"WesBarton89 - The Way to Santa Fe" (wesbarton89)
11/26/2014 at 13:49 • Filed to: None
1
5|
"WesBarton89 - The Way to Santa Fe" (wesbarton89)
11/26/2014 at 13:49 • Filed to: None | 1
| 5 |
This might be a question best answered by someone like SteveLehto, but I'm not sure.
What happens if you finance a car directly through a dealership, and midway through your ownership of the car, the dealership goes under?
Now, I am not in this particular situation, but there's a reason I'm asking. A while back, I did have a car financed through a dealership. Sometime afterwards, a finance company bought out all the financing, so it was handled through this new financing company. Some months later, in what I don't believe is entirely coincidental, this dealership is going through some legal issues, and may end up shut down. Now, since this dealership sold out its loans, I assume, we would continue the payment through that new company. I no longer have a car through that dealership or finance company, so that doesn't apply to me so much, but it did raise the question.
However, if that DOESN'T happen, and the dealership financing remains in-house when they go under, is there some sort of hazard payment (for lack of a better term) type of thing? Or is the financing forgiven, and you just own the car outright from that point? I figure a dealership has to have some contingency plan in effect for this type of thing, but I'm not sure. Anyone able to help me out here?
TL;DR: What if a dealership you are financing a car in-house through goes out of business? Do you pay back the car somewhere else or just own the car outright from that point?
Have a "new 'Cuda" for your time.
itschrome
> WesBarton89 - The Way to Santa Fe
11/26/2014 at 13:52 |
|
Debt buying an selling is HUGE business! there are entire companies based solely on this sort of thing. if a car dealership was doing financing and they were going to go out of business due to money issues, the sale of all their loans alone would probably keep them alive.
|
WesBarton89 - The Way to Santa Fe
> itschrome
11/26/2014 at 13:53 |
|
Hmm, that's interesting. I figured that would be a big business. Maybe that's why the dealership I financed through did that, to keep afloat financially, but now they're in hot water for selling a car that was stolen, and apparently there are some possible money laundering issues involved as well.
davedave1111
> WesBarton89 - The Way to Santa Fe
11/26/2014 at 13:58 |
|
I'm not sure quite how it works in the US, but in general if a company goes bust the administrators/receivers/liquidators will sell off their assets for as much as possible to pay their debts. The amount you owe on the loan counts as an asset in that regard, so the loan would be sold-off to someone else.
Grindintosecond
> WesBarton89 - The Way to Santa Fe
11/26/2014 at 14:02 |
|
I would assume the loan, however financed, is underwritten and insured. If the facility that owns the loan goes under, the loan doesn't disappear, it's an asset with value so someone would wind up with it through buying it off of the leftover assets or assuming ownership due to their position to the rights to the leftover debt. If they dont sell it on like your post stated, it would be transferred during the bankruptcy process during liquidation of the dealership.
and the loan would continue to be paid to that new owner of the note.
Mr. Ontop, No Strokes, No Smokes...Goes Fast.
> WesBarton89 - The Way to Santa Fe
11/26/2014 at 14:51 |
|
Your debt to that company will be sold off for a percentage on the original debt. Here's the kicker, you won't be able to buy it that way, you'll still be on the hook for whatever amount you still had left.