How long after buyback closing is a bank loan paid off?

This is where my patience with VW will end. I was very patient through the doc submittal phase, offer phase etc. But I turned in my car Monday and had the funds in my account yesterday, that's not even 2 business days (i.e. so I know the process of transferring funds can work quickly). If I reach business day 6 with my loan still showing a balance I will get a hold of our class counsel. This particular delay in the process can affect people's credit rating, unless of course we are willing to make an extra payment on a vehicle that was turned in. The other steps in the process that are delayed definitely annoyed owners, but didn't ding their credit.

Buddenlee1 said:

I hate this bs. Were making payments on a car were not driving than we turn in car and still making payments on a car that we dont even have. Ive heard youll get your payment back but will that be whole payment or minus interest. Because most of my payment goes to interest. Cant we just make a princepal payment? My payment to vw credit is 450.00 and if i recall princpal was only 145.00. My app. Isnt until jan 18th so im makeing dec. 22 payment than looks like im going to be doing Januarys also

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I hope that you have the interest and principal reversed!

DFWJason33 said:

This is where my patience with VW will end. I was very patient through the doc submittal phase, offer phase etc. But I turned in my car Monday and had the funds in my account yesterday, that's not even 2 business days (i.e. so I know the process of transferring funds can work quickly). If I reach business day 6 with my loan still showing a balance I will get a hold of our class counsel. This particular delay in the process can affect people's credit rating, unless of course we are willing to make an extra payment on a vehicle that was turned in. The other steps in the process that are delayed definitely annoyed owners, but didn't ding their credit.

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I'm not sure why everyone is worried about making a payment on a vehicle that was already turned in. As long as you have the paperwork showing you turned in the vehicle before the payment you don't have to make it as you no longer own it. This is same thing that happens when you trade in a car as it can take a few days to pay off the loan.

DFWJason33 said:

This is where my patience with VW will end. I was very patient through the doc submittal phase, offer phase etc. But I turned in my car Monday and had the funds in my account yesterday, that's not even 2 business days (i.e. so I know the process of transferring funds can work quickly). If I reach business day 6 with my loan still showing a balance I will get a hold of our class counsel. This particular delay in the process can affect people's credit rating, unless of course we are willing to make an extra payment on a vehicle that was turned in. The other steps in the process that are delayed definitely annoyed owners, but didn't ding their credit.

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Please update us here in this thread! I hear you about short patience on this topic... I'm just trying to be realistic and save myself more of what I consider inevitable frustration. But I suppose if a bunch of us start raising a ruckus sooner rather than later, it will probably help.

gsmith2424 said:

I'm not sure why everyone is worried about making a payment on a vehicle that was already turned in. As long as you have the paperwork showing you turned in the vehicle before the payment you don't have to make it as you no longer own it. This is same thing that happens when you trade in a car as it can take a few days to pay off the loan.

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Because the bank doesn't look at it that way. Your name is on the loan, your SSN is attached to the loan, your credit history is attached to the loan, and interest is accruing on the loan for as long as it remains open. Also, the bank still holds a lien on the title or has the title itself in their possession (depending on how your state works with titles)... so that has not been released yet. So they will just keep on billing you until the loan is paid off.

So until the payoff comes in from VW, you are responsible for maintaining that loan. True, you can perhaps get a deferment, etc., but the interest is still accruing. And yes, you can call them up and explain the situation, but in the end, your name is still on that loan. They can put all sorts of notes on your account telling the woes of VW, but in the end, if you choose not to make a payment while we're waiting for VW to get their act together, don't be surprised if the bank decides to ding your credit and charge you late payment fees.

jtdid said:

Because the bank doesn't look at it that way. Your name is on the loan, your SSN is attached to the loan, your credit history is attached to the loan, and interest is accruing on the loan for as long as it remains open. Also, the bank still holds a lien on the title or has the title itself in their possession (depending on how your state works with titles)... so that has not been released yet. So they will just keep on billing you until the loan is paid off.

