The Expert Podcast

If you have a negative equity vehicle where you're trying to get out of the car loan, as we've talked about many times on this channel, one of the methods to get your negative equity or upside down or underwater to be a lower number is to reduce the loan principal amount by getting rid of junk fees, getting rid of dealer add-ons. Well, in the past, there was a lot of support that you had for doing this from government agencies. Well, in the wake of recent federal government budget cuts, some of the federal government agencies that would assist with this no longer have the personnel.

However, much of this is being taken up at the state level. This is a news article in a publication called Auto Finance News. It is a trade journal for car loan financial institutions and what they're saying is compliance challenges mount. What does that mean? That lenders are being challenged by government agencies not at the federal level but at the state level. The CFPB is the federal level and that's where there were some budget cuts. But now state regulators are filling that gap. They're targeting junk fees according to this article. Targeting junk fees.

What that means is when you buy a vehicle, you go into a dealership, you agree to pay, let's say, $35,000 for a car and you sign the paperwork, but unbeknownst to you on your car loan, they have added four, five, or $6,000 worth of extra fees. The car price didn't change. The car price says 35,000. So you can look at your contract. It'll say 35,000 but hidden in all of the other numbers and all the other paperwork are these extra add-on fees for programs like gap insurance, protection plans, service contracts, you know, prepaid maintenance, all these extra things that they add on. And they just tell you, "Oh, it's only going to cost you $10, $15, $20 more a month to protect your vehicle." Well, that could be thousands of dollars by the time you're done.

One of the things that you want to do is to get those things cancelled. You want to get them removed. Some of them were not even legal to put on the loan in the first place so it can be totally removed. Some of them, if you signed for it, might be on there, but you can still cancel it. Almost everything that goes on an add-on for a car loan, you have the right as a consumer to cancel it.

Now, the dealer who made profit on it and the lender who's getting interest on it may not make it easy to cancel. That's why you have to know how to navigate that cancellation process. You can't just call them up and say, "I want to take it off." They're going to make you sign forms. They'll maybe never send you the forms, tell you you have to find the forms. They're going to make it difficult because if you cancel that $5 or $6,000, everybody loses. The dealer's going to lose several thousand, the lender will lose thousands of dollars. The service contract provider will lose thousands of dollars. So, all three of those companies are going to work very hard to try to keep you from cancelling it. They're going to kind of keep passing the buck of who's responsible.

It's why it's important to do this paperwork properly. Don't take no for an answer. Don't let them give you the runaround and have these fees reduced because if your negative equity is $10,000 and you can get three or $4,000 removed, you're almost halfway there to getting to an even equity position so you can sell and get out of your car.

Thank you for watching another video at actualhum.com and describe.tv. Remember, if you have questions or comments about our videos, put them in the link below. Also remember that you have availability and access to live one-on-one question and answer consultation with a licensed expert in a number of fields, investigations, insurance, surety bonds, civil court mediation, even things like real estate records research, real estate brokers, real estate mortgage lenders. In addition, you're going to find that experts are available in business segments, business development, marketing, advertising, certified licensed expert. So, if you do find this content valuable and you want to delve more deeply into a subject, you can't ask YouTube a question, right? But if you want to talk to somebody live, an actual human, use the link below. Thanks for watching.