Loan Payoff Scam. How To Avoid It?
We often hear radio ads from dealerships about paying off your current auto loan no matter how much you owe or no matter how much you are upside-down. That just does not sound realistic. If you think they are just going to pay off a $5000 or even a $1000 car loan on your behalf then you are asking to be defrauded! This is how the loan payoff scam works.
Let’s look at the issue in more detail. Imagine you want to buy a new car and trade in your previous vehicle which is still being paid for. If your loan payoff is more than your trade in, then you are facing the problem of negative equity. For example, your loan payoff may be $20,000, but your car as a trade-in may be worth $15,000. These numbers do not speak for your benefit. You had better wait until you pay off the loan and then try to trade in the car.
No dealer will tell you to go and come in a year or so to be able to trade-in your car. Of course, they will try to practice what is called loan payoff scam by promising you to pay the negative equity you have. It is a lie. They will not pay anything; they will rather resell the vehicle or give it as a lease car.
If the loan isn’t paid off in time the car may be repossessed (depending on your state law requirements) and this will have an irreparable impact on your credit history.
In order to avoid becoming a victim of loan payoff scam, make sure you are dealing with a trustworthy dealership. Try to deal with a dealer or a sales manager you have had business with before.
The loan payoff scam is one of the common car dealer scams practiced by dishonest auto dealers. If you or someone you know has been a victim of such a scam, turn to the Law Offices of Hovanes Margarian for legal help.