My 84 year old mom has been duped at a car dealership

[andy158]

Here is the situation: Three months ago my mom went to a car dealer to "look around" at used cars because her's would not pass state inspection because of unrepairable rust. In short they talked her into purchasing a later model car and got her "magically" approved for financing. With her trade in of $500 all she had to do was sign and drive her new car home. She did not read all the fine print and is now stuck with a car payment she cannot afford. Her monthly income is $1300 and the car payment with the full coverage insurance is $450 per month. I asked her to take the car back to the dealer and cancel the deal, but they said no. You signed the paperwork and you bought the car. If you can't afford the payments you will have to deal with the bank. They claimed her trade in was already sold anyway.

I am positive they inflated her income to secure the sale. There is no way she would have got a loan for that amount if they went off her income vs expenses. I cannot get a copy of the dealers loan application because they "did it online". They refuse to deal with me because I had no part of the sale.

I suggested to let the bank repo the car and they said she would be sued for the balance after the car is auctioned. She has no assets and her retirement is 100% social security.

Any advice would be greatly appreciated.

[ksgirl38]

Sounds a little fraudish to me. Might take awhile to get a result, but you could try going through your state attorney general's office. I doubt this is the first time this has happened.

[Pjmax]

This might be a long-shot, but why not try an email or call to your local TV station. It seems like every station has a consumer reporter, or 'we're on your side' segment. Might be something they'd jump on, and could put pressure on the dealer to 'fix it.' Can't hurt to try, and would be faster than anything else you can do from a legal or formal complaint standpoint.

[HHM]

There are plenty of non-profit elder advocate groups in every state. You should search around and find one of those groups to help.

But, legally, it is an uphill fight. First, what exactly is the car payment. You simply mention what the payment is with full coverage insurance, what is the actual car payment. Unlike mortgages, there really aren't any hard or fast guidelines on debt to income or payment to income. If she has no mortgage on her credit report and no or little other debt, then from a credit stand point, she is actually a fair risk for the lender.

[tradinglife]

This might be a long-shot, but why not try an email or call to your local TV station. It seems like every station has a consumer reporter, or 'we're on your side' segment. Might be something they'd jump on, and could put pressure on the dealer to 'fix it.' Can't hurt to try, and would be faster than anything else you can do from a legal or formal complaint standpoint.

Good luck on that, most local stations get a large chunk of their revenue from dealerships tv ads, they will not bite the hand that feeds them.

[bcohen]

Have you personally looked at the paperwork which the dealer provided at the time of sale? I assume they did give your mom a copy of all the documents which she signed? If so, check and see what dollar amounts are given for purchase price, APR, and monthly payment. The insurance is not normally paid through the loan, as most people already have car insurance, and would prefer to continue using the same insurance company.

Assuming that the contract does not specify the principal and/or APR, or disclose the "required" lender-placed insurance, then yes, I'd say you have an easy way out of this. If the contract really does specify that the principal, APR, insurance, and monthly payment are exactly what's being charged, then the mere fact that your mom failed to read it does not excuse her from the deal. Even if they lied to the lender and said her monthly income is higher than it really is, that doesn't change anything.

That being said, if she can't afford the car, and it sounds like she can't, then she might as well quit paying, drive it for a couple months payment-free until it is eventually reposessed, and wait to see if she's sued. It may very well be that the lender will write off the deficiency balance because they know that Social Security is not garnishable--even when deposited in a bank account, and your mom is too old to ever work again--so no wages to go after. If she is a homeowner, and the house is not encumbered by a lien, or deeded to a trust (rather than in her name) then they will probably sue and try to place a lien on the house, so in that case, she would need to file for bankruptcy before a judgment is awarded.

