You should have sued them when you first found out about the damage they purposefully did not disclose. What state are you in and just how long ago did you buy the car?

It is a real bad situation but not that uncommon. Used cars generate plenty of transactions that people wish they could get out of. The used car industry has fine tuned its operations over the years to protect the dealers from unhappy consumers.

It's always necessary to have a professional you are paying inspect a used car before you buy it. Chances are a certified mechanic would have detected some of these problems and recommended you pass on this purchase.

The dealer is not legally responsible to you for things they did not do to the car. The dealer does not inherit the history of the car. You assume because the car was a lemon the dealer knew and that makes them liable. You are wrong and you will likely lose your lawsuit and be sued for damages.

There is a lot of case history about used car sales. Invest in some research before you make yet another costly mistake. Remember all the laws to protect consumers are dealing with new cars, used cars is a different issue all together.

The money owed on the car is the money of a third party, given to the dealer on your behalf as a loan. It does not matter to the lender what happened with the car whatsoever, you still owe the money.

I agree with IMHO that you let this go on too long. This time gone by will only serve to worsen your position.

I think you should hire an attorney and try to negotiate with the bank and dealer to settle this matter as soon as possible.