advantage of you. The only thing the dealer did wrong was failing to obtain the correct payoff information on your trade before working your deal. Go back and reread all your paperwork. If you had estimated your payoff, I guarantee you that you also signed a form that says you would pay any amount over your estimate. BTW - your payoff is simply the amount remaining on your old contract, which you had agreed to pay. Let's say you had $2500 remaining, but you thought your payoff was $1500. Who is liable for that $1000 difference? You are - not the dealer. If they only made $800 on the car they sold you, they would lose $200 on the deal by eating YOUR payoff. As to selling your old car without the title - dealers do this all the time. Because you did not have the title, you signed a power of attorney allowing the dealer to sign the title when the finance company releases it (after they pay off your old loan). The dealer, even though they do not hold title, has legal right of ownership on your old car and can sell it before receiving title. Be very careful - you are actually the one who is close to non-fulfillment of contractual obligation (read: lawsuit).

Answer 3

Finance company gets their money first. When you finance a car, or most anything else for that matter, the interest is in the first payments. Say you borrow $30,000 at 6% interest for 60 months. Your montly payment will be $580. Of that $580 only about $350 will go toward the $30,000 you borrowed. The other $130 goes to interest. So in the first year you pay almost $7000 but only about $5300 goes toward the original $30,000. After one year you still owe $25,000 and there is no way your car is worth that much.

Answer 4

A car dealership is just like any other business. It is in business to make a profit. A payoff is not the market value of a vehicle. If I only owed $10 on a Ferrari, is that Ferrari worth $10? If I owed 1 million on the same Ferrari is it worth 1 million?

Answer 5

Car dealers do not make much money on new cars. $1000 would be a huge profit. They make more money on the used cars. They cannot pay more for your car than it is worth, or they would go out of business. If you owe more than it is worth, let this be a lesson to you. Don't finance a car. Pay cash, and save the money you would pay in interest.

Answer 6

Because it is not worth as much as the seller is asking and the car dealers need to make money not loose it.Work at a car dealer

Answer 7

They don't b/c the vehicle is usually not worth the amount you owe on it when you get ready to trade it off. Most vehicles depreciate in value very quickly, with the exception of trucks and suvs.

Answer 8

we were always told to tell them that you dont owe on it at all to see how much they will give you, or tell them that you owe way more than you actually do so they will probably give you your actual pay off. when you bring in your trade in, take your registration out of the vehicle and have them "appraise" it. once they start talking figures, then you can tell them how much you owe as it shoudn't have any bearing on how much they are willing to give you and once they have already stated a figure, they shouldn't in good faith renig on that. good luck

Answer 9

That's how they do it... pay it off.

But since most trade-ins are upside down (owe more than worth) the negative equity will be applied to the new car.