Car Loans and The Truth In Lending Act

What is TILA?

Truth In Lending Act cases are complicated and require competent legal representation. If you believe you have a Truth In Lending Act case, consult an attorney for more information.

The Truth in Lending Act (TILA) is a federal law that protects you against inaccurate and unfair credit billing and credit card practices. It requires lenders to provide you with loan cost information so that you can comparison shop for certain types of loans. Also, TILA allows parties bringing a TILA claim to have their cases heard by federal district judges.

Car Loans and the Truth In Lending Act

In Pierre v. Planet Auto. Inc., Plaintiff Pierre (“Buyer”) agreed to purchase the car, a 2012 Suzuki Kizashi, for around $25,000.  However, in order to secure an automobile loan from Planet Automobile (“Dealer”), the Dealer required the Buyer to “buy down” the interest rate of her loan by purchasing additional products for the car.  As a result, the final purchase price was almost $34,000, an eye-popping $9,000 above the agreed price of $25,000.  During the sale, the Dealer gave the Buyer four documents, each with a different listed price. The Buyer was concerned that the different prices on the four documents illegally increased the price of the car and inaccurately disclosed the cost of the loan.

So, the Buyer sued both the Dealer and American Suzuki Financial Services (“Suzuki”) for federal law violations in the Truth in Lending Act and Magnuson Moss Consumer Warranty Act, along with New York state-law claims of fraud and false advertising.

Suzuki filed a summary judgment motion asking the magistrate judge for a decision before the trial began. The magistrate judge granted summary judgment, deciding in favor of Suzuki on both federal and state law claims. Since only Suzuki filed a summary judgment motion, the magistrate judge’s decision meant that the lawsuit was now between the Buyer and Dealer. Seeking justice against Suzuki, the Buyer appealed the magistrate’s decision and the case went up to the United States District Court of the Eastern District of New York for review.

District court judge Margo K. Brodie had to decide whether or not to uphold the magistrate judge’s decision. Judge Brodie concluded that the factors of “economy, convenience, fairness, and comity” weighed in favor of reversing the magistrate’s decision to allow the Court to review the Buyer’s state law claims against Suzuki. Further, Judge Brodie reserved decision on the dismissal of the federal Truth In Lending Act claim, which means she may well reverse given what appears to be a fairly clear-cut TILA violation.  If so, what once looked like a defeat for the Buyer could turn out to be a victory.

Act Now! 

If you don’t bring your Truth in Lending Act case within one year from when you enter into the contract, any lawsuit would be time-barred, meaning you can’t sue.

Protect Yourself and Your Rights from Deceptive Dealers

The bottom line is, cars are expensive and financing a car can seem complicated.  Make sure you get everything in writing and keep all of the documents from the deal.  If the dealer or its salesperson is telling you something but refusing to document it walk away.  If it doesn’t make sense, have them explain it.  If you think you are being taken advantage of or if the car is having problems that just don’t seem right for a car you just bought, contact a lawyer because you may be able to do something about it.

For more information or to schedule a consultation, please email me at David@KasellLawFirm.com or call (718) 404-6668. I look forward to working with you!

This material may be viewed as attorney advertising and does not constitute legal advice. This information does not create an attorney-client relationship between you and the author. This article strictly represents the personal views of the author on the date it was written and such views are subject to change without notice.