I Traded My Vehicle in For a New One but the Dealer Didn’t Pay Off My Other Loan and it Defaulted.

Note: The DearEsq free 'ask a lawyer' site is offered as a free informational service to the public and is not intended as legal advice. Laws vary from state-to-state, and in addition every situation is unique, and relevant facts may not be known. The answer to the question posed below may not apply to in your state or to your situation. For legal advice in your state and your situation you should consult with an attorney in your state who is familiar with the rules and laws in your state.

“I have purchased a vehicle thru a used car dealer while trading in a vehicle. Per contract I traded in $18,500.00 worth of vehicle. The dealer put 3k of the my $18,500.00 towards a new loan on my new used car vehicle purchase which leaves a balance of $15,500.00. The loan payoff on my trade in was $12,600.00. The dealer had not paid off my loan and it went default so with my previous loan agreement I defaulted and they settled the loan by deducting the payoff from my personnel banking account. So my question here is do I have grounds to sue the dealer for the $15,500.00 since I gave power of attorney on my trade-in, and the lien was lifted and I am assuming it’s their vehicle now? But by contract they never paid the whole $18,500.00 only $3,000.00 can I sue them for my $15,500.00?”

The answer most likely lies in the contract document you executed with the dealership. You should take this document and consult with an attorney in your area, as contract law can differ based on where you live. Also, if your contract does not address this situation, there may be some state or local law that determines the dealership’s liability and therefore your ability to sue; and an attorney familiar with contract or consumer protection laws in your State would be in the best position to advise you of your rights.