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Tiffany Searight thought she was doing something special by driving more than six hours to lock in a car for her son's graduation gift. Instead, the single mother from upstate New York says she ended up spending $3,300 out of pocket, with no car in the driveway and a loan she's expected to pay.
After placing a deposit at Regal Autohaus (1), she left without the vehicle, expecting to return and pick it up. That never happened but what did show up, she says, were financing charges from Westlake Financial (2).
"I work two jobs," Searight told CBS New York (3). "I'm a recently divorced mother. Single parent. Just got my oldest son through college."
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In the weeks that followed, Searight says she stayed in contact with the salesman, but kept getting different reasons the car wasn't ready, from an oil change to a weak pulley. She made another trip to the dealership on January 12, but says the car wasn't there when she arrived.
Frustrated, she called the police. According to the report, Searight was told the vehicle needed maintenance and that she would be contacted once it was ready. But the updates never came.
By February, payments tied to financing through Westlake Financial had begun, and by March, there was no refund or clear path forward.
While Searight's situation is uncommon, it comes as federal regulators step up oversight of auto sales. In March, the Federal Trade Commission (4) warned dozens of dealership groups over deceptive pricing, including ads for unavailable vehicles, adding it will continue taking action to protect consumers.
Searight has worked hard to maintain her credit but when a loan is in your name, missed payments can quickly drag it down. Emails reviewed show Westlake Financial told her the account had been flagged for a "fraud review," but the loan would stay open until the dealership returned the finance charges.
"I'm stressed because I work very hard to keep my credit where it is, and not only that, I have people harassing me and holding me responsible for a loan on a vehicle that I don't have," she said.
Payment history is the biggest factor in your credit score, and according to FICO data (5), even a single 30-day missed payment can knock a fair score down by roughly 17 to 37 points, or as much as 63 to 83 points (6) for someone with excellent credit. The damage can climb past 100 points, meaning the higher your score, the harder the hit.
A drop like that can make it more expensive (7) to borrow, rent an apartment or even set up basic services and the effects can linger on your credit report for years.
For Searight, the impact wasn't just financial. She says the experience took an emotional toll. "I never had my son hug me so tight, when we left that dealership, be so happy," she added.
In a statement to CBS New York, Regal Autohaus said Searight "chose to abandon the transaction," adding that her loan application had been cancelled and her $3,300 refund was being processed. The dealership declined to comment further on camera. But she had already been asking for her money back weeks earlier, including a request to cancel the loan. It wasn't until investigative reporter Mahsa Saeidi accompanied Searight back to the dealership that things appeared to move. After the visit, she says the dealership provided a shipping label and told her a $3,300 refund had been sent via FedEx, along with $400 to cover travel costs. Weeks later, the check cleared.
"It's off of both of our credit reports," she said. "My son was finally able to get a car."
The New York State Department of Motor Vehicles confirmed to Moneywise there is an open investigation into the dealership but declined to comment further. Westlake Financial also declined Moneywise's request for comment on the situation.
There are steps you can take to protect yourself if you're billed for a purchase that falls through. Start by contacting the lender. If a loan has been opened in your name, ask whether it's active, whether any money was actually sent out, and what needs to happen to cancel it. Also, be sure to put everything in writing (8). Emails give you a record of what you asked for and when, which can matter if things drag on or need to be disputed.
If payments start appearing on your credit report, you can dispute the account with the credit bureaus to flag it while things get sorted out. You can also take it a step further by filing a complaint with your state regulator or, in some cases, with the FDIC Division of Depositor and Consumer Protection (9) if a bank is involved.
When a deal falls through but the loan doesn't, you can be left on the hook, so acting quickly and getting clarity from the lender is key to protecting your credit and limiting the damage.
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Regal Autohaus (1); Westlake Financial (2); CBS News (3); Federal Trade Commission (4),(8); myFICO (5); CNBC (6); Equifax (7); FDIC (9)
This article originally appeared on Moneywise.com under the title: 'I'm not paying for a loan on a car that I don't have': How a mom's gift for her son turned into a credit nightmare
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.