Car Dealers Don't Tell

The most common problem that gets car dealers in trouble is not telling consumers about rolled-over loans on trade-in vehicles.

Car dealers frequently advertise, "We'll pay off your old car loan, no matter what you owe, and get you into a new car." Many car buyers don't understand the full implications of that statement, and dealers don't go out of their way to explain it.

New car buyers are often "upside down" on their car loans, meaning they owe more than the car is worth. If they trade the old car and get a new loan for a new car, the "negative equity" from the old loan is added ("rolled over") to the new loan. This is a fundamental concept but many consumers don't understand it.

Dealers are obligated to tell buyers when this occurs. Many don't. It has become the single largest reason for law suits against car dealers.