If I purchased a car from a dealership, can my auto loan be sold to another company without my permission?

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If I purchased a car from a dealership, can my auto loan be sold to another company without my permission?

I signed a contract stating X Bank as the lienholder. My payment is due in 21 days but the bank sold my loan to Y Finance without my permission. I never agreed to this and I’m not happy because the finance company has a bad reputation and I do not want to do business with them. Do I have any rights as a consumer? If I don’t pay the finance company can it repossess my car even though I didn’t sign a contract with it?

Asked on January 1, 2013 under Bankruptcy Law, Georgia

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

Any loan may be sold (or "assigned") to any person, entity, or institution (e.g. to any other lender or bank) at any time, unless the loan agreement specifically says that it cannot be assigned. However, while you can and should check your loan agreement, it is almost certain that there is nothing in it forbidding sale or assignment--this type of loan is regularly sold or assigned. The company buying the loan is subject to the same terms as the original lender; it's as if you signed the loan agreement with them in the first place. They have to honor the terms of the loan you took out--and so do you: if you fail to pay them, you will be in default, and they could repossess your car, sue you for the money you owe them (if you owe them more than the car is then worth), and damage your credit.

 


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