We are a small and new Auto Loan Lender and a few months ago bought a loan. We are the only lienholder on the car title, but not on the insurance policy, because the buyer forgot to add our name on his insurance policy as a loss payee or as a lienholder.
After an accident, the car was totaled, but the buyer can not be found – neither the insurance company nor we can’t find him. He is an illegal immigrant and may not even be in the US.
The insurance company refuses to pay us – the lender – even though we are the lienholder at DMV records and in sales contracts.
What can and should we do to get paid by the insurance company as the lienholder on the car?
Please advise.
Thanks.
Leo at Garman Financial
I think Frank really nailed it when he said transparency is the cure for perception. When there are things like hidden “discount fees” – I would not call that transparent. The more transparency, the more a consumer can make tier own decisions – all the education available online today would not help a customer relative to understanding if there is a discount fee that the dealer is paying the bank. To me in the perfect world, the discount fees would be disclosed in some manner so that the consumer can better understand the deal that the dealer has proposed to them. Including them in the TIL box, would result in the APR exceeding usury limits in many states resulting in people with bad credit who need transportation to get to work to not be able to get credit. Car loans are NOT like mortgages where if you have bad credit and cannot buy a home, you can economically rent a house/apartment. Renting a car is more expensive than buying a car.
I would also agree that most all dealers operate above board, unfortunately though the small percentage of bad dealers results in a black eye for the entire market.