In response to dozens of complaints from consumers who were stuck struggling to make payments on vehicles they had traded in, plus the cars they bought, Washington State’s Attorney General ordered dealerships owned by Mark Gilbert to pay off the liens on the traded-in vehicles.
Washington state law requires auto dealers to pay off the remaining balance consumers owe on traded-in vehicles within two days after they make a new purchase. Typically, the amount owed on the trade-in — known as “negative equity” — is added onto the price of the newly purchased car.
According to the Attorney General’s office, “The Walla Walla County Superior Court..entered a preliminary injunction, ordering several Northwest auto dealerships owned by Mark Gilbert to comply with Washington dealer and consumer protection laws, requiring prompt payoff of customers’ trade-in vehicles.”
The Attorney General’s legal case involved car dealerships Gilbert owned that sold new Honda, Jeep, Dodge, Chrysler, Nissan, and Ford vehicles.
How can you protect yourself from this scam? The safest thing to do is to wait to buy your next car until you have paid off the loan on the car you are currently driving. Otherwise, you risk having both cars repossessed if the dealer fails to pay off the loan on the car you trade in. Plus you sink deeper into debt. And — always insist on seeing the title to the car BEFORE you buy. If the dealer doesn’t have the title, the lender for the prior owner can repossess your newly purchased car — even if you are making all the payments in full and on time to your lender.