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Together the consumer protection firms of Green & Noblin, and the Law Office of A.L. Hinton are investigating claims by California consumers against lender American First Finance, Inc. for charging triple-digit interest rates and failing to disclose lending terms at the time of sale. American First Finance provides retail merchants with a financing option for customers who typically have low credit scores or poor credit history. American First Finance has advertised early payoff incentives, such as “90 Days Same As Cash” or “Early Payoff Discount.” American First Finance offers financing services for many types of retail goods, including furniture, jewelry, appliances, tires, etc., and retail services, including auto repair, veterinary services, dental and vision care, etc. CLASS ACTION ALLEGATIONS We are investigating reports that American First Finance may be wrongfully providing loans to California consumers or wrongfully imposing high interest rates. If your consumer purchase was financed by American First Finance, you may be entitled to relief. Protect your rights by speaking with a consumer attorney. Call us toll free at 844-414-1822. Or go to www.alhintonlaw.com to submit your information. Call toll free at 844-414-1822.There is a big difference between who you pay the down payment to and who you make car loan payments to. Your down payment is paid to the DEALER. Your car payments are paid to the LENDER. Your obligation to both is wholly separate.
 For example, let's say you agreed to pay a $3,000 down payment but only had $2,000 at the time of sale and agreed to pay the balance of $1,000 in $200 payments for five months. This is your agreement with the DEALER and the dealer has the right to get paid - on time. At the same time that you are making payments to the dealer, you need to make your car payments to the LENDER. If your car payments are $300 per month, then for the first five months of car ownership you will be paying a total of $500 per month for the car - $200 to the dealer and $300 to the lender. What happens if you miss a payment?Once the car loan is in place, the LENDER has a secured interest in your vehicle. You will be listed on your DMV registration card as the Registered owner and your lender will be listed as the legal owner or lienholder. What this means is that only the lender has the legal right to repossess your car for failure to pay your car payments and sue you for the balance on the loan. Once the lender is listed with the DMV as the legal owner, the dealer no longer has any secured interest in the vehicle and therefore has no legal right to repossess it if you fail to pay the dealer for the balance of the down payment. However, the dealer does have the legal right to sue you for the money you owe. This doesn't mean that the dealer won't try to repossess your car illegally, which puts you in a terrible position with the lender because you are still obligated under the loan agreement to make your car payments on the loan for a car you no longer have possession of. Seriously consider if you are financially able to make two payments at the same time. Lenders decide whether or not to finance a vehicle loan based on what is written on the sales contract. If the sales contract shows that you have made a $3,000 down payment, but you actually only paid $2,000 and are going to make five more payments of $200 each to pay the dealer, the dealer is misrepresenting to the lender what the actual terms of sale are. If the lender knew that you were obligated to pay $200 per month to the dealer at the same time that you are making a $300 per month car payment to the lender, the lender may have refused to fund your car loan. If your income shows that you can easily make a $300 per month car payment, but not a $500 per month car payment, the lender would be taking too great a risk that you will default on your car loan. Rightly so.  Your best choice is to buy a car with only the amount of down payment that you actually are able to pay in cash at the time of sale - no deferred down payments.
This is the worst, absolutely THE worst advice I could give you. You hear this all the time, and it seems like GOOD advice. So, why do I say it is the WORST advice? Because it pains me to look into my crystal ball and know that you will NOT take it. It’s also the worst advice because if I give you this advice after you buy a piece of junk, then I sound like an “I told you so” nag. Of course, I'm going to give it to you anyway, but you're putting me in a real bind by not taking it. How do I know you won't take my (and every other lemon law attorney's) advice? Because you’ll be in my office (or theirs) asking for help to get you out of the sale. Maybe we can help, and maybe we can’t. Here goes...
That's it - that's my very best and worst advice. It bears repeating: Get your used car inspected before you buy it! Now, rather than leaving my blog on such a negative Nelly note, I thought it might be helpful to talk about the psychology of why people feel so uncomfortable asking the seller if they can take the car to their own mechanic for inspection. (This is arm-chair psychology since I’m not an actual psychologist but attorney's are also known as “counselor” so I'll take my leave.)  First, people do not like conflict and setting a boundary with the seller is uncomfortable. You’ll likely get a lot of push back: “I already inspected the car and it runs fine.” “Don’t you trust me?” “Just sign the papers first and you can take it to a mechanic. If there is a problem, I’ll take it back.” “You can’t take the car because it isn’t insured.” “I’ve shown you the Carfax already and it says there aren’t any problems.” And on and on. What a normal car buyer might think is, “Lordy, just get me out of here.” “I’ll just sign so he shuts up.” “Well, he sounds honest.” “He said he would take it back.” “I’ve already taken his time, so I have to buy it now.” All of this push-back is really just to bully you, distract you, and make you uncomfortable. Sellers WANT you uncomfortable.
There is one ADULT requirement that you should know about. If you buy from a private seller, YOU are required to report the sale to DMV within 10 days of the purchase date. The seller signs over the title (pink slip) to you and you notify DMV of the sale. If you buy from a used car dealer, the dealer is supposed to report the sale to the DMV. Being better informed, empowered, and a bit more self-reflective, we can close this counseling session and I will hang up my psychologists hat ...  |
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Alicia L. Hinton, Esq.
Fighting for your rights, the right way.
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