So until the payoff comes in from VW, you are responsible for maintaining that loan. True, you can perhaps get a deferment, etc., but the interest is still accruing. And yes, you can call them up and explain the situation, but in the end, your name is still on that loan. They can put all sorts of notes on your account telling the woes of VW, but in the end, if you choose not to make a payment while we're waiting for VW to get their act together, don't be surprised if the bank decides to ding your credit and charge you late payment fees.

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Then how does trading a car in work then if what your saying is true? Because in the eye of the law as soon as you sign the car over VW takes ownership of the car and agrees to pay the loan off (same as if you trade a car in).

gsmith2424 said:

Then how does trading a car in work then if what your saying is true? Because in the eye of the law as soon as you sign the car over VW takes ownership of the car and agrees to pay the loan off (same as if you trade a car in).

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From my understanding (and I would love to be wrong about this, but I'm not taking the risk), when you are doing a trade-in with a dealer, and you still owe money on that car, you are in fact, still putting yourself at risk, and don't even realize it.

However, the dealer is highly motivated to take care of the payoff right away so it can get the title, and then resell your vehicle. But that doesn't always happen. So while a dealer can and most often will do this quickly, they don't always do that. So even with a dealer, you are exposed to risk. There are a bunch of ways this can go wrong, and in the bank's eyes, you are STILL liable for the loan, until it is paid off.

In the case of the VW buybacks, VW is also motivated to take care of this right away, so they can get the titles/liens released to the vehicles in question from the banks. HOWEVER, VW is not exactly meeting its obligations of managing these transactions quickly and sticking to the court-approved dates! Do you want to take a chance with that? So you are STILL liable for the loans until VW gets their act together. In THEORY you'd think that VW (or a dealer that you trade in a car with) would be responsible for paying the extra interest, etc... but some dealers play games with timing and payoff dates too, etc... and you don't even realize this when you do a trade in!

Here are a couple of links for you to read about how loan payoffs from dealer trade-ins actually work, and some of the risks:

http://www.consumer.ga.gov/consumer...er-to-pay-off-your-loan-can-be-risky-business

http://www.consumerlawgroup.com/blog/2014/06/games-dealers-play-not-paying-off-the-trade-in.shtml

http://www.consumerreports.org/cro/...ar-ensure-the-auto-loan-is-paid-off/index.htm

The list goes on and on about the potential hazards of what can happen.

My very humble advice: 1) keep paying off the loan until VW finally takes care of business... and 2) if VW delays too long, then call the class counsel and raise a ruckus to get VW to honor their agreement.

My two bits only. I am not a lawyer. YMMV.

I agree 100%, individual car dealerships want/need to pay off your existing loan as fast as possible to get their hands on the title. I have traded in 4 cars in the past and in none of these scenarios did it take more than a couple of days.
Now I step forward to VW and the car I turned in Monday night. What is their real motivation to pay off my loan quickly? There isn't one. My car was a 2015 so their payment to me was less than half of what they need to pay to VW Credit, so it's in their best financial interest to hold that cash for X number of additional days. That's why on Day 6 if I still have a balance I'm emailing class counsel.

The timing should work out for me. My payment due date is the first of the month, and my buyback is on 2/2. My CU has a ten-day grace period, so as long as the deposit happens in that five-business-day window I'll be fine. I'll keep an eye on it and keep the payment amount at the ready in case day 10 rolls around and it's still not there.

jtdid said:

