Sometimes car buyers decide to trade up the car they are driving to a more expensive car even before they have finished paying off for that car. The most common way to do this is “rolling over” the remaining payments on the current car into a new car loan or lease.
Though this is not illegal, it can be risky, because the car buyer may end up owing more on the second car than it’s worth. In the terms of the automobile world, the car buyer will be “upside down” in the vehicle. In case the vehicle is totaled in an accident, or in case the car buyer decides to trade the vehicle in, the car buyer will have to write out a big check to cover the remaining amount of the loan.
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