My daughter-in-law recently purchased a 2003 Jeep Liberty from DriveTime which is not advertised as such but is a "Buy Here Pay Here" (BHPH) organization. The contract she signed did not correctly disclose what she would be paying in total for the Jeep but most all of the totals of interest, amount of financing, were off by as much as $5,230.65.
The only disclosures that were correct was the bi-monthly payment and the interest rate which if totaled makes all the other disclosures wrong. Nowhere in the paperwork she signed is there any disclosure that she must pay additional charges. The bottom line is she would be paying $28,842.32 for an auto which is valued at around $8,000.00 with 22.388% interest. That is; 277.33 payment X 104 payments.
Until recently "Truth in Lending" requires most lenders to disclose most of the aspects of the loan/sale. Most buyers at the time of sale can't calculate compound Interest"” hence, "Truth in Lending". However, looking at the regulations I see BHPH organizations somehow fell through the cracks and weren't regulated. See; http://articles.latimes.com/2012/apr/21/business/la-fi-buy-here-suit-20120421 where specifically DriveTime and other BHPH organizations are being investigated by the U.S.
Consumer Financial Protection Bureau-- article from the L. A. Times.
My question is, isn't this a fraudulent contract and even though BHPH's may not be regulated does this constitute fraud? If so, how expensive would it be to return the car and have this contract declared null and void?
Researching DriveTime on internet there are many, many complaints about all aspects of this organization and a good reasons for not wanting to stay in this contract. In my opinion everything about DriveTime is fraudulent.
Monetary Loss: $20.