Trading in a car is supposed to feel like the clean break that lets you move on to something better, yet many individuals find themselves completely blindsided when the bills keep coming long after the old keys have been handed over. This is confusing and annoying, to say the least, especially when you thought the dealer promised to take care of the remaining balance. While situations like this are more common than most people expect, you do have rights, and the knowledgeable New Mexico car dealer fraud lawyers here at Feferman, Warren & Mattison are here to help you exercise them. Read on and contact our firm to learn how we can help if you’re still getting bills for a car you traded in.

What should happen when a dealer accepts your trade-in?

Most people assume that once the dealer agrees to accept the trade-in and applies its value toward the new purchase, the rest of the process will take place behind the scenes without any additional work from the buyer. In theory, this is exactly what should happen, because the dealer is responsible for paying off the outstanding loan on your old vehicle once the trade-in deal is finalized. In short, a dealer is expected to:

  • Pay off the remaining loan balance within a reasonable period of time.
  • Properly document the payoff amount with your lender.
  • Transfer ownership so that the old loan is closed and the account is fully satisfied.

Bills often continue because the dealer either delayed the payoff, paid the wrong amount, or never paid it at all. When that happens, the lender does not wait quietly. Instead, they keep sending notices, reporting missed payments to credit reports, and sometimes even threatening collections, and individuals often don’t discover the problem until they receive a notice that something is past due.

Why do dealers fail to pay off trade-in loans on time?

The reasons vary, but some of the most common that we see are as follows:

  • Waiting too long to submit the payment.
  • Failing to secure financing for your new vehicle, which can delay the rest of the transaction.
  • Engaging in deceptive practices designed to shift the risk onto the consumer.

Regardless of the reason, unfortunately, the consequences all fall on you, not the dealer, which makes these situations incredibly unfair. The fallout is that it can damage your credit and leave you feeling trapped between the lender and the dealer. Fortunately, you do have options.

What should I do if I’m still getting bills for a car I traded in?

Your first step should be to contact the dealer to request proof that the payoff was made, since sometimes a simple delay is all that happened. If the dealer can’t provide evidence or is avoiding your calls, you may be dealing with something more serious, and you should begin gathering all relevant documentation and taking the following actions:

  • Ask your lender for the exact status of the loan and whether any payments were received.
  • Request written confirmation from the dealer explaining how and when the payoff was processed.
  • Document all calls, letters, and emails.
  • Reach out to a knowledgeable New Mexico consumer lawyer who can work to stop the ongoing billing.

If you have further questions or would like to speak with our dedicated legal team about your case, please don’t hesitate to contact us for a free consultation today.