From my understanding (and I would love to be wrong about this, but I'm not taking the risk), when you are doing a trade-in with a dealer, and you still owe money on that car, you are in fact, still putting yourself at risk, and don't even realize it.
However, the dealer is highly motivated to take care of the payoff right away so it can get the title, and then resell your vehicle. But that doesn't always happen. So while a dealer can and most often will do this quickly, they don't always do that. So even with a dealer, you are exposed to risk. There are a bunch of ways this can go wrong, and in the bank's eyes, you are STILL liable for the loan, until it is paid off.
In the case of the VW buybacks, VW is also motivated to take care of this right away, so they can get the titles/liens released to the vehicles in question from the banks. HOWEVER, VW is not exactly meeting its obligations of managing these transactions quickly and sticking to the court-approved dates! Do you want to take a chance with that? So you are STILL liable for the loans until VW gets their act together. In THEORY you'd think that VW (or a dealer that you trade in a car with) would be responsible for paying the extra interest, etc... but some dealers play games with timing and payoff dates too, etc... and you don't even realize this when you do a trade in!
Here are a couple of links for you to read about how loan payoffs from dealer trade-ins actually work, and some of the risks:
http://www.consumer.ga.gov/consumer...er-to-pay-off-your-loan-can-be-risky-business
http://www.consumerlawgroup.com/blog/2014/06/games-dealers-play-not-paying-off-the-trade-in.shtml
http://www.consumerreports.org/cro/...ar-ensure-the-auto-loan-is-paid-off/index.htm
The list goes on and on about the potential hazards of what can happen.
My very humble advice: 1) keep paying off the loan until VW finally takes care of business... and 2) if VW delays too long, then call the class counsel and raise a ruckus to get VW to honor their agreement.
My two bits only. I am not a lawyer. YMMV.

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Completely agree with this and your previous post. People that think they are no longer obligated to pay their car loan once they turn over the keys need to snap out of their fantasy world and come back to reality. Ignore anyone who tells you differently. *YOU* ARE RESPONSIBLE FOR PAYING THE LOAN UNTIL THE LOAN IS PAID OFF.

atomicfront said:

Wait they can't even mark the loan as paid off within their own company? What a bunch of morons. I still say the CEO of VW North America should be fired over this fiasco.

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I spoke to two high level VW credit managers and that was their response to me. They said they can make a note on the file, but cannot mark it paid off until VWoA sends the EFT and it processes. Until then, I am still financially responsible for the vehicle, and I have a note due on the 25th. VW can go to hell if they think I'm going to make a payment on a car I don't legally possess. And if they ding my credit, it's attorney time. They took possession of my car, they are responsible for it, not me.

gsmith2424 said:

I'm not sure why everyone is worried about making a payment on a vehicle that was already turned in. As long as you have the paperwork showing you turned in the vehicle before the payment you don't have to make it as you no longer own it. This is same thing that happens when you trade in a car as it can take a few days to pay off the loan.

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This is absolutely not true. The fact is you still do own it until that payment processes according to VW credit. I guess VW Credit may be incorrect, but they told me that the credit ding is an auto-process once the loan payment date goes beyond the 10 day grace period. They also said that until the payoff is processed, the vehicle is still legally in my name.

visortgw said:

I hope that you have the interest and principal reversed!

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Yes i did. Lol

This is killing me that after how many weeks of buybacks, nobody is checking in with a payoff timeline.

I *know* the majority of loans must be getting paid in a timely manner, or else this board would be overflowing with tales of woe and vengeance. I *know* most members are completing their buybacks and leaving this forum.

But surely there's someone present with a successful payoff that can chime in???

I'll be glad to report back when my loan at PenFed credit union is cleared.

It's been 4 business days (buyback last Saturday) and not paid off yet. I check daily out of curiosity. My CU said VW would probably have to mail a check to them with the POA for the title.

PacCoastFwy923 said:

I *know* the majority of loans must be getting paid in a timely manner, or else this board would be overflowing with tales of woe and vengeance. I *know* most members are completing their buybacks and leaving this forum.

But surely there's someone present with a successful payoff that can chime in???

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I don't believe enough time has passed that enough people with loans have been through the system yet.

For all we know, we might be the first wave (and frankly I believe we most likely are the first wave).

Keep in mind that people with loans appear to have been pushed back a little compared to people who had a clear title (see the spreadsheet). Also, according to some recent status update with the court, the number of people VW had processed with loans was relatively small compared to the number of people with clear titles, lending credibility to the idea that VW dragged their feet with people who had loans.

Also, not that this is scientific evidence of a larger pattern, but when I did my buyback on Dec 19th, my buyback specialist told me I was the FIRST one she had done with a loan.

So my theory is that we are actually the first wave of buybacks with loans. I think we're the guinea pigs. I hope not, but all the info I can gather so far supports that.

That's why we need to update this thread and raise a ruckus with the class counsel if VW doesn't get their act together soon.

