Selling out of trust,
Definition of Selling out of trust:
A practice found in the automobile industry where the car sold has been bought through loan but the dealership does not use the sales proceeds to pay back the loan. In most cases, a dealership finances the acquisition of inventory through loan. When the car is sold, the sales proceeds should be used to pay for the loan and the profit for other purposes. In a selling out of trust situation, the dealer does not pay back the amount loaned and the lender cannot seize the car since it has already been sold to a third person.
Normally, if an individual cannot make their car payments, the bank takes back the car. When the owner sells the car out of trust and does not repay the loan, the bank cannot seize the loan collateral (the car).
"Selling out of trust" is an expression commonly used in the automobile industry to refer to the illegal sale of a car that has been paid for with a loan and then not using the sale proceeds to pay back the lender. This practice may be engaged in by car dealerships or individuals facing financial difficulty.
How to use Selling out of trust in a sentence?
- Selling out of Trust (SoT) most often refers to car dealerships that sell a car but don't pass enough of the proceeds of the sale to the lender.
- Selling out of trust may be a criminal offense if a prosecutor can prove intentional fraud was involved.
- Selling out of trust can also leave an auto dealer vulnerable to civil litigation.
Meaning of Selling out of trust & Selling out of trust Definition