Title Fraud With Your Trade-In
This is a typical car deal to show how a car dealer commits title fraud with your trade-in. Let’s assume that one is doing business with the crooks from Escondido and he just traded-in a 2004 Volkswagen Passat. He bought the car 3+ years ago and he has 10 months of payments left at $375 per month. As part of the deal they give him $14,000 for the car. Now he still owe $3,750 on the Passat so the dealer is putting $10,250 towards the purchase of a new car and they will pay off the remaining $3,750 he owe to the bank for the Passat, a very typical car transaction. In most states by law the dealer has between 3 to 5 business days to complete the deal by paying off his old Passat’s bank.
This is standard car dealer business but some dealers use a scam so they can hold your trade-in’s title and use that money for themselves. They might wait a month, two months or maybe plan on never paying the $3,750 to the Passat’s bank. A dealer does this so they can use that money without permission, interest free. And while they commit title fraud their customer’s credit gets damaged. Who do you think is responsible for the $3,750 still owed on the Passat in our example, you guessed it. ME! A car dealerpulling this scam will do a great job of lying to the lender and customer to put off having to pay off the trade-in for as long as possible.