I got into financial difficulties and could not pay for the car so I had to let it go back. Now the company the car lot sold my loan to is trying to sue me. The only contract they have is the one from the car lot. How can I get out of having to pay this. I know that they have already sold the car, so why are they trying to sue me for it? Any serious info will be appreciated. Thanks in advance.
2007-04-28 13:59:24 · 4 answers · asked by sncandrsj 3 in Business & Finance ➔ Personal Finance
Being in the buy here pay here business myself I can answer the question to a very full extent. When you buy a car at a buy here pay here lot, you are agreeing to pay X amount for the car. Your repayment of the loan has no basis on whether or not you keep the car. When they sold you the car, you agreed that the car was worth X amount and you took out a loan from the dealer for that amount. Chances are the car wasn't worth half what you paid in actual cash value, but that's the price you pay for easy approval.
Fact is, when you default on the loan and they repossess the car, you didn't owe them a car, you owed them X amount of money. If the car only brings Y amount of money from a wholesaler or auction, X-Y= what you still owe. As far as the financing company, the dealer has the right to sell that note 10 seconds after you sign the paperwork if they feel like it...it has no relevance to the amount you owe, or the terms of your loan, only who you pay.
For the record, it costs a buy here pay here dealer about $1,000 per account per year to collect the money, and industry wide the average charge off rate is about 30%...that's 30% of the sales price + $1000 per year the note runs that the dealer will not collect from the average customer.
I'm sorry for your financial troubles but my best advice is to man up and come to a settlement with them...this should and will affect your credit for a very long time if you do not pay it, and it won't be difficult for them to get a judgment against you and garnish your wages. Many times they will be willing to settle for about half the remaining amount...just don't piss them off because legally (and morally in my opinion) they are right and you are a thief if you don't repay the money you borrowed. Again, sorry it happened this way but hopefully you'll be wiser next time. I guarantee the dealer didn't want to screw you, in fact they were probably praying nightly that everything was going great for you so that you could pay them as agreed.
2007-04-30 19:49:13 · answer #1 · answered by Zeph 1 · 0⤊ 0⤋
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2016-09-26 07:29:34 · answer #2 · answered by ? 3 · 0⤊ 0⤋
If it is my understanding when you let the car go back, they did not sell the car, they sold the loan. Banks sell loans and mortgages all the time. They can sell the car at a loss and make you fulfill your obligations. If you find what I said is true pay it or set up a plan, to avoid more credit hits and added legal fees.
2007-04-28 14:15:14 · answer #3 · answered by tom 4 · 2⤊ 0⤋
When a car goes back, they auction your car to the highest bidder. They deduct that amount from the loan amt, and can sue for the remainder of the balance. At this point, just file bankruptcy.
2007-04-28 14:08:10 · answer #4 · answered by DJ 3 · 1⤊ 1⤋