Auto Loans from Dealers

The auto loan industry is in a whole mess from the economy that many just didn’t see coming. Because of the economy, there have been a whole slew of auto loans that are now considered outstanding, and previous owners are now responsible for auto loans that should have been taken care of by dealerships that are now closing their doors.

What happens is that when you get a new auto loan, and you trade in your old vehicle, you assume that you never have to look at the car loan that was due on the old car again. However, this is not necessarily the case. When a dealer assumes the car loan and lets you off the hook for it, they are then responsible for paying it off.

But with so many car dealerships now going under, there are auto loans that are not being paid. The dealership is no longer able to pay the loan, so the lien holder now goes after whoever owns the car now, or who had the car before. It is up to the holder of the lien as to who they go after, and either one can be held responsible for the unpaid auto loan.

Now people are looking at problems because they have two auto loans that they are responsible for – and only one car – because they are now taking responsibility for the loan albeit unwillingly. Because the dealer defaulted on the auto loan, the current or previous owner of the car is now seeing their credit get damaged. If you sold a car that still had an outstanding balance on it, and your dealership closed, do not be surprised if someone comes knocking on your door to collect the balance.

 

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