[tradinglife]

Here is the situation: Three months ago my mom went to a car dealer to "look around" at used cars because her's would not pass state inspection because of unrepairable rust. In short they talked her into purchasing a later model car and got her "magically" approved for financing. With her trade in of $500 all she had to do was sign and drive her new car home. She did not read all the fine print and is now stuck with a car payment she cannot afford. Her monthly income is $1300 and the car payment with the full coverage insurance is $450 per month. I asked her to take the car back to the dealer and cancel the deal, but they said no. You signed the paperwork and you bought the car. If you can't afford the payments you will have to deal with the bank. They claimed her trade in was already sold anyway.

I am positive they inflated her income to secure the sale. There is no way she would have got a loan for that amount if they went off her income vs expenses. I cannot get a copy of the dealers loan application because they "did it online". They refuse to deal with me because I had no part of the sale.

I suggested to let the bank repo the car and they said she would be sued for the balance after the car is auctioned. She has no assets and her retirement is 100% social security.

Any advice would be greatly appreciated.

3 days after the sale you may have been able to do something, 3 months later, too late! What you can do is cancel any warranties and insurance she purchased (probably only purchased an extended warranty, no insurance). Keep in mind if you cancel these, they will come off loan balance, will not lower pymt. Next try to sell car for as close to loan payoff as possible, pay difference if you have to. Example car is worth 15,000, you owe 18000, pay the 3000 difference if you can. If this is possible this will give her more peace of mind than a repo or BK, most of us here have been there, it's no fun! The harrassment and stress from the collectors is not something an 84 yr old may be able to handle.

[bcohen]

As long as there is no real estate titled in her name, the deficiency balance won't really matter. As I have already said, no sane collection law firm is going to bring suit against a person who owns nothing, has no garnishable income, and who is too old to ever work again. If that is the case, then "harassment and stress" from collectors can be easily ended by sending out cease and desist letters.

[andy158]

She rents her home at $400/mo from me. She has no real estate or any other assets in her name.

The car payment is $310/mo on a 2010 Chevy Cobalt that books for around $11,000

The total amount financed is for $17,780. Yeah, she got taken.

[bcohen]

She rents her home at $400/mo from me. She has no real estate or any other assets in her name.

The car payment is $310/mo on a 2010 Chevy Cobalt that books for around $11,000

The total amount financed is for $17,780. Yeah, she got taken.

Well then it sounds like it's time to quit paying and let the chips fall as they may. If what you say is true, then I very seriously doubt they'll even bother to sue. And you have no incentive to give the car back now. Might as well keep it for a few months until the repo man takes it.

[tradinglife]

She rents her home at $400/mo from me. She has no real estate or any other assets in her name.

The car payment is $310/mo on a 2010 Chevy Cobalt that books for around $11,000

The total amount financed is for $17,780. Yeah, she got taken.

I misunderstood your first post, thought her car pymt was 450, not 310. 310 is pretty low as far as car pymts go. Sounds like you need to be talking to her car insurance company about how much they are charging her for insurance. As far as the Cobalt, unlikely if it "books" for 11000 the bank would finance 17000. There are a lot of different "books" that give used car values. Part of the amount finaced was taxes, and probably 2-3k was extra warranty. With the profit margin down on used cars these days, most dealers business model is to sell the car for a minimal profit and make it up on extended warranty sales. None the less that price range car you may be able to sale and not lose tons.

[andy158]

Yes they talked her int a five year extended warranty!

The bank contacted her today and she agreed to voluntary surrender the car. They are sending the paper work out and I will definately read every word before she signs it and returns it.

[angel7821]

Bless your 84 yr old mom andy158. Some people should be ashamed of themselves for trying to take advantage of the elderly. I hope she gets it all worked out in her best interest and finds something much more affordable.

[joshuagraham]

If she really has no assets that could be confiscated at probate (i.e., that you would inherit), and she doesn't care to get credit again, then she should just stop making payments until the car is repossessed, and then if a deficiency collection is attempted, just tell the creditor to pound sand.

[Voyles]

There is a special place in hell for people who take advantage of the elderly.