When you buy a new car, you likely trade in your old one. But one couple found after they traded in their old cars, they still owned them. The dealer never paid off their trade-ins.
Demi Sefton and her fiance, Fernando Rocha, wanted a Jeep that would more comfortably carry Kya, their pooch.
"When I walked into the dealership, I knew that I was upside-down," said Sefton.
Even though she owed more on her car than it was worth, she still hoped the dealership would accept her trade-in and allow her to buy a Jeep she could afford. Instead, she says employees had a suggestion.
"They told me you would just be a loyal Love Field Jeep customer. Every time you want to trade in just come back to us, and that way you can just let your Honda go," said Sefton.
But she knew if she "let it go" it would mean defaulting on the loan.
"I go, 'That's not an option. I've worked way too hard on my credit to fix it,'" Sefton remembers telling dealership employees.
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She says finally, the dealership presented a financing option with payments she could afford.
"So they came in and said, 'OK, we'll eat this negative equity and get your payment on down to $620. Can you do that?'" she remembers being told. "And I go, 'You know you met me really close to what I wanted. Let's do it.'"
Her fiance bought a truck and also traded in his Honda, or so he thought. He, too, owed more than his car was worth. But the dealership crunched the numbers.
"So we did it, and we were both happy," said Rocha.
They were thrilled until about three weeks later when their lender contacted them saying their payments were late for the Honda cars they had traded in. They went back to the dealership, and said an employee told them the dealership had no plans to pay off the cars.
"'You left with the understanding you were letting the car go,'" Sefton remembers an employee telling her.
Now she was angry. She says she'd been led to believe she was trading in her car.
"They'd asked me for my keys, they'd cleaned out my car. He even asked me for my second key," said Sefton.
At that point she asked them for her keys back.
"He just handed us the keys and said, 'Have a nice day,'" said Sefton.
She spotted her car in the giant lot, and what she found shocked her.
"I saw written, in white letters, 'REPO' across my windshield,'" said Sefton.
She decided if the dealer wouldn't pay off their cars, they would be keep them and struggle to make payments.
"Here we are three weeks with later four cars – four cars between the two of us," said Rocha.
The enforcement division of the Texas Department of Motor Vehicles is investigating this case. Bill Harbeson is the division's director.
"It would be a violation of our rules if they did not fill out the proper paperwork at the time of the transaction," said Harbeson.
State law mandates that her retail installment sales agreement include a disclosure form that indicates how much the dealer is paying for the trade-in, how much the customer owes, and the equity amount. The state legislature passed a law in 2009 making the form mandatory and lessen consumer confusion regarding the value of their trade-ins and the equity. Sefton says she didn't get one. When she asked about trade-in documentation the employee left the room.
"He said, 'Let me go check on it,' so he walked out of the room, came back in and he goes, 'No we're good. We've already done the trade-in,'" said Sefton.
She said that led her to believe there was no more that legally needed to be done.
NBC 5 Responds emailed the dealership's general manager.
"I would say almost a couple of hours after you sent the email because you copied me on it, he called me," said Sefton.
The general manager agreed to take back the trade-ins and pay them off. Both cars totaled more than $54,000.
"I was happy! I only had one car payment again!" said Sefton.
She and her fiance are happy with their newly bought vehicles, but she has advice for others.
"Don't trust anything they say until you read it for yourself in the paperwork," she said.
That's the DMV's advice as well. With their help, here's advice from the NBC 5 Responds Team.
- Read your retail installment agreement very carefully.
- Read your trade-in disclosure equally carefully.
- Research the value of your trade-in before stepping foot on the lot.
There are a number of websites that make that research easy. Kelley Blue Book, AutoTrader, Edmunds.com and the National Automobile Dealers Association are great resources. You can also check out the prices of cars like yours that are being auctioned on Ebay. If you'd prefer face-to-face interaction, you can get a free appraisal at a CarMax store. There are several in North Texas.
As for Love Field Chrysler Jeep Dodge Ram, the general manager did not answer repeated questions regarding why the dealership didn't initially pay off the couple's trade-ins. He wrote, "I personally met with Ms. Sefton on Saturday evening and was able to resolve her complaint. I only wish that I had known about her issue earlier. Love Field Chrysler Jeep Dodge maintains a very high ranking in Chrysler's national consumer satisfaction index."