Then that's a scary thought. As I've speculated in previous posts, if VW knows how much they're paying the owner, they know the remainder is going to the bank. That check should be cut and mailed at the same time the EFT to the owner is being processed. Delaying this critical step even by a day seems insane and begging for all sorts of trouble an litigation.

PacCoastFwy923 said:

Then that's a scary thought. As I've speculated in previous posts, if VW knows how much they're paying the owner, they know the remainder is going to the bank. That check should be cut and mailed at the same time the EFT to the owner is being processed. Delaying this critical step even by a day seems insane and begging for all sorts of trouble an litigation.

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It's also the most dangerous from a legal standpoint. They could potentially be screwing with people's credit scores, therefore causing them long term and provable damages. I have a receipt showing my car was successfully turned in to VWoA. They possess my car. They would lose in court. They have one more business day before they go beyond the court mandated 5 business days, and I'll be contacting an attorney next week. I'm not playing around when it comes to my credit.

If you aren't playing with your credit, then make the payment, and when the payoff gets processed, get it back in a refund.

I posted this in another thread, but here was my scenario today:

Buyback completed today at 1pm, pretty seemless, took about 10 mins. They had the paperwork, not sure why we printed it out in advance? For those with a loan like myself. My payment amount was around $1800 less due to VW having my payoff date as 12-16. Since then a payment has gone through and my loan was paid down with my service contract refund. Will VW reconcile the amount and pay me what's owed before the EFT is done, or will they overpay the loan and I will have to wait for the overage to be sent to me from VW Finance? I am guessing latter. Ambassador had no clue.

Just speculation here, but I think you'll likely get the overpayment back from your bank. From VW's perspective, it's much easier to keep the steps as simple as possible -- in other words, they'll likely only call your bank ONCE... and that is to get the initial payoff amount for your offer, which will surely be out of date by the time they get around to processing your car and paying off the bank. So the logical process for them is to just send the amount from the recent payoff call directly to the bank, and let the bank deal with the overpayment with you.

IF they wanted to be 100% accurate, it would require several more steps: that would require VW to call the bank at least TWICE to get the updated payoff number (since the first payoff number for your settlement letter will already be too old), then send you an additional EFT, risk further delays and get the payoff amount wrong AGAIN with your bank...

So, I think they'll keep it simple and just let the bank deal with overpayment. Of course, knowing VW at this point, they'll find some way to drag even the simplest process out.

My two bits only.

PFCoppinger said:

If you aren't playing with your credit, then make the payment, and when the payoff gets processed, get it back in a refund.

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You will get it back in a refund minus the additional interest. You will be paying interest on a car you no longer have. There are laws in most states regarding payoffs of cars. VW is leaving themselves wide open for additional litigation if they treat this step like the rest. The FTC won't be able to get up and say everything is fine to the judge. I turned in my car 12/19 as of 12/23 the loan has not been paid off. The end of next week I will have to make another payment to keep it from being late. Hopefully they get it together by then, I feel bad for the people who aren't in a position to make payments on a car they don't have.

PFCoppinger said:

If you aren't playing with your credit, then make the payment, and when the payoff gets processed, get it back in a refund.

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I'm not playing with my credit, they are. I have the law on my side, unlike the other steps in the process. I no longer possess the car, and they are responsible for the payoff being timely processed. This will be a much bigger legal issue for VWoA than any other one during this process.

So, the payoff date on my offer letter is for a payoff as of 12/25; my appointment is scheduled for 2/2, so there will be at least one payment between now and then.

Do they get another payoff amount closer to the appointment date?

Mr. Furious said:

So, the payoff date on my offer letter is for a payoff as of 12/25; my appointment is scheduled for 2/2, so there will be at least one payment between now and then.
Do they get another payoff amount closer to the appointment date?

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My payoff letter had 12/01 listed for the "outstanding loan" amount and my settlement appointment was 12/19. On the settlement day, the numbers presented by VW were exactly the same as the original letter. So at least in my case they did NOT call to get another payoff amount. And that makes sense. It is easier for them to just call ONCE. And then let the banks deal with overpayment refunds.

