What happened here? Can anyone decipher Westlake's accounting on a car loan?

[traveler505a]

A friend's son bought a used car from a small used car dealership (the type where one large lot is shared by multiple dealers) in July (July 11, I'm guessing).  Price was $1500 down and $6315 financed through Westlake.

 

He attempted to make the first payment online in August, but couldn't.  So his mom mailed a money order to Westlake, using an address she found online.  That payment has never been credited to his account.  

 

As of today, Westlake's website shows the following:

 

Amount Financed:  $6,315.00

Term:  48

Annual Percentage Rate:  25.99%

Payment Amount $159.83

 

Under "Transactions":

Payment  07/11/23

Amount:  $4,736.01

Balance:  $0.00

 

The Westlake website shows a balance of zero, and won't accept payments.

 

Back in August, Westlake reps were assuring them that everything would be okay because they had a record of attempting payments, but mentioned the possibility of the loan going back to the dealer in the event of default.  (I thought there might be an agreement that the dealer would be forced to eat the loan if the first payment wasn't made.)   Today, Westlake asked him for his address so they could mail the title.  The dealership says they have no idea what is going on.

 

The monthly payment amount on the note was $212 and change, which would correspond to the $6315.00 loan amount.  The payment amount shown on the Westlake website ($159.83) would correspond, within a few pennies, to the $4,736.01 shown as the 07/11/23 payment amount.

 

Does anyone know how to interpret this?  Why is an imaginary $4,736.01 payment (showing the date the loan was originated) paying off a $6,315.00 loan?  Did Westlake sell the loan or push it back on the dealer?  Did they apply someone else's payment to his account?  Should he be expecting a repo truck if he gives them his address, since there are now two missed payments?  

 

Thanks for any ideas or advice for him.

 

 

 

 

 

[MarvBear]

I have never managed to successfully place a loan with Westlake. After all my years in the business they seem not to be worth the trouble from a Finance Mgr's standpoint..

[traveler505a]

The most recent communication saying that the title is being mailed to my friend's son was from the dealer.

 

Westlake, according to their web site, also does floor plans for dealers.  Perhaps this is crazy, but some of the comments from Westlake reps (which I heard second-hand) made me wonder whether the dealer had a floor plan that gave Westlake recourse against the dealer if the borrower didn't make his first payment, 

 

In other words, the $4736.01 would be the amount loaned to the dealer under the floor plan, with $6315.00 being the amount loaned to the borrower.  When the car sold, the dealer would have repaid Westlake the $4,736.01.  Then, because the buyer defaulted immediately, Westlake cancelled the loan to the buyer and added the $4,736.01 back to the amount owed by the dealer under the floor plan.  It would then be the dealer's responsibility to repossess or refinance the car, at which point, everyone would be back to where they started before the sale.  (This would also mean the dealer is either lying or clueless.)

 

That is the only way I can make sense of the numbers on the Westlake website,  But I know nothing about floor plans (and not much about auto loans), so I have no idea if this sort of arrangement is vaguely possible.

[MarvBear]

That is not how floor plans work.  Westlake may indeed provide floor plan assistance to some dealers, but that's not how it works.

[MarvBear]

And something is seriously wrong with your payment calculations.

 

48 months at 25.99% for a payment of $159.83 equals ~$4740.00 for an actual loan amount.