Q: Can a used car dealer state to the lender that a 2004 Dodge Ram 1500 is a Ram 1500 SLT with Laramie package to obtain financing when in fact this is untrue?
Charles S. – Hogansville, Ga.
A: The dealer’s information to the lender should be as accurate as possible. In circumstances where the dealer overstates the equipment of the vehicle, this means that the lender could have financed more than the vehicle’s acceptable value.
If and when the vehicle loan defaults and the lender picks up their collateral, they could notice that the equipment was overstated at the origin of the loan and ask the dealer to pay back the monetary over advance of the loan because of the overstated equipment. This may not apply when the amount financed is far below the vehicle’s value. Overstating equipment on the vehicle would not have made a difference in determining loan amount approval.
Nowadays, many lenders call and interview the buyer to confirm information, including vehicle equipment. When it is determined that the dealer overstated the equipment of the vehicle, they go back to the dealer and collect the amount of the loan that the equipment increased the loan amount. Typically, this scenario may not affect the customer.
Agustin Vasquez, Jr. – General Manager, Mack Massey Chrysler Jeep Dodge, El Paso, Texas