Today, it is not in any current dealership’s best interests to sell a car back to an individual who financed the vehicle. They are prohibited by contract with their lender and/or manufacturer in most cases.
These companies will often require proof of ownership in writing (proof that you are no longer responsible for the loan), which can be difficult to come by if you are financed through your loan provider.
In rare cases where dealerships offer a return program, they typically involve conditions like an extended warranty or promotional financing on a new vehicle purchase instead of higher interest rates. The following is a process s to follow when you want to return a car after financing it;
Key Processes To Return a Car After Financing:
1. If you financed your vehicle through your loan provider, contact them and request a payoff of the entire loan. This will be the best way to ensure you can take advantage of a return policy. If you financed through a third-party lender, contact them for more information on how to go about returning the car.
2. When returning your vehicle, it is important to know what type of sales agreement was in place (buyer or dealer) as this will determine who pays for costs associated with the vehicle upon its return.
If you bought the vehicle and financed it through your loan provider, always make sure that the dealer is okay with giving you written proof of sale which states that they agree to pay off any liens on the car.
If they do not agree to do this, you will most likely be liable for any liens owed on the car when you return it. If your vehicle was financed through a third party lender, it is crucial that you contact them and speak with a representative about returning the vehicle;
3. Determine whether the dealership requires that you pay off the loan in full before taking delivery of your new car. If so, ask for proof of payoff or a payoff letter from your lender to ensure that all debts have been settled before taking delivery of your new car. A few dealerships might still require that you make payments on the old loan until the new loan is fully paid off.
4. You might need to return your car in the same condition that it was in when you brought it. This means you should keep all of the original paperwork, including all service records, manuals, and warranties. Most dealerships will not accept ownership of a vehicle if there are outstanding loans or liens on the car, even if ownership is officially transferred over to you.
5. Make sure that your loan provider doesn’t require that you pay off the entire loan before your new purchase will be ready for pick up. If this is a requirement for taking delivery of the new vehicle, try to negotiate with the dealer to have them pay off the old loan so you can take immediate delivery of your new car.
6. If you plan to trade in your financed vehicle, you will either need to pay off the balance of the loan or give the lender a payoff letter in order to receive your trade-in allowance.
7. When returning a car after financing it, make sure the dealership fills out all necessary paperwork so that it can be transferred into your name as soon as possible; including listing yourself as the new owner and transferring all appropriate registrations and titles.
As previously stated, this is not an easy task so make sure you follow up with someone from that dealership after they pick up the vehicle. This will help get everything done in a timely manner and allow you to take delivery of your new car much quicker;
8. You can sign your new purchase agreement as soon as you take delivery of your new car. This is important because it allows you to take immediate delivery of your car within a certain amount of time after its return.
If you wait until the following day, it will most likely be on a Saturday or Sunday which will delay the transfer of ownership. This means that you could be waiting for a long time before you are able to drive off with your new car;
9. A few dealerships require that you pay for at least two weeks’ worth of mileage in order for them to complete the account transfer paperwork. Most of these dealerships require that you pay anywhere from 100 to 200 miles per week.
Try to maintain a decent amount of mileage throughout the entire period that you finance your new car and make sure the dealership gives you mileage for all the money you have paid for it. Most dealerships will let you drive off with your new car as soon as they complete all necessary paperwork;
10. Some states require that the lien holders on your financed vehicle can be offered a first chance at purchasing your used car(s). Whether or not this is required, many dealerships will allow a lienholder to buy or trade in a new car while yours is being repaired.
11. Some states do not require a dealer to consult with a lienholder before selling or trading in your vehicle, which means the dealership can sell or trade your car without contacting the lender. It is also possible for them to sell your car without informing you that they have done so.
Three states that do not allow dealers to contact lien holders are California, Missouri, and South Carolina; however, it is technically illegal for a dealership in any state to sell a financed car without first consulting with its lien holder.
12. Always request a payoff letter from your loan provider before returning the car so that you can ensure that everything has been settled before taking ownership of your new car. It is also important to have proof of payoff in order to make sure that you no longer will be liable for any liens on the car when you take ownership.
13. Contact the dealership and verify their policy for obtaining a payoff letter from their lender; make sure they can provide a proof of insurance document if requested before they ship back your vehicle, and remember to obtain a confirmation number in order to receive a refund? This will ensure you don’t get stuck with any potential extra costs when it is time to return your new purchase.
Disadvantages of returning the car after financing it
1. Some dealerships will not allow you to take delivery of your new car until they receive all the paperwork back, which means you could be waiting for a long time before you can take ownership of your new car.
You can avoid this by making sure that your paperwork is returned to the dealership in a timely manner.
If you are unable to receive proof of any payments at all, it may be best to let someone else have possession of the vehicle first so you won’t have to be responsible for whatever fees or penalties that come along with a delay caused by problems at the dealership;
2. Some dealerships do not offer payoff letters from their lenders but instead require that you show proof that your loan balance has been paid in full.
This can create delays in the transfer of ownership and even result in you gaining ownership of a car that still has a loan balance. Make sure you verify this information with your dealership to avoid any unexpected pitfalls;
3. The dealership may not be able to provide you with a promised trade-in allowance if they close your account before completing all the employment taxes, state and federal paperwork necessary to take ownership of your new car.
This means you will no longer be eligible for any extra money that was offered and will have to purchase a new vehicle from them;
4. Making several trips back and forth from the dealer to obtain documents, paperwork, and proof of payoff can create delays in the transferring of ownership which will delay your ability to take possession of your new car;
5. The dealership sometimes requires that you pay additional fees in order to obtain a payoff letter from their lender. Make sure you verify what these charges may be with the dealership before you leave;
6. You may also need to change your insurance to match the new coverage you will be required to have by law. If this is not done, your new vehicle may not be covered when it is returned to them. If possible, make sure they cover all the paperwork and provide proof of your new insurance beforehand;
7. Some dealerships do not allow jump sales even after they accept the card as payment for your new purchase because they require time to verify ownership records and other paperwork before selling or trading in your vehicle;