“I just wanted to scream:” Car owners cope with trade-in troubles after dealer makes late payments

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RACINE — Several car owners traded in their vehicles at a dealership and thought that was the end of it. Weeks later, they got an unpleasant surprise. Some of them had to pay for cars they no longer owned.

Willona McBride says her credit score recently dropped 40 points.

"It's like I'm hitting a brick wall," explained McBride. "I just wanted to scream."

Willona McBride explains here trade-in troubles with Racine Automotive Group with Contact 6's Jenna Sachs.

The drop in her credit score was happening even though McBride says she's been paying her bills on time.

"I've been working on my credit. I was finally able to get a vehicle on my own, and not have a co-signer," McBride said.

It was the purchase of a new car that started McBride's problem.

Willona McBride's Dodge Nitro was listed on Racine Automotive Group's website even though it had not been paid off.

In May, she says she visited Racine Automotive Group to trade in her Dodge Nitro for a new car. McBride was told the dealer would pay off the remaining balance she owned within ten days.

"It's been two months now," McBride told FOX6's Contact 6 in July.

Racine Automotive Group had not paid off the vehicle. It meant McBride was being held responsible for the dealership's late payment even while her vehicle was listed for sale on their website.

McBride says she felt stuck and reached out to Contact 6.

"I needed help and I don't want this to happen to anybody else," McBride said.

Contact 6's Jenna Sachs visited the dealership in August. One day later, McBride got a call. Racine Automotive had finally paid off her car.

According to the state, when a dealer accepts a vehicle trade-in, it has 14 day to pay off the balance for the outstanding lien. If it does not, the dealer is responsible for any interest, penalties, late fees or other charges made on the debt.

According to Wisconsin Administrative Code:

When a dealer accepts a vehicle in trade that is subject to an outstanding lien and agrees in the purchase contract to pay off the balance due the lien holder, the dealer shall pay the amount stated in the purchase contract due the lien holder, after any adjustments for any estimated trade-in lien payoff amounts pursuant to s. Trans 139.05 (8g) within 14 days of taking delivery of the trade-in vehicle. The dealer shall be responsible for any interest that accrues, penalties assessed, late fees, or other charges made on the debt secured by the lien to the extent those penalties, fees or other charges result from the dealer delaying payment of the amount stated in the purchase contract to be due the lien holder beyond 14 days of taking delivery of the trade-in vehicle.

It turns out, McBride was not alone. Contact 6 discovered two more women having the same problem.

Ann Krahn and her husband say they had to make two payments on a car they already traded in at Racine Automotive.

Ann Krahn says she started to get letters in the mail that her traded in Jeep had not been paid off by Racine Automotive Group.

"We started getting little nasty grams in the mail from our lien holder for the Jeep saying, 'You guys gonna pay this or no?'" Krahn said.

Contact 6 reached out to Racine Automotive for Krahn. Three months after Krahn traded in her vehicle, the dealership paid it off and sent the Krahns a check for the couple's additional payments.

Lyndsay Foley traded in a car in September to get a bigger one for her growing family.

"Every time we called nobody had answers, nobody could tell us anything,"

Lyndsay Foley traded in her car to Racine Automotive Group for larger one to accomodate her growing family.

Foley said. "Time just kept ticking and ticking and ticking."

It took Racine Automotive more than a month to pay off the remaining balance on Foley's car.

"We made a payment in October, even though the vehicle wasn't in our possession anymore," Foley said.

Racine Automotive refunded Foley the October payment.

Contact 6 visited Racine Automotive a second time to try and find out what was going on. It closed its front doors and lowered the garage door. Contact 6 spotted moving trucks outside.

Contact 6 visited the dealership one more time to find the doors locked and the building dark. It appeared Racine Automotive had shut down operations.

Contact 6's Jenna Sachs visits Racine Automotive Group to get answers.

Contact 6 reached out to the owner of Racine Automotive, Chuck Harvey, several times to get a statement, but never heard back. Racine Automotive has not told Contact 6 what happened, but the state says the dealership had issues with its lease and closed as result.

A moving truck outside Racine Automotive Group

Wisconsin state officials say there have been complaints against Racine Automotive. The state did an audit in August and discovered two liens from 2017 that were not paid off. Those have since been paid off and the state says the company has no outstanding debts related to vehicle sales.

Contact 6 has been told that the dealer has found a new location in Waukesha and plans to relocate. The state will decide if disciplinary action should be taken after the relocation application is completed.