Jacksonville — The Florida Department of Highway Safety and Motor Vehicles is investigating the business practices of Riverside Chevrolet after multiple people claim their credit is ruined because the dealership did not pay their trade-in loans in time. Customers say the dealership took months to pay them off.
WOKV’s Consumer Warrior Clark Howard is giving you some tips on how to prevent yourself from getting scammed the next time you are headed to a dealership. Clark says the problems with trade-in loans have been around for a while. A trade-in is when you are tired of a vehicle before you’ve payed off its loan, so you take it to a dealership, trade the vehicle in and then take out a loan on another vehicle. Clark says don’t trade in a vehicle you still own money on.
“You could end up owing on the loan on the vehicle you traded in, plus, the loan on the new vehicle you drove off in.” Clark says.
Clark says you are expecting, in good faith, the dealer to pay off the trade-in before time runs out, and if they don’t it ruins your credit.
Clark says the problem with trade-ins start with taking out longer car loans. He says the longest loan repayment you should have is 42 months.
“I’m sorry to tell you something you don’t want to hear, but if you can’t afford the payment on a 42 month loan, you can not afford the payment on that vehicle. You can not buy that vehicle. Period, if you care about your long-term finances.” Clark says.
Clark says if you’re thinking about trading in, pay off the loan first, even if you have to use money from your savings account.
“Whatever it is, but do not trade in a vehicle that still has a loan on it.” Clark says.
Clark says you are responsible for your loan even after you trade in your vehicle because legally the lender was not a party to your decision to trade in your vehicle to that dealer.
“Your legal responsibility goes back to the lender. If the dealer doesn’t do the right thing and pay off that loan and it goes delinquent, that is on you and not the dealer.” Clark says.
Florida law says car dealerships have 10-days to pay off trade-in loans. JSO says they are also investigating an incident we told you about earlier this week at Riverside Chevrolet where multiple cars were set on fire in the lot after the dealership was involved in a consumer alert from the Better Business Bureau.
Sign Up
