Bank made mistake on car loan transaction now wants me to pay - really upset situation?

We have a car owned by a distant relation, living in the same house. The car was under his name financed at Wells Fargo. Now he financed it again with a credit union bank and put both his and my name on it. The bank approved the loan, we signed a bunch of papers, things went thru.

Yesterday they called stating they forgot to put the tax on the car. They said eventhough my relative's name is still on the car, but since he added my name to it, it is considered a sale, and that according to California DMV regulation, our relationship does not belong to a category for a tax free car transfer. They say we have to pay $1052 tax, either upfront or add it in the car equity into the finance.

All of a sudden they want $1052, we are so unprepared, do not have such money to pay. It's outside of our plan and screws everything up.

Now that the bank made a mistake, they approved the loan, documents signed, and because of their approval, we let go another great deal from another loan at other bank.

Also, because of this problem, we also lose about $500 group car insurance discount per year(unique car insurance discount situation).

What can we do to fight back with this credit union. They made a mistake not disclosing the tax to us and also did not add the tax to the signed transaction. We are really upset and want to fight back.

Thank you.

4 Answers

Relevance
  • Never
    Lv 7
    9 years ago
    Favorite Answer

    This is at least partially your fault as you should have looked into the above prior to transferring it.

    That said, Ive never heard of a lien holder being responsible for collecting & remitting sales tax. (Its not like that in most states)

    The bottom line is your transaction was a taxable event. Taxes must be paid. The lender made an honest mistake. They are not going to have to pay your taxes.

    But its nice of them to offer to add it into the financed amount.

    Now, if you can fight with the state of CA and get them to say that taxes are not owed, THEN you wont have to pay them. Good luck on that.

    The car insurance issue is also not the banks problems.

    Look in the mirror...repeat after me...."I am responsible" over & over.

  • 4 years ago

    1

    Source(s): Easy Car Loan Approval : http://carloan.trustdd.com/?rMoV
  • JetDoc
    Lv 7
    9 years ago

    Sounds to me as if the bank or credit union screwed up in processing the paperwork. As long as the original owner's name is still on the title, then it should not be considered a sale, and no taxes should be paid.

    You may have to talk with a lawyer to get this straightened out.

  • ?
    Lv 7
    9 years ago

    read your loan papers

Still have questions? Get your answers by asking now.