My Car Price Increased after Credit Acceptance Financing
If you were told by a dealership or finance manager that the price of your car increased because of bank fees or finance charges after you financed with Credit Acceptance Corp. (CAC), you are not alone. Whitney, LLP has represented multiple clients who bought a car and were then told by the dealership that because Credit Acceptance charges the dealership a large bank fee, the dealer was passing the bank fee or finance charge onto the buyer.
Credit Acceptance is under investigation by numerous states, including Maryland, for its business practices. They have been sued many times and are often described as a predatory lending company. Read about a recent lawsuit by the State of Massachusetts, and other investigations, here.
The auto fraud lawyers at Whitney, LLP represent buyers and sue car dealerships for a variety of schemes. Our attorneys can often unwind bad deals and recover compensation for unfair practices, including false advertising, illegal price increase, and charging unlawful bank fees and finance charges.
Here is a recent blog post on the Top 10 Most Common Maryland Car Dealer Frauds we help our clients fight back against, and here are some of our past settlements in car fraud cases.
We offer Legal Consultations. Call us at 410 583 8000 with questions about your car deal, or to discuss a potential case.
The Dealer Increased My Car Price from Credit Acceptance Financing
Credit Acceptance makes money by charging dealers large fees for providing financing for cars. The problem is, these dealers would have to advertise the price of the car at much higher prices than their competitors are doing online, so they do not advertise the price that they would actually charge. Instead, what usually happens is that a buyers finds a car they like online, with a good price, and the arrive at the dealership. After their credit run, the finance manager usually either (1) explains that due to financing through Credit Acceptance, there are large bank fees that have to be passed on to the customer, and that will cause the price to increase; or (2) the finance manager does not tell the buyer of the price increases, and just puts the increased price on the sales and finance paperwork without telling the buyer.
Many buyers trust that the friendly finance manager will be honest and put down the price that was advertised or that was already discussed. However, that is rarely the case. We have represented dozens of car buyers who review their contract after leaving the dealership and discover that the numbers are different and their monthly payment, interest rate or loan amount are different than what was expected.
Low Credit Score or Second Chance Credit and Credit Acceptance
Most car buyers who finance their used car with CAC have a low credit score and a lower income. Because of this, dealerships, salesmen and finance managers often prey on these buyers. These buyers are often taken advantage of by being told what car they can purchase, what price they must pay, the interest rate they must pay, and are often forced to purchase a warranty. Because these buyers have fewer options of where and what to buy, they are victimized by predatory dealers who know how to take advantage.
We have represented multiple clients who found a vehicle they wanted and had seen the price advertised online, and then, when the dealer decided to finance them through Credit Acceptance, increased the price by thousands due to “bank fees” or “finance charges.”
If this happened to you, Whitney, LLP may be able to help you unwind the deal or recover money for illegal finance and interest charges. If you have the online price advertisement, make sure to print or screenshot it, and call us at 410 583 8000.
Maryland Law Limits Finance Charges Passed On To Buyers
In Maryland, dealers CANNOT increase an advertised price to pass along Credit Acceptance bank fees or finance charges that are often thousands of dollars to customers, which cause the price and financing costs to increase significantly, sometimes by over $100/month. There is a Maryland law called the Maryland Credit Grantor Closed End Credit Provisions (“CLEC”) that limits the maximum allowable interest rate to 24%, and also limits the fees that may be charged to:
(d) Loans to consumer borrowers.-
(1) In the case of a loan to a consumer borrower, a fee permitted under subsection (b) of this section may not be charged and collected unless:
(i) The agreement, note, or other evidence of the loan permits;
(ii) The fee is an actual and verifiable expense of the credit grantor not retained by him; and
(iii) Limited to charges for:
1. Attorney’s fees for services rendered in connection with the preparation, closing, or disbursement of the loan;
2. Any expense, tax, or charge paid to a governmental agency;
3. Examination of title, appraisal, or other costs necessary or appropriate to the security of the loan; and
4. Premiums for any insurance coverage permitted under this subtitle.
CLEC, Section 12-1005(d) “Additional fees and charges.”
What this law means is that the dealership is not allowed to pass onto car buyers and increase the price of their car due to any bank fees or finance charges that Credit Acceptance charges the dealership. The dealer must pay those fees itself, and cannot force the customer to pay instead.
Lawyer for Help With Credit Acceptance Pricing and Financing
If you need help after being sold a car that was financed with Credit Acceptance, the consumer auto fraud attorneys at Whitney, LLP offer Legal Consultations. We are familiar with dealerships and finance companies that increase prices and take advantage of car buyers, and know how to help car buyers fight back against unfair practices.
Call us at 410 583 8000 or use our Online Contact Form to start your Legal Consultation.