New Used Car Loan Input???

[BillyRip]

I just applied at a local dealer for a $18K loan on an '06 Mustang. I explained that I would be giving up one of my properties as well as the current car loan I have. I also told them that I would reaffirm the loan when that time came.

I have not filed yet. Any problems with me doing this now?

[BassBoy]

There usually isn't a problem with buying a vehicle before filing.

[liz417]

No, we bought a new car too before our credit took a dive (ch 13). Were you approved?

[BillyRip]

I have not called the dealer back yet. Was waiting for some input here.

So do I drive my old car to the bank and walk in and give them the keys?

[liz417]

I have not called the dealer back yet. Was waiting for some input here.

So do I drive my old car to the bank and walk in and give them the keys?

I would wait until you have the new car and a 1st payment has been made. Also, just in case you weren't aware, just because you leave the dealership with a new car/contract, it doesn't necessarily mean you've been approved for the loan. They have 2 weeks (I believe it's 2 weeks ) to find you a loan and if they are unable to, they have the right change the terms/interest rate/contract and if you don't agree, the new car goes back...it's all in the fine print on the back of the contract.

[BassBoy]

I would wait until you have the new car and a 1st payment has been made. Also, just in case you weren't aware, just because you leave the dealership with a new car/contract, it doesn't necessarily mean you've been approved for the loan. They have 2 weeks (I believe it's 2 weeks ) to find you a loan and if they are unable to, they have the right change the terms/interest rate/contract and if you don't agree, the new car goes back...it's all in the fine print on the back of the contract.

This is called Spot Delivery and I advise against it. DO NOT..........I repeat, DO NOT leave the dealership with a vehicle unless everything is finalized. Spot Deliveries are a scam, and 9 times out 10, something always goes wrong. On top of that, if there is a new agreement that must be made because of credit issues, the dealership will back date the new terms to the day you left with the vehicle if you except the new terms. This is not legal.

I'll repeat myself again, DO NOT EVER leave any delearship with a vehicle unless all of the paperwork (loan, title, registration and etc) are finalized.

[liz417]

This is called Spot Delivery and I advise against it. DO NOT..........I repeat, DO NOT leave the dealership with a vehicle unless everything is finalized. Spot Deliveries are a scam, and 9 times out 10, something always goes wrong. On top of that, if there is a new agreement that must be made because of credit issues, the dealership will back date the new terms to the day you left with the vehicle if you except the new terms. This is not legal.

I'll repeat myself again, DO NOT EVER leave any delearship with a vehicle unless all of the paperwork (loan, title, registration and etc) are finalized.

I never heard of the term "Spot Delivery", all I know is I went into a big local dealership and got "approved" and within that month I started getting "rejection letters" from loan places. A month had passed and I still hadn't gotten a payment book for my new car. I called the dealership and they told me they were *still trying* to get me a loan. I also went on the internet and researched this part of the contract and learned that a dealership has 2 weeks to -find- a loan and they have the right to take back the car if you don't agree to the new terms! I was very worried, if I would have known of this "clause" in the contract, I would have NEVER have traded in my vehicle. Eventually, my loan was approved at the original terms.

[BassBoy]

The Spot Delivery

So you purchased a beautiful new car, signed all the necessary paperwork and drove it right off the lot with a big smile on your face. The dealer got you approved on the "spot". Or so you thought.

A few days or weeks later, the dealer calls and asks you to return to "sign a few more papers". "Mr. Smith", they say, "we couldn't get the car financed and you need to sign a new loan with another bank" or "you need someone to co-sign", or "give us another $1000 and we can do the deal", or "Mr Smith, we need to increase your monthly payment to get this done". The dealer may even have delayed paying off a traded vehicle loan or refused to mail registration papers, all to place additional pressure on the consumer to do as they are instructed or to face dire consequences to their credit.

Sound familiar? It gets worse.

If you refuse, the dealer may threaten to repossess the car, tell you that you have no legal entitlement to keep it or even make you wait for hours at the dealership under some excuse, to wear you down. This situation is most common involving consumers with bad credit, since dealers perceive that such people are vulnerable and easy to take advantage of.

Most consumers assume the dealer is telling the truth and will do whatever the dealer says, resulting in higher payments, additional money being spent over the life of the loan and/or thousands of dollars in increased "hidden" costs. Those who refuse, see their cars repossessed.

