Cassels Garage has had the privilege of serving the people of Melbourne, Palm Bay, and Indialantic since 1966 with our auto repair and maintenance services. Over the 50+ years that we’ve been in business, we have seen certain trends and changes in the automotive industry. Some changes have been great, while others have been concerning.
One such trend in the auto buying industry called “kicking the trade” has come under scrutiny lately. A recent Wall Street Journal article titled “Dealerships Give Car Buyers Some Advice: Just Stop Paying Your Loan” explains what this underhanded practice is all about. Long story short, “kicking the trade” is when car dealers advise buyers (usually people looking to trade in their current vehicles) to let their auto loan lenders repossess their vehicles. Then the car dealers turn around and sell that buyer a new car.
One Woman’s Experience with “Kicking the Trade”
The article goes on to describe an incident where this happened. A woman named Joyce Parks went to the dealership where she purchased her Kia Soul because she was having trouble making her car payments. Instead of allowing Ms. Parks to trade in her vehicle for a more affordable one, the dealer suggested she stop making payments on her Kia Soul and buy another car. Unfortunately, Ms. Parks took the suggestion and purchased a Nissan Rogue from the dealer, allowing the lender to repossess her Kia Soul. After only a few months she couldn’t make payments on the Rouge either, and since she still owed $15,000 on both her Soul and the Rouge, “kicking the trade” actually added to her debt and caused her credit score to plummet.
Unwise Auto Loans Can Lead to a Vicious Cycle of Debt
This story might sound like an anomaly, but it happens more than you might think. About 1/5 of people who had a car repossessed over the past several years took out a second auto loan within a year, according to TransUnion. What’s more, the percentage of vehicle loans in the US where the vehicle was repossessed within a year was up 17% from 2014 when compared to 2018. Coincidence? We think not.
This practice sounds shady because it is. Lenders aren’t often aware that “kicking the trade” is happening, and many auto loan lenders claim they would cut ties with dealers who engage in this practice. This is just one of the many ways some car dealers trap buyers in a vicious cycle of debt.
Knowledge is Power in the Automotive Industry
While there are plenty of reputable car dealers that don’t condone “kicking the trade,” there are plenty who do. That’s why we at Cassels Garage try to educate our customers and readers in all things automotive. We don’t want anyone to fall victim to bad advice or take out a loan they cannot afford. Knowledge is power, and it’s always wise to do plenty of research before buying, selling, or trading in a vehicle.
We pride ourselves on maintaining a reputation of honesty and integrity. Our team of auto mechanics will provide the best services at fair prices, and we promise to be transparent with our customers. We will never suggest a repair or service that’s unnecessary, and our work is of the highest quality. If you’re searching for a reliable auto mechanic in the Melbourne, FL area, schedule an appointment at Cassels Garage today.
