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Loan Payments Significantly Exceed Payments Promised at Time of Sale

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  • 12-21-2017, 12:55 PM
    eaton and sons asphalt
    Loan Payments Significantly Exceed Payments Promised at Time of Sale
    My question involves a consumer law issue in the State of: michigan

    we bought a farm and it needed a big lawn mower...i went to the local lawn and garden supply. been going their for 30 years.. on the floor they had what i wanted...it was $5900.00 0%interest and $156.93 a month so i told them thats what i wanted...the owner got the credit app,he filled it out and sent it in. took about 10 mins to get an answer...it was approved, he told me to get my trailer and it would be ready in an hour....so thats what i did...at this point i had not signed anything....got the trailer and went back....he showed me how to operate it and they loaded it and strapped it down...the owner told me that i would get paperwork in about a week from the credit union....off i went....it took a month for the paperwork...to my surprise it was for a commerical loan, and not a credit union....payment was 429.00 a month at 18% interest...i went back to the lawn and garden and told them this would not cut it...(i have not signed any paperwork at this point) he said don't worry he would fix the issue.... i have been in their twice the last 5 months and the issue is not resolved....its a commerical lawn mower and he says it has to be a commerical loan....so i take the mower back and he wants 2500.00 becaused now its used....i bring the mower home and to this day i still have it....they have called me twice wanting me to sign the paperwork and i tell them to make the payment and itnerest the way its supposed to be and i will and will make all the payments...stuck here and need a little advice.....thanks in advance...
  • 12-21-2017, 01:00 PM
    llworking
    Re: Zero Turn Lawnmower Issue
    Quote:

    Quoting eaton and sons asphalt
    View Post
    My question involves a consumer law issue in the State of: michigan

    we bought a farm and it needed a big lawn mower...i went to the local lawn and garden supply. been going their for 30 years.. on the floor they had what i wanted...it was $5900.00 0%interest and $156.93 a month so i told them thats what i wanted...the owner got the credit app,he filled it out and sent it in. took about 10 mins to get an answer...it was approved, he told me to get my trailer and it would be ready in an hour....so thats what i did...at this point i had not signed anything....got the trailer and went back....he showed me how to operate it and they loaded it and strapped it down...the owner told me that i would get paperwork in about a week from the credit union....off i went....it took a month for the paperwork...to my surprise it was for a commerical loan, and not a credit union....payment was 429.00 a month at 18% interest...i went back to the lawn and garden and told them this would not cut it...(i have not signed any paperwork at this point) he said don't worry he would fix the issue.... i have been in their twice the last 5 months and the issue is not resolved....its a commerical lawn mower and he says it has to be a commerical loan....so i take the mower back and he wants 2500.00 becaused now its used....i bring the mower home and to this day i still have it....they have called me twice wanting me to sign the paperwork and i tell them to make the payment and itnerest the way its supposed to be and i will and will make all the payments...stuck here and need a little advice.....thanks in advance...

    You have never signed ANY paperwork at all? They let you take it home with no paperwork signed and wouldn't let you return it without paying them money? Its absolutely bizarre that they have let this go on this long...even if that meant that they had to finance the mower themselves (they be the bank ). Its bizarre because neither of you can enforce anything because nothing was put in writing.
  • 12-21-2017, 04:46 PM
    Mr. Knowitall
    Re: Loan Payments Significantly Exceed Payments Promised at Time of Sale
    Quote:

    Quoting eaton and sons asphalt
    View Post
    so thats what i did...at this point i had not signed anything....got the trailer and went back....he showed me how to operate it and they loaded it and strapped it down

    It's difficult to tell at this juncture whether you purchased the mower and had only the issue of the bank loan to deal with, or if the sale was contingent upon approval of the loan. If in fact you didn't sign anything, that leaves the waters muddy -- because you can buy something on a promise to pay later.
    Quote:

    Quoting eaton and sons asphalt
    payment was 429.00 a month at 18% interest...i went back to the lawn and garden and told them this would not cut it...(i have not signed any paperwork at this point) he said don't worry he would fix the issue....

    Even at 18% that would result in repayment in <18 months, which seems oddly short-term for financing. The %0 loan would have been @40 months.

    You can also look for credit on your own. You don't have to rely on the seller; but no independent lender is going to give you a 0% loan.

    Did the supply store not apply for the zero percent loan, or is it that you didn't qualify for the financing for some reason? (If the latter, what was the reason?)
    Quote:

    Quoting eaton and sons asphalt
    so i take the mower back and he wants 2500.00 becaused now its used

    It is used. Depending upon how much you used it, and its present condition, the proposed $2,500 payment may be reasonable or it may be insufficient -- that's not something we can assess for you.
  • 12-21-2017, 04:55 PM
    llworking
    Re: Loan Payments Significantly Exceed Payments Promised at Time of Sale
    Quote:

    Quoting Mr. Knowitall
    View Post
    It's difficult to tell at this juncture whether you purchased the mower and had only the issue of the bank loan to deal with, or if the sale was contingent upon approval of the loan. If in fact you didn't sign anything, that leaves the waters muddy -- because you can buy something on a promise to pay later.

