Is it Fraud? Or a blessing in disguise?

[IOBA]

It sounds like....

1.  The owner of the vehicle had a car loan on the vehicle.  

2.  The previous owner traded in or sold the vehicle to the dealership.

3.  The dealership was to pay off the existing car loan.

4.  The dealership did NOT pay off the existing car loan.   (It happens!)

5.  The lender (previous owner) will not release title because the vehicle has not been paid for.   (That is their right if they feel money is owed to them.)

6.  The car dealership, without title in hand, sold the OP the vehicle.  (It happens, but should NOT have.   That might be considered fraud.)

7.  The OP was financed through a different lender.   (Financed in good faith - they do not require to see a copy of the title before agreeing to finance the loan.)

8.  The OP has been faithfully making payments to HIS lender.

OP - I am sorry this has happened to you.   I guess, for me, in the future, I would require seeing the title at the dealership before buying a car.   It would be awkward for me to ask, but it's the only way I can think of to prevent this scam.

If this is an honest mistake (they do happen!), and the lender (previous owner) is holding  title for a small amount of money, I would encourage the dealership to pay it immediately.   Paying a small amount of money to release title is much better than facing fraud charges.

1.  BBB complaint.

2.  AG complaint.

3.  Find out who is the registered owner asap!!!   Contact them if possible.  All it would take is for the previous owner to find out that they are "late" on their loan, which means it wasn't paid off as thought, and they can claim the vehicle was stolen.   Then the OP is in a world of hurt.

4.  When the previous owner realizes, if they ever do, that their loan is NOT paid off, they will probably be very angry.   And they could retaliate.

5.  What happens when it comes time to renew the tags?  Someone has to pay for that.  If it's late, there are late fees.

6.  Do you have personal property taxes?   If you do, and they are not paid, the DMV could put a lien on the vehicle and suspend the registered owner's license.  

Please keep us informed about what is happening with this situation.

[Fleurdelis28]

IOBA,

It is EXACTLY the way you guessed...but now I am the one getting screwed in the process. And my only option to go throught this probably lengthy legal battle with the dealership which in the end may turn out with me being out a vehicle that I've been faithfully making on-time payments on for almost 7 months, plus I also put down a substantial size down payment. ***sigh***

I am seeking attorney representation immediately. Thanks everyone for your advice. I was procrastinating, but now I see that I really need to move on this.

I'll keep you posted

[IOBA]

I would suggest asking the attny to find the current legal owner and bringing them into this.   That person is totally being screwed financially as well.    Ask the attny about bringing in your lender as well - since they want you to pay for something they don't own (they dont' have title in hand) and they are unlikely to take kindly to being screwed by the auto dealership, and they aren't going to release you from your financial responsibility.   

There are four injured parties here -

YOU

YOUR lender

previous owner (still current legal owner of the vehicle)

previous owner's lender

Definitely contact the DA's office and file a complaint!   FRAUD!!