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faztcobra

What can you do to make a dealer stop shopping a loan?

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Marv, this is directed more towards you, but hopefully someone has some knowledge on this. I'll make this as short as possible. Co-worker got a car from Kia. Traded in a paid off Escort that only had liability coverage. Dealer let him leave the lot and the car was in an at-fault accident before the insurance could be upgraded to full coverage. Bank that was gonna lend the $$ found out and didn't fund the loan. They obviously wouldn't want to fund a loan on a wrecked car that the consumer is likely not gonna pay for since it is practically totalled. Consumer can't afford to repair said car. Because of this, my co-worker goes and gets a Ford Fusion. Anyway, 3 weeks have passed and co-worker gets a call from a lender to verify some info. Lender asks how he's liking the car, titling questions, etc. Co-worker then realizes based on the line of questions, that the lender is asking about the Kia and not the Fusion and proceeds to tell the lender what all happened and now of course, this lender isn't funding the deal either. The dealership is still shopping this loan to various places and trying to sucker the bank into making the loan on a wrecked car. The dealership doesn't want to take responsibility here (and I can't really blame them, but that's not up to me). They just need the loan funded so they title can be issued and they can stick it to my co-worker. This has got to be illegal and/or fraudulent. I've talked co-worker in to signing up for BofA Privacy Source and he can see the inquiries. I've advised him to be pro-active and call the banks that are shown as having pulled his credit. Is there any avenue he can take here? The dealership takes messages, but no one ever calls him back. I'll get more info if needed, but this is just a starting point. This is in Texas BTW in case that makes any sort of difference.

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isnt texas a state where your insurance is automatically covering your car for up to 30 days after purchase? evidently the dealer screwed up by not checking what kind of insurance your co worker had and is still trying to get paid. I would put them on notice not to shop the loan anymore. the dealers insurance will pay them on the car minus their deductible and the insurance company will go after the co worker or the party at fault.

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isnt texas a state where your insurance is automatically covering your car for up to 30 days after purchase? evidently the dealer screwed up by not checking what kind of insurance your co worker had and is still trying to get paid. I would put them on notice not to shop the loan anymore. the dealers insurance will pay them on the car minus their deductible and the insurance company will go after the co worker or the party at fault.

I think it is, but I think the coverage is carried over from car to car. And that's the crazy thing. He knew the coverage wasn't up to date, so he let his wife drive the car - her car has full coverage - and he figured if anything happened, they'd be covered because she had full coverage. Their insurance company didn't see it that way though. They said that since he traded in a car that had liability, the new car (automatically) only set up for liability. I agree, I think the dealer insurance should cover this since it was their responsibility to verify full coverage before he left the lot.

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I disagree that it is essentially the dealer's responsibility to verify coverage. It's actually the consumer's responsibility to comply with the lenders and State's insurance requirements.

 

However, with the current litigious atmosphere, where it's always the dealer's fault for everything, I will NOT let a vehicle leave without having the insurance policy verified when I finance one.

 

I believe in this case, the dealer's insurance policy will kick in, and they will pursue the at fault party. All the dealer will be out of pocket is their deductible, which is usually 1,000.00.

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Thanks Marv. Any idea on what to do to get the dealer to stop shopping the loan though? In your opinion, do you think it's illegal? Or just immoral?

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Thanks Marv. Any idea on what to do to get the dealer to stop shopping the loan though? In your opinion, do you think it's illegal? Or just immoral?

 

 

I'd think that the dealer probably don't have a very good relationship with that lender. Were that to happen to me, and it has in the past, I'd manage to get the contract slammed thru.

 

I don't think illegality or immorality enters into the picture here.

 

They sold a vehicle in good faith, to a consumer who is responsible for providing the proper coverages insurancewise.

 

In the credit world most of us just assume things will take care of themselves and that's why we landed where we are and sought the help of creditboards.

 

IMO, and I'm not taking sides with the dealership, but your co-worker friend should never have left the dealership until he/she was assured that the automobile was properly covered.

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I'd think that the dealer probably don't have a very good relationship with that lender. Were that to happen to me, and it has in the past, I'd manage to get the contract slammed thru.

 

I don't think illegality or immorality enters into the picture here.

 

They sold a vehicle in good faith, to a consumer who is responsible for providing the proper coverages insurancewise.

 

In the credit world most of us just assume things will take care of themselves and that's why we landed where we are and sought the help of creditboards.

 

IMO, and I'm not taking sides with the dealership, but your co-worker friend should never have left the dealership until he/she was assured that the automobile was properly covered.

More details. In this case, my co-worker tried to do the right thing. Actually did the correct thing. He bought the car on a Friday night after lender/insurer/everyone was mostly closed for the evening. He called his insurer at 8:30am on Monday morning when the ins co was open again and updated his coverages. For who knows what reason (and I'm not sure who the ins co is) - the insurance (new coverage levels) wasn't to take affect until the following day at 12:01am. Then his wife had the wreck around noon or 1ish. Who knows who is right. I'm not worried about it too much though since its not my issue. Just thought I'd see if there was some advice I could give him about getting the dealer to stop trying to push the loan through when it knows the car is wrecked.

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Actually fazt I don't think you can.... Instead of expensing the loss to their insurance company they are trying to shortcut the deal and trick ANOTHER lender IMO.

 

Perhaps, if your friend would send them via CMRRR a letter telling them of their disinterest in the auto loan, suitably expressed, that could work to prevent further inquiries.

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I would take the opinion that the dealer is commiting bank fraud by trying to get a loan for a car that is wrecked, and misrepresenting it as a new car.

 

One way or another though, he or his wife is going to have to pay for that car. The dealer's insurance should cover it and then subrogate their loss back to whoever was driving the car at the time. Don't even test-drive a new car unless you have an insurance policy with "full coverage" on one of your other cars.

 

It is kind of an interesting question exactly how much will be paid. The "actual cash value" of a new car to a dealer would seem to be the wholesale price. The amount on the purchase contract is not so relevant because the deal was never completed.

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I would take the opinion that the dealer is commiting bank fraud by trying to get a loan for a car that is wrecked, and misrepresenting it as a new car.

 

One way or another though, he or his wife is going to have to pay for that car. The dealer's insurance should cover it and then subrogate their loss back to whoever was driving the car at the time. Don't even test-drive a new car unless you have an insurance policy with "full coverage" on one of your other cars.

 

It is kind of an interesting question exactly how much will be paid. The "actual cash value" of a new car to a dealer would seem to be the wholesale price. The amount on the purchase contract is not so relevant because the deal was never completed.

 

What do you mean the deal was never completed? All paperwork was signed. End of story. The co-worker has the responsibility to pay for the car. He took the car, signed a note, then crashed the car. How is the dealer at fault here?

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this was all in nj.

 

when i bought my car, the dealer covered me with their insurance for 7 or 14 days (i can't remember). they added it as a courtesy (and a line item on the contract for $75 IIRC) since i didn't have full coverage on my old car. they said i needed to add it asap though for the lender to take the loan.

 

when i bought my truck, the dealer then verified that i had full coverage before they let me drive off the lot, they were going to cover me with their insurance if i did not have it.

 

seems the only fault of the dealer was not verifying coverage.

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