    Even at 18% that would result in repayment in <18 months, which seems oddly short-term for financing. The %0 loan would have been @40 months.

    You can also look for credit on your own. You don't have to rely on the seller; but no independent lender is going to give you a 0% loan.

    Did the supply store not apply for the zero percent loan, or is it that you didn't qualify for the financing for some reason? (If the latter, what was the reason?)

    It is used. Depending upon how much you used it, and its present condition, the proposed $2,500 payment may be reasonable or it may be insufficient -- that's not something we can assess for you.

    Based on normal type depreciation for that kind of equipment the proposed $2500.00 is likely NOT reasonable. That is a 42% depreciation rate in just 5 months.
  • 12-21-2017, 05:00 PM
    Mr. Knowitall
    Re: Loan Payments Significantly Exceed Payments Promised at Time of Sale
    Quote:

    Quoting llworking
    View Post
    Based on normal type depreciation for that kind of equipment the proposed $2500.00 is likely NOT reasonable. That is a 42% depreciation rate in just 5 months.

    Unless and until you lay eyes on the mower, there's no way to know what it might sell for in its present condition. It is possible, of course, to look for mowers of the same make and model, and of similar age and in similar condition / hours of use, on the secondary market to see what price other sellers are seeking.
  • 12-21-2017, 05:22 PM
    llworking
    Re: Loan Payments Significantly Exceed Payments Promised at Time of Sale
    Quote:

    Quoting Mr. Knowitall
    View Post
    Unless and until you lay eyes on the mower, there's no way to know what it might sell for in its present condition. It is possible, of course, to look for mowers of the same make and model, and of similar age and in similar condition / hours of use, on the secondary market to see what price other sellers are seeking.

    Of course no one can know for sure, but the reality of things is that even a mower that was serious used would be highly unlikely to depreciate 42% in fair market value in 5 months.

    Its also nearly absurd that a retailer, with no signed documents at all would allow the situation to go on for even 5 months, let alone the longer distance it has gone.
  • 12-23-2017, 07:31 PM
    eaton and sons asphalt
    Re: Loan Payments Significantly Exceed Payments Promised at Time of Sale
    the mower is still like new...only have 25 hrs on it

    nothing signed....they wont let me pay them i tried.....

    never signed anything

    i bought a kubota u35-4 excavator at 0% interest back in may....i took delivery of the machine and had not signed anything except the loan app....it took a couple weeks for them to get the paperwork to me...but i did put down 10 grand... so with the mower i did not think anything of it......i believe (and this is just my thoughts) that the lawn and garden place was paid for the mower by the first guy that approved the loan.... the loan company has tried to get me to accept their terms a few times....at the time of the loan fico score was 744
  • 12-23-2017, 08:22 PM
    Taxing Matters
    Re: Zero Turn Lawnmower Issue
    Quote:

    Quoting llworking
    View Post
    Its bizarre because neither of you can enforce anything because nothing was put in writing.

    That's not correct. The lack of a writing does not make the contract unenforceable in this instance. It is true that under UCC § 2-201, which has been adopted in every state but Louisiana, the general rule is that contracts for the sales of goods in excess of $500 (some states have raised that amount to something higher) are not enforceable unless the contract is in writing and signed by the party against whom enforcement is sought. But there are several exceptions to that rule; as it applies to this situation no writing is required “with respect to goods for which payment has been made and accepted or which have been received and accepted.” UCC § 2-201(3)(c). You’ll find this rule in Michigan law at Michigan Compiled Laws (MCL) § 440.2201. In short, performance of the contract by one of parties takes it out of the statute of frauds and no writing is needed to enforce it. Here, the lawn mower was received and accepted by the buyer on the day of the sale. That meets the exception and takes it out of the statute of frauds. So the seller might indeed enforce the contract against the OP without the need for a writing. The issue for the court would be sorting out what the actual terms of the sale were.

    I submit that the basic terms of the deal was a sale of the mower for $5,900. The OP was supposed to get financing, but as the dealer was not the one granting the credit they had to rely on approval from a third party lender for that. It is not clear, as Mr. Knowitall points out, whether the sale itself was contingent on getting that financing. Unless the OP can convince the court that it was, he may be stuck with the lawn mower and owing the seller $5,900 for it. He might want to find alternative financing to pay for it, hopefully he can get a personal loan or some other loan to pay for it that will be less than 18% interest.
  • 12-23-2017, 08:57 PM
    bcr229
    Re: Loan Payments Significantly Exceed Payments Promised at Time of Sale
    Quote:

    Quoting eaton and sons asphalt
    View Post
    they wont let me pay them i tried.....

    You went back to the seller with $5900 and they turned you away?
  • 12-23-2017, 11:34 PM
    eaton and sons asphalt
    Re: Loan Payments Significantly Exceed Payments Promised at Time of Sale
    no not 5900...i took in three months payment at 156 per month...would not take it....his words were (he would not except 156 per month)

    they also sell snowplows, a buddy of mine bought a snowplow from them and he went thru the same thing...but he pays it.

    i got the approval while i was standing on the showroom floor....they got me the financing. but the financing terms was not what we agreed on.
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