Can finance companies work deal settlements on vehicle loans if there is a problem with the vehicle?

UPDATED: Sep 1, 2011

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Can finance companies work deal settlements on vehicle loans if there is a problem with the vehicle?

We purchased a $30k vehicle and the motor blew up with only 68k miles. The original warranty had expired 3 month prior. Is there anything I can do to work a payoff settlement with the financial company since the manufacturer will not do anything.

Asked on September 1, 2011 Kansas


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

You can try to work it out with the finance company, but it's highly unlikely you will be able to. The issue is, the finance company has NO involvement in or responsibility for the condition of the car, whether it is usable, whether it runs, if it doesn't run, why that is the case, etc. They are only concerned about the loan. You borrowed money by agreeing to repay it; unless that loan agreement specifically says that repayment is conditioned or depend on the car being usable, then the fact that the engine blew up doesn't alter your responsibility to pay, any more than you'd be able to get out of the loan if the car were stolen or totaled. Your best recourse, if no one is responsible for the loss whom you can sue (e.g. a mechanic who made a faulty repair) may be to pay  out of pocket for a new engine--at least then, you'll still have a  working car. If you stop paying on the loan, on the other hand, you can be sued for the full amount and the lender can repossess the car, which--even without an engine--has some value.

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