I have already paid another car payment since my offer letter, and may end up paying yet another one waiting for the final payoff, so I'm expecting an overpayment refund from the bank at some point, assuming VW pays them the amount they said they would. And VW better pay off my bank soon! It's been 4 business days, and my car loan has not been paid off yet.

beancounter said:

You will get it back in a refund minus the additional interest. You will be paying interest on a car you no longer have.

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This is absolutely true. If it only takes 5 business days to complete, though, like it is supposed to (according to the settlement), then the interest will be negligible.

However, if they let this drag out over weeks or months, then the interest can rack up, and VW is essentially ripping us off by the accruing interest amount... and VW therefore has a very serious problem on their hands... not to mention the negative impact on people who decide not to make payments while they wait, and the impact on credit ratings, etc... as has been discussed here in this thread... it could get VERY messy for VW (and people here) if they don't take care of these outstanding loans quickly.

jtdid said:

Just speculation here, but I think you'll likely get the overpayment back from your bank. From VW's perspective, it's much easier to keep the steps as simple as possible -- in other words, they'll likely only call your bank ONCE... and that is to get the initial payoff amount for your offer, which will surely be out of date by the time they get around to processing your car and paying off the bank. So the logical process for them is to just send the amount from the recent payoff call directly to the bank, and let the bank deal with the overpayment with you.

IF they wanted to be 100% accurate, it would require several more steps: that would require VW to call the bank at least TWICE to get the updated payoff number (since the first payoff number for your settlement letter will already be too old), then send you an additional EFT, risk further delays and get the payoff amount wrong AGAIN with your bank...

So, I think they'll keep it simple and just let the bank deal with overpayment. Of course, knowing VW at this point, they'll find some way to drag even the simplest process out.

My two bits only.

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Those are my thoughts as well. Either way I would be waiting on extra money. If I had waited and canceled the service contract today, I would be waiting on that check, and an overage check from VW finance. I thought I had it all figured out to get all the money owed to me in one fail swoop. Alas I was wrong!

JGEO said:

I thought I had it all figured out to get all the money owed to me in one fail swoop. Alas I was wrong!

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Maybe you weren't wrong after all

In any case, mine goes back on the 28th. I missed the call on my phone that was reportedly from a specialist to conference with my credit union and obtain a pay-off amount. They haven't called back.

I haven't bothered to call my credit union to see if VW contacted them. My take on this is to sit back and relax (my personal take, not my advise to others). So far it's worked out because everything has gone timely and smoothly so far (except for that possible missed call). I mainly wanted to schedule my buyback after Christmas so we could travel in the JSW for all the family stuff before we have to start stuffing ourselves back into the bug.

I had pretty much resigned myself to making an extra payment in the first week of January, but if it takes more than a month I'm not sure how I will feel. I will be agitated but I don't know how much. Right now I'm not motivated enough to spend more time on the phone with anyone than the value of the interest on my loan.

I will say this, though, for some people this goes beyond a credit ding. If you're trying to buy a new car then you have a substantial credit liability on record that could limit choices and adversely impact financing terms.

Well I guess you can add me to the list as well. I returned my TDI on the 16th so Friday would have been 5 business days. I called Bank of America and they do not show any pending payments. They told me to check back on Wednesday due to Christmas possibly delaying things. I'm paid in advanced through May so VW can take their sweet time before I'd have to make another payment... but I suppose I'm being penalized with daily interest until they finally pay it off. I'll report back when it's finally paid off.

I guess for those with loans with outside banks, VW doesn't gain much by delaying payments on the loan. But for those with VW credit loans it's messed up that they are delaying. For me it's about $2 a day in interest. 5+ business days is really 7+ days in interest. So for me they are squeezing out at least another $14 in interest provided they pay it off by then. If it goes longer which it seems like it is for others, that number just goes up. Plus they are holding the money that they should be paying my loan with, earning interest I would imagine. Just a messed up situation that there is no penalty for them delaying on this part. Since there is quantifiable costs that we as the ones on the hook for the interest are incurring. 5th business day for me is Tuesday. I will be on the phone at that point with the claim line. And an email and call to the attorneys will happen too. Such bull****.