Thats a quote I find myself using a lot in my line of work advising used car dealers. The reasons I say it range from the mundane to the shocking.
First, and foremost: I am NOT a Lawyer. I do not pretend to be one, and frankly, not sure I’d want to be one. (No offense, Counselor, but I’m just not the type.) I do read extensively and research a lot, which leads me to a lot of legal decisions. My telling you ar anyone else what I have read or what my experience is does NOT constitute “legal advice,” and I always make it a practice to remind listeners/readers of this. Don’t misinterpret anyone’s advice for qualified legal advice, if it refers to a situation that may involve a law or legal situation.
The latest opportunity for me to lay the “Talk to your Lawyer” on a dealer stemmed from a request to add a “binding agreement” that the customer signs that says that the customer agrees NOT to add the car loan to bankruptcy proceedings if they file. Bankruptcy rules do not permit such agreements, and in fact, the laws specifically say they are not permitted. In some situations, you can ask the consumer to reaffirm the debt or to waive discharge at the time of the bankruptcy proceedings.
I’ve had dealers call me and want to read me a summons or subpoena they have gotten, and they say, “Will you tell me what to do?” I say yes, gladly. Take your phone and find the number of your attorney, dial it, and ask them to meet with you. That’s my advice. I’ve gotten that call one day and the dealer was whispering. I asked him to speak up, he said he couldn’t, he was in the hallway outside the courtroom. He was literally about to walk into a courtroom to answer this subpoena, and wanted advice on handling it and what to say. I stopped him before he could read me the details of the case. I asked him to find any attorney walking that hall and offer them a fee to just go in there and ask for a continuance. He gets mad at me, and asks why won’t I help him.
Another instance I get a lot is a request to have an “agreement” signed saying the customer cannot take the BHPH car out of the state (or county!) at any time for any reason. I read some years ago a scathing decision by a judge excoriating a dealer who had such an agreement, and when the customer went over the state line to visit relatives, the dealer repossessed the car the moment the customer returned home even though the customer was paid ahead. A short version of the judge’s commentary was basically that the dealer, as a lien holder, could NOT control the movements of his customers. Adding to the judge’s ire was that he discovered that the dealer had been using a GPS device to track his customers, and had put in a “geo-fence” notification to alert them when the customer crossed a state line. Also, the dealer charged the customer an EIGHT HUNDRED DOLLAR “repo fee” even though all he did was send a guy over to the person’s house with a spare set of keys to drive it back.
Side Note: If you are using GPS devices like that guy to track the movement of customers who are not in arrears, please stop. It’s called Stalking.
In a similar vein, I get asked periodically to add a clause to the finance contract that moving out of state is grounds for repossession. Again, judges have said that you cannot control where your customer lives, and you cannot even require them to get “prior approval.”
Also on the “Ask Your Attorney” list is the “How much can I charge as a Repo Fee, and under what circumstances can I repossess the car? ” Short version from me is that the contract allows repossession if the consumer breaks the contract. That may mean being late on a payment, failing to have insurance, or other clauses. How late is late? Good question! Please comment on this post if you can find someone to officially put that value in writing. In my nearly 30 years in and around this industry, I have never seen that defined. How much repo fee? I have heard a judge say that the dealer can “recover expenses related to the repossession.” So, your flat $500 fee won’t hold up, especially if you can’t demonstrate but around $75-$100 of it.
One of the most frustrating is when I advise someone that in my experience, this thing is not allowed, but, again, ASK YOUR ATTORNEY, and the caller will say: “But Fred down the street has been doing this for 20 years, and he’s never been sued or fined over it.” My clarification: 1. Fred has never been caught at it. and therefore, 2. Getting away with something doesn’t make it legal.
“But that’s an outrageous law!” — OK. And sometimes, I agree. But I can’t give you permission to break it, nor, for that matter, can your attorney. But the attorney can at least agree to represent you for breaking it. No, I can’t give you a “workaround” for it, because you could still be found to have violated the law, and now, I’m an accessory to the act.
You want to argue about a law, fine. Some days, I even have time to listen and commiserate with you. But be sure to get your legislator on 3-way for the call, too, because that is where your complaint needs to start.
Ask your attorney, because Fred and I can’t give you legal advice. Fred’s actions and his dumb luck aren’t legal advice.
Talk to your lawyer. That’s why you pay them, that is what they train for, and mostly, because when it goes wrong, they are the ones have to help you clean up the mess.
Thanks for the visit, tune in next time, when, hopefully, by then I will have a new topic to discuss.