Consumer Affairs Panel Approves Assemblyman Moriarty’s Bill to Require Dealers to Pay Off Consumer Debt of Trade-in Cars
For many people, buying a new car also means trading in their old car that still has a lien on it. So dealers will agree to pay off the remainder of the loan, and the consumer can go home with their new car worry-free. Unfortunately, not every dealer follows through.
A recent ABC 7 report has detailed how dealerships in North Jersey closed abruptly and left several consumers with tens of thousands of dollars in debt after the dealers defaulted on their trade-in loans instead of making the payouts.
While there is no law to force dealerships to pay off the loans in a timely manner, at their January meeting, the Consumer Affairs committee unanimously approved Assemblyman Paul D. Moriarty’s bill, A-1483. The bill would require dealers to pay off a loan on a customer’s trade-in within 15 days of accepting the car or face fines.
“Consumers deserve the peace of mind that when they drive off the lot in their new car, the dealership is going to hold up their end of the bargain and pay off the loan on the trade-in,” Assemblyman Moriarty said. “They shouldn’t find out a few months later that they are on the hook for two car payments; it’s unfair, and it’s bad business.”
The bill, which has gained support from both dealerships and consumers, will also require the lien holders on the trade-ins to release the car title to the dealer within 15 days after receiving payment. “By speeding up the process for dealers to pay off trade-ins, consumers will know that their loan has been taken care of, and the dealer will be able to resell the car sooner. It’s a win-win.”
Now that the Consumer Affairs Committee has approved the bill, it will head to the Appropriations Committee for consideration. Assemblyman Moriarty believes that this bill should receive the full support of the Assembly, “It’s a no brainer when the industry and the consumers can agree there is a problem – the Legislature must act.”