WINSTON-SALEM, N.C. — Linwood Austin was in the market for a new car back in 2016. He looked around and decided on a Toyota Corolla.
“Nice car, had everything I needed,” said Austin.
Instead of buying, he chose to lease the car for 36 months and have the option to buy or trade it in for a newer car after the lease was up. At about 32 months, Austin started to discuss his options with the dealership. The salesperson told him to give it a month and think about what he wanted to do.
About a month later, Austin realized he needed to act now.
“I see the mileage creeping up so it was time to turn it in,” said Austin. He talked with the salesperson about his options and then settled on leasing a 2019 Toyota Corolla.
“Looked at it, drove it, liked it,” said Austin.
His payments went up a bit, but it had some extra bells and whistles that the 2016 didn’t have. Austin signed the paperwork, left the keys and the old car with the dealership, and drove off in his new car. It seemed like the perfect arrangement, but a few things got mixed up and it would lead to a major problem down the road.
A few weeks later, Austin received a check from the dealership. He assumed it was rebate money and deposited it without thinking that much about it. Turns out, it was money to pay off the last three months of his loan on the first car. Austin thought the dealership was doing that directly, and didn’t know that’s what the check was for.
During the next three months, Austin made the payments on his new lease and was confused by letters he was getting from the bank about “non-payment." What he didn’t realize is the bank was referring to the old lease.
“I thought the dealership paid that off,” said Austin.
Eventually, the bank considered the lease to be in default and reposed the car from the dealership. The bank proceeded to sell the vehicle and then charge Austin for the amount he owed, late fees and the appraised value less what the car sold for. The bottom line - the bank was looking to collect more than $7,000 from Austin.
“I got it (charge) and I was like wow, what happened?” said Austin.
He called the bank but was told there was nothing it would do, and he was responsible for the $7,000 he owed. A big chunk, considering the final three payments were less than $1,000.
Austin reached out to Legal Aid of North Carolina for help. The organization sent a letter to the loan company explaining the situation and noting it considered the amount owed to be “excessive” and that a mistake must have occurred.
The letter didn’t seem to help much as the bank was still trying to collect on the amount owed, claiming it was Austin who terminated the lease early by not paying the final three payments.
“They (the bank) was holding me hostage for $7,000,” said Austin.
Figuring he had nothing to lose, Austin reached out to News 2 and our Call for Action volunteers. Our team and I reached out to the dealership and the bank to figure out exactly what took place. We talked with several managers and supervisors and explained how this happened. It appeared to be a miscommunication between the salesperson at the dealership and Austin.
“I contacted the salesperson and he said he had never heard of this before,” said Austin.
After a couple weeks of calls and conversations, the leasing company agreed to only charge Austin for the three months left on the lease and some later charges.
“I feel at peace now,” said Austin.
Our volunteers saved Austin about $6,000 and helped him to understand what he needs to do next time his lease runs out. The person leasing the car is responsible for the months left on the lease if the car is turned in or traded. In some cases, the dealership will pay for those charges, but you need to ask - don’t assume it will.
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