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  • Report: #999974

Complaint Review: Kids Auto

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  • Submitted: Sat, January 19, 2013
  • Updated: Sun, January 20, 2013

  • Reported By: dani — greeley Colorado United States of America
Kids Auto
1300 W Alameda Ave. Denver, Colorado United States of America

Kids Auto Moreland, Kids' Financial, Inc. doing business as C.A.R. Finance, Kids' Automotive Inc., and Brandon Financial Inc. Deceptive and Unethical Practices from Dealin Doug's Loan Underwriter-CAR FINANCE Denver, Colorado

*Consumer Comment: A little more education

*Author of original report: HERE'S A LITTLE EDUCATION.......

*Consumer Comment: as usual

*Consumer Comment: Another case of...

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On 12/11/12 I filed the following report with the Better Business Bureau. The company has not responded to the complaint at this time and was recently send a 2nd notice from the BBB. 

In 2009 I purchased a 1999 chevy cavalier car from Kids Auto on a 42 month loan at 339.00 per month. To date, I have continued to make monthly payments. Kids Auto has in house financing under the name CAR Finance in the same building. They also work closely with Dealin Doug Auto as CAR Finance does all of the Dealin Doug loans. Additionally, Kids Auto clients are referred to the Dealin Doug lots to trade in the car purchased by Kids Auto once the original loan is paid off or close to pay off to "get a better deal on a car and better financing rate". (as if they are doing you a favor).

I have remained current on my account monthly with the exception of a couple deferred payments in Sept. 2012 and October, 2012. I currently owe approx $6,000 on a 13 year old car currently worth $500.00.

In August 2012 my credit score had improved so I decided to try to get rid of the car and use my car payment as a down payment. Car Finance told me I could go to a Moreland, Dealin Doug Car lot and they would subtract $2500.00 from the payoff. The catch was the discounted payoff would only apply to a car bought at one of the Dealin Doug's car lot's only, and not any other dealership. They said that if I went to another dealership they would not reduce the pay-off amount. I told them i did not want to continue a business relationship with them and would go to the dealership of my choice. 

Ultimately, I was unable to finance a newer car with any dealerships due to my credit which I believed had improved. I decided to look at my credit report on December 5, 2012 and noticed that in Sept 2012 CAR Finance falsely reported my account as a "Charge off" for the remaining balance. 

I disputed this with the 3 credit bureaus and called CAR Finance ask them about this report to the bureaus. I was told to call back the next day and  I followed up on (12/11/12) and spoke to another employee who stated that they would not address this issue until they were notified by the credit bureaus and then they would look into it. He went on to say that a payment deferment and payment delinquency were the same as a "charge off". 

The employee then asked if i was still looking into trading the car in and I told him that with the "charge off" no dealership would consider financing me. This individual stated that I could still go to Dealin Dougs Dealership and THEY would assist me. At that point I declined and informed him that I would follow through with other avenues to address this issue. 

Due to the sequence of events with a dealership that will overcharge people who need special financing due to financial circumstances, I believe the company falsely reported my account as a "Charge Off" to keep me from going outside of their preferred network and to keep me locked into a loan that it creating a outrageous profit for them on a car that has no value. 

Additionally, the false report to the credit bureau caused my credit score to tank and is continuing to prevent me from other opportunities that relied on credit. 

On 12/20/12 I checked my credit report and was notified by the credit report agency that the Kids Auto "Charge off" has been removed from the credit report. However, it was also during this week that I received a call from my co-signer that a call was made to the insurance company I originally insured the car with for a couple of months. 

On 1/7/13 I received a letter from C.A.R. Finance dated 1/3/13 The letter stated that my account is "past due for $6562.34

Following information was contained in letter:

NOTICE OF VIOLATION OF CONTRACT PROVISIONS- 

YOUR INSURANCE COVERAGE HAS EITHER BEEN CANCELLED, LAPSED OR CHANGED. 

Letter was unsigned!

I immediately contacted my insurance company to inquire about my account. The insurance company notified me of the following information:

1. Insurance is current and up to date. 

2. Coverage began when the car was bought and the finance company was notified by mail of coverage.

3. In Jan 2012 there was a 5 week insurance coverage lapsed and the finance company was notified.

4. The insurance lapse was remedied and the finance company was notified again.

It seems apparent that the company is trying to find a way to justify actions that led to the original filing of this dispute and additional information that I have provided. 

CAR Finance did not respond to the first notification from the BBB by the deadline. A second notification has been sent and CAR Finance has yet to be notified. 

The next step will be to go to the State Dealership Board and have them review my original contract papers on the car and my financing. Additionally, Kid's Auto never provided me with a CAR Fax when I requested it and stated that they do not have to provide one to car buyers. Kids Auto has always had a bad reputation and this company along with all it's affiliated names need to be addressed for the deceptive practices, false reporting, overcharging consumers and taking advantage of consumers financial hardships. 

This report was posted on Ripoff Report on 01/19/2013 10:50 PM and is a permanent record located here: http://www.ripoffreport.com/r/Kids-Auto/Denver-Colorado-80223/Kids-Auto-Moreland-Kids-Financial-Inc-doing-business-as-CAR-Finance-Kids-Automoti-999974. The posting time indicated is Arizona local time. Arizona does not observe daylight savings so the post time may be Mountain or Pacific depending on the time of year.

