Arizona's Attorney General has issued a warning to consumers who lease their cars or have loans on their cars. These people are becoming victimized by rescue schemes that promise the vehicle owners a means of removing themselves from loan or lease payments without dealership or lender penalties. These schemes do not work, and can cause the car owners significant financial harm.
The scheme works like this: A company will find people who need or want to get out of their monthly loan or lease payments. The company promises that they will find someone to take possession of the owner’s vehicle and assume the monthly loan or lease payments, with no costs to the original owner. The company claims that the person who takes over the loan or lease will pay any maintenance and repair costs, and pay for full insurance coverage for the vehicle. The company guarantees it will pick up the tab, at no cost to the owner, if the subsequent person defaults on the loan or lease. Unfortunately, experience has shown that when there is a default on the monthly payments these companies frequently fail to live up their promises.
If that person who took over your lease or loan defaults or damages the vehicle, the person who originally arranged for that loan or lease is responsible for it. That means that you could be have to make back payments, pay for unpaid insurance premiums, pay for car repairs, and damage your credit in the process.
According to the Attorney General, "vehicle sublease rescue companies are proliferating throughout Arizona and preying on consumers who have difficulty making their car payments. Consumers should be careful. Read the terms and conditions of the vehicle loan or lease agreement carefully. Most lenders’ financial agreements will expressly prohibit the sublease or transfer of any interest in the vehicle to a third party."