What is happening here? It's a Scam. Dealer Fraud. Unlawful. Illegal. Call it what you will. The industry has given it a name: Spot Delivery, a description which refers to the dealer placing a consumer in a car "on the spot", to get the sale, only to "yo-yo" them back at a later date for additional funds. Played to perfection, a dealer can reap thousands of dollars in unearned fraudulent gain.

What to know about Spot Delivery: If you signed purchase documents and registration applications and if you obtained insurance for the vehicle, had a new license plate put on the car and/or had your old plate transferred, the car belongs to you.

Spot Delivery happens to unsuspecting consumers throughout the United States. It is very popular with dealers in Pennsylvania, New Jersey and Delaware. If you find yourself in this situation, the chances are good that you have legal remedies available to right this wrong.

Tools to Protect Yourself from Spot Delivery or Dealer Fraud:
1)Remember that if you have signed papers, you own the car, regardless of whether the vehicle has been financed.

2)Your credit was good or the dealer would not have delivered the car to you at the price you agreed to pay

3) A finance document showing payments, deposit, interest rate and other financial items is a binding contract, giving you specific legal rights.

4) You own the car subject to making payments only. The dealer cannot change that once you take possession.

5) Keep all copies of your paperwork and anything else associated with the sale (including calendars, photographs, advertisements). If the finance manager asks for your papers at any time for any reason, refuse! Keep these documents in a safe place, not the car.

6) If you are called back to the dealership to sign additional papers, either do not go or do so in a different car than the one you bought.

7) Have a friend or spouse drive you and witness whatever is being told to you. This will prevent the dealer from taking your car as hostage, an all too common happening.

8) If a dispute arises with the dealer over the contract and the dealer demands the car is returned, park it in a garage or remote location until the matter is resolved, to prevent it from being taken against your wishes.

9) Put together a complete timeline of everything that happened from the time you thought of purchasing the car until the car was taken away. Try to remember specific names of dealership personnel and any statements that were made to you during conversations with the sales and finance staff.

10) Keep track of all monies you had invested into the purchase, including registration, insurance, down payment and trade. Never pay cash and always get a receipt!

http://www.lemonlaw.com/spotdelivery.html

My thoughts: There aren't too many dealers that I believe would let you bring back the vehicle without any hassle. They are in the business of selling vehicles and it's all about making the sale.

[liz417]

EXACTLY!!!! Thank you BassBoy for giving us the heads up on this scam!!! Also, I had an additional *problem*, the vehicle I traded in had been an older vehicle, so there were no monthly payments to be made. I was *told* that my vehicle wasn't there anymore and they would *refund* me what the traded value was...$400!!!!! My car was worth WAY MORE than that, but since I was getting a new vehicle, I accepted the trade in value!!! I was afraid that I would be without ANY transportation!!! I couldn't believe it!! I told our salesman that I was going to make out my monthly payment and send it to the dealership and THEY could decide what to do...I never returned to the dealership with the vehicle and I got a payment book the next month

[BillyRip]

Thank you Liz & Bass! I can ask if everything is finalized, if they tell yes verbally, and it's not in black & white, am I hosed?

They did ask if I am going 7 or 13, and if I have had my 341 yet.

The thing is, if it's a scam, I don't have to reaffirm do I?

[BassBoy]

Again I say, if you do not have the paperwork, do not leave with the vehicle. Any delaership is capable of trying to get anyone financed while you sit and wait. They let you leave with the car so you fall in love with it and want to keep it.

It's hard to prove if the dealership actually scammed you. Even if you agreed to the new terms, you could fight it if you felt you were ripped off. In any case, you would be liable for any financial agreement you make. You won't never have a loan on this vehicle if you accpeted the vehicle prior to arranged financing (Spot Delivery). Eventually, the dealership will get the financing and you will have documents showing that. The loan will be like any auto loan. The Spot Delivery is a dealer thing and not a lender thing, so the lender would want to be paid for what they loaned to you.

[liz417]

I thought my contract was *finalized*, so obviously I'm the wrong person to ask about this!
No you don't have to reaffirm, but if they took the car back, you would be without a car, your down payment and a bunch of wasted time.

[BassBoy]

No you don't have to reaffirm, but if they took the car back, you would be without a car, your down payment and a bunch of wasted time.

Exactly. You could let the loan do a Ride Through. This is where you retain the secured item and continue to make payments. The Ride Through was an option under the old law, but is no longer an option, but some lenders still allow this.

I do not believe you could surrender this vehicle if you BK'b shortly after purchasing the vehicle. I can't remember what the waiting period is though...........if there is one.

[BillyRip]

Thanks again folks. The education continues.