Last month, I purchased a CPO Toyota from a prominent dealership in northern California. As part of the deal, I traded-in my 2016 Toyota Highlander, in which I had substantial equity. The dealer currently has my trade-in listed for sale in their used car inventory.
The payoff for my trade-in posted in late May, and my lender closed that auto loan. However, yesterday the lender sent me a letter telling me that the dealership's payoff had been returned and the lender was reopening my auto loan!
Has anyone experienced a situation where the dealer's payoff check bounced? I've written to the dealership's general manager, finance manager, and used car manager, asking them to make good on their payoff of my trade-in. But what other recourse do I have if they don't pay what they owe for my trade-in under the sales contract? Will I need to demand that the dealership return my trade-in?
Thanks, @Loquat. The dealership in question is 120 miles away, so I can't just pop in and ask, "What gives?!"
I'm a lawyer and thus well-aware of my legal recourse. Hopefully it won't come to that. In California, dealers are required by state law to pay off a trade-in within 21 days. They originally sent payment in 17 days, but that payment was returned. It's now been 47 days since I traded in the vehicle.
In addition to writing the General Manager of the dealership, I sent a complaint to Toyota USA as well. Hopefully that will get their attention and the dealer will overnight payment to my lender. If not, I'll have to escalate my response by filing a complaint against the dealership with the relevant authorities...
@Loquat wrote:Best of luck to you. And for what it's worth, this issue is big enough in my opinion to take the 120 mile drive.
You guys are so old-fashioned! What would confronting the dealership in person accomplish that I can't do via Email, phone, or text?
These days, social media can ruin a business in record time. Ever heard of the "cancel culture"? That's not lost on the management of the large Toyota dealership where I bought my car. They're highly unlikely to allow this situation to stand. All I would have to do is post my situation on Yelp, Twitter, Facebook, etc. If the dealership gets a reputation of not paying for trade-ins, no one will risk buying a car from them.
Yesterday I wrote a polite but firm letter to the General Manager (copied to the Used Car Manager and Finance Manager), asking them to make the situation right. I heard back from the GM early this morning, promising to investigate the matter and get back to me shortly.
In my experience, these kinds of problems are best handled in stages. Start off polite and escalate the situation only when necessary. Steaming into the dealership all hot under the collar and demanding payment for my trade-in wouldn't necessarily be helpful and could make matters worse. I can always resort to social media and notify the authorities if I don't get satisfaction from the dealership.
Well, one of the benefits of being there in person is if they want to get rid of you, they need to make it a priority. Versus them circulating some CCd emails around until someone gets around to it. Relying on tarnishing their reputation on social media is meh. There are plenty of businesses with horrible reviews still in business. Heck, I just learned my credit union was 4th highest rated in my state despite poor reviews and ratings. Honestly, you'd probably do more damage to them walking around the dealership telling prospective buyers about your situation while waiting for them to resolve it. Guarantee they'd be getting you out of there asap in that situation.
I heard back from the dealer's Finance Department this morning. Turns out the dealership sent a second check a week ago via FedEx to payoff my trade-in.
Apparently it takes Chase Auto more than a few days to post payoffs once they receive a check. I called Chase Auto today and the CSR asked their research team to investigate. Hopefully this is a minor screwup and Chase will post my payoff and close the account this week before the next payment is due.
At this point I can't tell whether the Toyota dealer or Chase Auto is responsible for this situation. Checks do get lost in the mail; I'm a little surprised that businesses still exchange checks in this era of online payments and wire transfers. Whatever the case, it appears that the situaiton will be resolved soon. Thanks again for your thoughts!