QUESTION
My daughter bought a car, and the dealership failed cash her loan check prior to it voiding. Is she responsible to get a new loan or not?
Asked on Dec 01st, 2011 on Business Law - Colorado
More details to this question:
My daughter bought and paid for the car in Colorado with a down payment, and a loan check for the balance from her credit union in mid-September of this year. The check clearly stated it must be deposited by October 31 or it would void. The dealership apparently misplaced and forgot about the check until the last week of November. The credit union refused payment as the load had expired. My daughter''s financial situation has changed in the past two months, and she is now unable to qualify for another loan. However, we are wondering if she even has to. The dealership sent the completed title with my daughter listed as the registered owner to her credit union as the lien holder. But now there is no lien, through no fault of her own. So, should the credit union send her the title, free and clear, and the care dealership is simply out of luck do to their own failure to complete the transaction in a timely manner.
1 ANSWER
Michael Katz
Dear Sir or Madam
In the most simple terms, one cannot keep something for which she has not paid. Having said that, if your daughter was given the loan in the first place, and the check was issued, I'm not sure why the loan was "canceled" merely because the check did not cash. It should be treated as a lost instrument for which you can get a new check (for which fees may be charged).
It sounds however like your daughter cannot now afford the car. If that is the case, then she should contact the seller and discuss returning it to them. Since it was their failure to properly process the documents, I would negotiate giving back the car without having to pay anything for depreciation or use. But for the car dealer's negligence, there would have been loan in place.
Sincerely,
Michael J. Katz
303-790-4103
Attorney at Law
Answered on Dec 02nd, 2011 at 12:56 PM