Car Owner Runs Into Problems on Trade-In

When Brent Hector traded in his old minivan, a 1999 Chevrolet Astro, for a 2002 Kia Sedona, he assumed the dealership would hold up its end of the deal by registering and paying off the Chevy.

But that didn’t happen.

As a result, the 47-year-old Chatsworth resident found himself in a red-tape nightmare--and the unwitting owner of both vehicles and thus two monthly car payments--when the dealership went out of business.

About a month after his Aug. 5 transaction with Autoworld Kia of Northridge, Hector began receiving late-payment notices on the Astro van.

To his dismay, General Motors Acceptance Corp., the financing arm of Chevy maker GM, informed him that the vehicle he had traded in was still registered in his name and that he was responsible for the payments.

Hector immediately contacted Autoworld Kia. But employees there kept putting him off and failing to return phone calls, he said. Finally, on the day he had been promised that the dealership owner would call back, Hector discovered that Autoworld Kia had closed its doors for good.

Hector drove to the dealership, he said, only to find that the doors were locked and trucks were taking vehicles off the lot.

“It was so frustrating,” he said. When he called Kia customer service for an explanation, he said, representatives told him that it was the dealership’s responsibility and therefore the auto maker could not help him.

Regardless of who was responsible, there was an even bigger question that no one could seem to answer: Who had the Astro van?

Hector next turned to lender GMAC for help. But its representatives insisted that “I had to pay the Astro van payments, even though I had traded it in,” he said.

Even after the California Department of Motor Vehicles later confirmed that Autoworld Kia had finally registered the vehicle Sept. 22, GMAC continued to demand that Hector make payments on the vehicle because the dealership had failed to do so.

“I ended up paying $590 in payments for a vehicle no one could even locate,” Hector said. That was on top of the $339 monthly payments he said he was making on his new Sedona minivan.

Hector, who contacted The Times about the problem, described himself as a hard-working family man who was tired of being stonewalled.

“I work two jobs. I pay my bills before I eat,” said Hector, a respiratory therapist. Finally, after weeks of phone calls and getting nowhere, Hector caught the attention of Kia’s Western regional manager, Phil Kelly, who agreed to try to resolve the problem.

“He was sympathetic. He said he’d take care of it, and he kept his word,” Hector said.

Last Friday, Kelly said, he persuaded Kia’s financing arm to pay GMAC $8,858.59 to pay off the money owed on the Astro van. In addition, Kelly said, GMAC has agreed to reimburse Hector for the payments he had already made.

(As of late Monday, however, Hector said he had not received confirmation from GMAC or heard from anyone about the Astro van’s whereabouts. Nor could Kelly say for certain where the van might be.)

Kelly told Your Wheels that Kia also is working to help two other Autoworld Kia customers with problems similar to Hector’s.

But the apparent resolution of Hector’s case doesn’t mean the parties involved have agreed about what went wrong--or who bears responsibility for the customer’s suffering. Kelly said the dealership went out of business because of financial problems; the dealer said Kia’s financial arm forced it to close.

“The dealership was attempting to work its way out of financial difficulty ... when the lender stopped funding [the dealer’s purchase of] new cars to sell,” said attorney Steven Smith, who represents Jacob Ribis Inc., the corporation that owned Autoworld Kia and two other dealerships. When that funding dried up, Smith said, the dealer was forced to close.

Smith said the dealership’s inability to pay off trade-in vehicles such as Hector’s was unfortunate but that “I don’t think anyone meant any harm.”

Hector’s struggle illustrates the difficulties consumers can face when dealerships fold--especially if the manufacturer balks at getting involved. It was Hector’s persistence that got him results.

Problems such as his “are not unheard-of when dealerships go out of business,” DMV spokesman Armando Botello said.

The agency regulates dealerships and investigates complaints against them. Botello said customers who experience problems with dealers should file official complaints with the DMV.

Consumers also can turn to the New Motor Vehicle Board’s mediation services program in Sacramento, said Dawn Kindel, mediation manager for the board. The mediation unit, at (916) 445-1888, can intervene on a customer’s behalf and mediate transaction disputes. Customers who believe that they have been defrauded by a dealership also are urged to notify the state attorney general’s consumer law section in Los Angeles, (213) 897-2000.

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Jeanne Wright cannot answer mail personally but responds in this column to automotive questions of general interest. Please do not telephone. Write to Your Wheels, Business Section, Los Angeles Times, 202 W. 1st St., Los Angeles, CA 90012. E-mail: jeanrite@aol.com.