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What you ‘auto’ know about car financing before buying a new or used vehicle

Houston – All this week, we are filling you in on what you “auto” know about buying a new or used car. In this segment, we’re talking about financing and a Houston woman who claims one dealership switched her lender without her knowledge.

Taken for a ride

When Jeni Williams decided to buy a new 2019 Toyota 4Runner, she found out how much money she would need for the vehicle and she went to her credit union to get preapproved for a loan. She then took the preapproval letter to Joe Myers Toyota.

“The approval letter shows what your interest rates rate is going to be(and) what your payments will be,” said Williams. “Literally everything is lined out for you, so the dealer can match those numbers on the paperwork you sign.”

When Williams left the dealership with her 4Runner, she thought her monthly payments would be auto-drafted from her checking account as she had discussed with a credit union representative.

Less than a month later, she was rear-ended on the Beltway. While sorting out the mess with the insurance and repair shop, she got a call from Capital One letting her know that her first loan payment was late.

“I was like, ‘No, that couldn’t be possible,’” Williams recalled. “I didn’t sign any paperwork that had Capital One on it.'”

How it Happened

When Williams checked the only contract she said Joe Myers gave her the day she purchased the SUV, a purchase agreement, she discovered the lien holder portion was blank. She remembered that the salesman she was working with at the dealership also told her that in order to process her loan paperwork with her credit union, she had to fill out a credit application. Looking back, she said the dealership could not have shopped her loan with any other lenders without the information she put on the application.

Williams believes Joe Myers gave her loan to Capital One instead of her credit union because the dealership received more money from Capital One in incentives. No one at the dealership would talk with KPRC 2 except to say they made an offer to resolve the issue with Williams, who said the deal would have Joe Myers take back the 4Runner once repaired and pay off her loan if she agrees to buy and finance a more expensive 2020 4Runner with them.

When we contacted Capital One, a representative sent this statement:

"The process of purchasing and financing a new car can be exciting and, at times, overwhelming. That’s why we always encourage consumers to ask their dealer questions along the way, to carefully review any financial materials before leaving the dealership and to keep an eye out for onboarding communications that may include important information about their loan.”

How to make sure it doesn’t happen to you

- Don’t ever sign a document that has blanks in it. Those blanks could be filled in later without your knowledge.

- If you secure financing or plan to use a bank or credit union to finance a vehicle, do all of the paperwork with that lender. You would then take the check or cash to the dealership to purchase the vehicle. In this scenario, there is no question who your lender will be.

- If you do suspect a dealer didn’t disclose important information, if they changed numbers on your financing deal after you signed the retail installment contract, call the Texas Office of the Consumer Credit Commissioner to file a complaint. The agency’s number is (800) 538-1579.

The OCCC is investigating William’s case.