What is the "forgot to pay off your trade-in" scam?

What is the "forgot to pay off your trade-in" scam?

James Bell (Publisher, Auto Reviewer) gives expert video advice on: What is the "wrecked used car as is" scam? and more...

At times you'll bring in a trade-in that maybe you still owe money on. The dealer will very graciously say, "Oh, I'll pay that off for you, and here's your trade-in value, and we can use it towards a down payment on a new car." You think, "Wow! That's nice and clean, very easy for me."But the problem comes is if the dealer doesn't actually pay that off for you-- you're still responsible for that. So, two months later, the company that you financed the first car with is comes knocking, looking for money. Your credit score is being damaged, and it turns out that you still owe money on the first car. Now, if the dealer does go ahead and pay off the first car, know that there is no free lunch; that money that was owed is now being put into your new car financing. So it's better to have the car completely paid off, free and clear before you ever go into the dealership.