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REBUTTALS & REPLIES:
1Author 3Consumer 0Employee/Owner
Updates & Rebuttals

#1 Consumer Comment

A little more education

AUTHOR: Robert - (U.S.A.)

1. The 2 payments deferred were agreed upon by CAR Finance to use as a down payment on a new car based on the fact that my payments prior to that were timely.
-
NEVER a good idea because you are still going to owe that money.  The only thing this in effect does is put that balance on your new loan..making your next vehicle even more "upside down". 

2....Therefore, by the time I began applying financing they already reported a "charge off" even  though they told me to hold on to the payment for that month to use as a deposit.
- Do you have anything in writing that they approved this deferred payment?  If not, while I agree the "Charge Off" MAY not be valid..at the very least you may have some late payments.

3. Insurance notifications are done by the insurance companies. This was verified by my insurance company along with the dates that they sent the notification out! If there was an issue the time to bring issue up is not 10 months later...when there is a complaint filed against them. 

- Again I agree with you that it should not have taken 10 months.  But while inconvenient, it doesn't change the fact that it did happen.  So if this is the basis for the "Charge-Off" it may be a valid listing.

Oh, and lets further recognize that a 11 year old car valued at $500.00 was sold at $10,000.00 after interest is applied.
- You can't go by this.  The car was not sold at $10,000.  You paid less than that, with the "interest" being the cost for you to borrow the money and is not included in the car price.  The basic rule with a car is that they all LOOSE value.    If you overpaid for the car when you got it, unfortunately that is on you as you need to do this research on ANY car from ANY dealer before you sign on the dotted line.  But if the price you end up paying and it's value at the end of the loan is going to be your basis..then you better save your money and never finance another car..because it will happen again.  Especially if you do things such as rolling in the negative equity into new loans.

Good luck, pay off the loan as soon as you can and if it is truly only worth $500, once paid off basically run it until it fails.  Where once you do, every month instead of putting the money to the payment..put it in savings to put toward a new car when it finally fails.
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#2 Author of original report

HERE'S A LITTLE EDUCATION.......

AUTHOR: dani - (United States of America)

First let's define "Charge Off": A charge-off is the declaration by a creditor that an amount of debt is unlikely to be collected. This occurs when a consumer becomes severely delinquent on a debt. Traditionally, creditors will make this declaration at the point of SIX months without payment.

In sequential response to the rebuttal of my original complaint.

1. The 2 payments deferred were agreed upon by CAR Finance to use as a down payment on a new car based on the fact that my payments prior to that were timely.

2. I began looking at "options" to buy another car with both the "recommended" dealership by the finance company (Which, by the way, they all operate under Moreland Auto Group) and I was looking at finance options at other dealerships. In mid August (after my monthly payment) I began looking at "cars" and "prices" before I actually applied. With the on-going conversation with the finance company on the ridiculous upside down pay-off and I didn't begin to apply for financing until sometime in late September. Therefore, by the time I began applying financing they already reported a "charge off" even though they told me to hold on to the payment for that month to use as a deposit. I found that they had falsely reported the "charge off" in December and it was reported in September as verified on my credit report. (oh and lets keep in mind a charge off is different than a late payment!)

3. Insurance notifications are done by the insurance companies. This was verified by my insurance company along with the dates that they sent the notification out! If there was an issue the time to bring issue up is not 10 months later...when there is a complaint filed against them.  

4. In regard to the numbers not adding up, THANK YOU for bringing this to my attention. After I looked into my paperwork the car was bought in Oct. 2010. With 2 deferred payments I have paid a total of 24 payments with 18 left which would verify an approx. payoff of 6160.00.

Additionally, I just found out that Kid's Auto is out of business and the finance company moved to Centennial CO and kept the same phone number.  Oh, and lets further recognize that a 11 year old car valued at $500.00 was sold at $10,000.00 after interest is applied.

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#3 Consumer Comment

as usual

AUTHOR: The Outlaw Josey Wales - (United States of America)

bob from irvine must insult anyone he doen't like, mr know it all is so high on his pedestal he must get nose bleeds, why don't you help your friend stacie get a job instead of wasting time on this forum????
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#4 Consumer Comment

Another case of...

AUTHOR: Robert - (U.S.A.)

A sub-prime borrower not telling the entire story.

It is very interesting how in August 2012 you thought your credit score improved to such as point that you were thinking of getting a new car.  Yet just ONE month later, you had to have them defer 2 months of payments.  Which by some amazing coincidence is the same month they report a Charge-Off.  You then complain that with the "Charge Off" no company would finance you, of course no company financed you before the Charge Off because you looked at getting a car in August 2012(before the Charge Off) was posted and were denied based on your credit.

But it gets better.  You admit in January 2012 that you had a 5 week lapse in insurance coverage and that they were notified.  Unfortunately, it doesn't usually work that way where you can just notify them as every finance company requires insurance coverage.  If not, they may have the right to put in "Forced" placed insurance or to call the loan(require the full balance to be paid immediately).  Now, should it have taken a year to catch-up to you...probably not, but it doesn't change the fact that you were 5 weeks without coverage.

Then your numbers do not match.  Even if you bought the car in 12/2009 and had the first payment in January 2010, a 42 month car loan puts you with the last payment due in about June 2013.  At $339/month and including your 2 deferred you are only going to be making another $2,712 in payments.  If the loan is as you said and have been current the entire time(with the exception of the deferments)...this would pay off your loan and not have a little of $3,000 balance remaining.

So what are you leaving out?
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