When you trade in a vehicle with an outstanding loan, the dealer agrees to pay off the remaining balance as part of the transaction. This payoff amount is typically listed on the buyer's order and incorporated into the deal. If the dealer fails to make the payoff — or delays it — you continue to accrue interest on the old loan, your credit may be damaged by late payments, and you may ultimately be held responsible for a debt on a vehicle you no longer own.

Dealers sometimes fail to make trade-in payoffs promptly because they are using the trade-in proceeds for other purposes, because they are experiencing financial difficulties, or because the deal was structured in a way that made the payoff contingent on events that did not occur. Whatever the reason, the failure to pay off the trade-in is a breach of the dealer's contractual obligation.

Under FDUTPA, a dealer who represents that it will pay off your trade-in and then fails to do so has made a deceptive representation. The misrepresentation is the promise to pay, and the harm is the continued liability on the old loan. Courts have found FDUTPA violations in these circumstances, which means attorney's fees may be recoverable.

Your damages in a trade-in payoff case can include: the interest that accrued on the old loan after the dealer should have paid it off; any late fees or penalties you incurred; damage to your credit score; and in some cases, the full amount of the old loan if the dealer never pays it. You may also be entitled to attorney's fees under FDUTPA.

If your dealer has not paid off your trade-in, act quickly. Contact the lender on the old loan to find out the current payoff amount and whether any payments are past due. Send a written demand to the dealer documenting the obligation and requesting immediate payoff. Keep records of all communications. If the dealer does not respond promptly, consult an attorney.