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| Trading in or Buying Used? Avoid Trouble – Make Sure Your Old Loan Is Paid Off By Remar Sutton, DCU StreetWise Spokesperson 
Around the country, more dealerships are going broke and closing. This has created a big problem for some consumers who traded in a vehicle or who bought a used traded-in vehicle. When you trade in a vehicle, the transaction should include paying off the original loan on that vehicle. Sometimes, though, instead of settling that loan, the dealership may fail to pay off that loan before closing its doors. The now-closed dealership where they traded in or bought the used car never paid off the lien (loan) on the car as they were legally supposed to do. What does this mean for the unfortunate consumer?Those who traded in the car for a new car may find that if the dealer defaulted on paying the old loan, they must now pay it. They still must pay their loan for the new vehicle, too. If the consumer bought a used car on which the dealership didn't pay off the old loan, the consumer may find that the previous lender repossesses the vehicle or demands payment from them, the new owner. How can you prevent this from happening to you if you're considering buying a used car or trading in your old car for a new one? Here are some tips: If you still owe money on your trade, pay it off yourself before trading. Having a clear title to the car prevents the above situation. When you finance your purchase through your credit union, you'll find that they can also help you pay off your existing loan. Instead of trading, why not sell your car yourself? Learn tips at StreetWise at dcu.org. Ask to see the title of the car you plan to purchase. Make sure that the title is in the dealer's name and not the previous owner's name. Also, there should be no liens on the title (or there should be clear evidence, such as official receipts, that previous liens are paid off). If the title isn't clear, look for another vehicle that has a clear title in the dealer's name. If the dealer won't show you the title or you have any doubts, go to another dealership. Of course, before buying any car, read the StreetWise Auto Buying Guide at dcu.org. |
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| Digital Federal Credit Union PO Box 9130 Marlborough, MA 01752-9130 508.263.6700 • 800.328.8797 • dcu.org • dcu@dcu.org TTY 800.395.5146 (For hearing impaired only) Have you had a good experience with DCU that you want to share with others? Send us an email at dcu@dcu.org or mail it to: DCU Attn: Marketing Dept. PO Box 9130 Marlborough, MA 01752-9130 |
For direct deposit: routing and transit # ABA 211391825 Editor: James Paquette To apply for a Home Equity Loan, Consumer Loan, or Mortgage anytime, call 508.263.6700 or 800.328.8797 (select 3) or visit dcu.org. For a complete listing of DCU's rates, visit our web site at dcu.org or stop by your nearest DCU branch.  Images may be from one or more of these sources: ©Thinkstock, ©iStock, ©Fotolia. ©2010 Digital Federal Credit Union. |