If you're paying a car dealership for your car loan, you purchased from a buy-here, pay-here lot. Otherwise, you would pay a bank or credit union for monthly payments and late charges. If the dealer says that you still owe money for late charges, either you haven't finished paying for your vehicle or the charges are incorrect and you need to dispute them.
Contract Agreement
Read your purchase contract thoroughly. The terms of your vehicle loan are stated in your contract, including your monthly payment amount, grace period for late payments and the cost of late charges. The amount the vehicle originally cost is likely different from the amount you'll pay back over the term of your loan because of your loan's interest rate. When you signed your original contract, you agreed to any late charges stated in the contract. You must pay the late fees to complete your loan payment.
Proving Payment
If you don't believe that you owe late charges to the dealership, dispute the charges with the dealer manager. Talk to the dealer to find out which dates it believes you paid your payments late. Go through your records to prove the dealer wrong. Gather your receipts or a bank statement that documents the dates of payments. Provide the dealer with copies of your records to prove your payments were paid on time. Many banks store copies of deposited checks, so talk to your bank to obtain proof of payment.
Unfair Charges
If you determine that the late charges are incorrect but the dealer still demands payment, let the dealer know you plan to complain to the proper state agency. Call your state motor vehicle department to determine where to file your complaint. Once you file the complaint, the state agency will initiate an investigation to determine whether the dealer is overcharging you for the vehicle or if you must pay the amount due. Dealers usually keep detailed records for each buyer, so make sure you have your own payment receipts as well.
Considerations
If you plan to trade your vehicle to another dealer toward a purchase or sell the car privately, you can't do so until you have the vehicle's title. If you trade to a dealer, the dealer must contact the dealer to where you owe payment to obtain your balance and then pay the dealer directly. If your late charges aren't significant, you may want to pay your late fees to obtain the vehicle's title. You can still initiate an investigation with the proper state department. If the dealer overcharged you, your payment will be returned.
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