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Trade-In Payoff Form “We prove what we want to prove. The real difficulty lies in knowing what we want to prove.”
The trade-in payoff form is written verification of the dollar amount owed to pay off the loan on your trade-in. For your protection, insist that the trade-in payoff form is filled out completely, every single line, no exceptions.
If you borrow money to buy a car, the bank holds the title. The bank will not release the title until the entire balance of the loan has been paid off. When you trade a car in, the loan must be paid off before the title can be released to the new owner. This is true whether you trade in your car at a dealership or sell it on your own.
Here’s your payoff protection plan:
- PAY THE EXACT DOLLAR AMOUNT OWED
Very often a dealer’s too-casual approach results in an inexact payoff amount. The effort and discipline required to get an exact payoff amount often seems to get in the dealer’s way. A high payoff results in extra money that can be absorbed by the dealer as profit. A low payoff results in your owing more money. If the bank receives a low payoff, you’re the one responsible for the difference. Even though all the paperwork has been signed and you’ve been driving the car, the deal is not complete until the payoff on the loan for the trade is complete.
- PAYOFF VERIFICATION FORMA payoff verification form is your proof of who, what, when, where, why, and how. The form should list who you owe the money to, the amount owed, the person quoting the dollar amount, where to send the money, and the due date. The verification form can only be enforced if it is signed and dated by the customer and the dealer. It is one of the most important documents to get and keep a copy of.
- COMPARE CONTRACT AND PAYOFF FORM
Make sure the amount on the payoff form matches the amount on the contract you’re signing.
Before you trade in your car, read...
Kick the Dealer...Not the Tires!
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