Cautionary Tale

[OroroMunroe]

Hello, 

I'm not new to the forum, but I haven't posted in awhile. I thought I would share my car buying experience as a little cautionary tale for future buyers. Here's a little background:

I purchased my first car almost two years ago. I financed it through Ford, and then refinanced it with my credit union. This past week, I received email solicitations and calls from the dealership where I purchased the car. The offers piqued my interest. I visited the dealership without my car (to keep me from making an emotional/impulsive purchase). I loved the newer model vehicles, so I decided to research about the tradein value of my car. All of the appraisals had me upside down by about 1500 dollars. Not bad, I thought. With that in mind, I decided to apply for a few loans to see what I would qualify for. I didn't want to walk into the dealership without my own financing. I apped with Cap1(Auto Navigator), Ford, NFCU, and DCU. I received approvals from Cap1 and DCU, but received a denial from NFCU and a "pending...go to the dealership" from Ford. Excited by the approvals, I searched for the exact car I wanted. When I found what I wanted, I went to the dealership. I negotiated price, tradein, and I told them that I was already preapproved; I only wanted them to run my credit with two places: Ford and Cap1. Due to the late hour, I did not sign the papers that night. I returned the next day, and to my surprise, the dealership ran my credit, and it was not just with the banks I mentioned. I started to receive inquiry notifications on my phone. I ended up with 7 inquiries on EQ and EX, not sure how many on Transunion yet. Of course, the finance person said he wasn't aware of my request to not run my credit so much. Disgusted but trying to make lemons out of lemonade, I proceeded to purchase the car. As the notification alerts continued, I stopped the process, and decided I was not going to buy a car from that dealership. 

Several days later, I decided to go to another dealership with my approvals. I told them that I did not want them to run my credit. They did exactly as I said. After this experience, I've learned more than I would have liked to about car buying. I already know that buying and financing a new car with negative equity is not a good idea, and that buying new, in general, is a bad idea, but I wanted a newer car. I loved my car, but I purchased the base model. It didn't have any extras, and that bothered me every time I made a car payment. What I learned:

• Insist that the salesperson frequently alerts sells managers and the finance people to your request to limit credit apps.
• Ignore email solicitations and calls from dealerships about newer model cars; It's pretty enticing. 
• If you decide to buy (against all better judgment), don't let them run your credit at all if you have a DCU approval. There's no need for them to run your credit.
• Auto purchase agreement math can be pretty confusing when you are trading in a vehicle.
• Be willing to pay a little more for better service. The dealership I left had the better deal, but they were terrible to work with.
• Consider building the car you want. I made so many concessions initially until learned about building a car.

What would you add to this list of car buying do's and don'ts?

[Anonymous]

Good post. Two  things to recall about fiancing through the dealeership. 1) They will let everybody and his brother pull your credit b) They make just as much or more from finance than selling you the car.  Car salesman say  anything to sell car .   My family owned a Ford Dealership for about 50 years. 

[Watchmann]

I'd say you were a dream customer for them.  Your car was only two years old, and you were not really looking to upgrade but you were seduced into visiting the dealer just to 'research' what was available and not to make an emotional/impulsive purchase, which you did a few days later.   So one week you were seemingly happy with your vehicle, the next week you took a $1,500 hit and have a new car.

My cardinal rule is never respond to any ads, flyers or internet emails pitching the idea that they need my car and I should come in just to see the great new models.  Car dealers are far more clever than the public and know how to play on our emotions.  If you don't play the game you are safe.  My don't is......Never visit a dealership unless you have decided you want a new vehicle, never go in just to look at various models and to see what is available.

[OroroMunroe]

Yes, I was enticed by the dark side   I guess at my core, I really wanted an upgrade. Like I said in my post, every time I made a payment, I regretted not buying something fully loaded. In two years or so, I will definitely ignore emails and calls from dealerships. I plan to drive the new car until the wheels fall off. 

[DaveInAZ]

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@OroroMunroe wrote:

Hello, 

I'm not new to the forum, but I haven't posted in awhile. I thought I would share my car buying experience as a little cautionary tale for future buyers. Here's a little background:

What would you add to this list of car buying do's and don'ts?

---

1- Never ever let a car dealer try to arrange financing for you. You did right in pre-arranging your finance options before going to the dealer. Don't ever give them your date of birth & Social Security number, they will lie & BS - "we were just trying to find a better loan for you", which translates to "we were trying to find the best commission for us for a loan that we could sucker you into". 

2- Consider a used rental car from a car rental company. A lot of their cars are only 1 or 2 model years old with 10-20k miles, 30% or more discount from buying new. My last car purchase was from HertzCarSales in 2015, very pleased with everything.

[Anonymous]

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@DaveInAZ wrote:

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@OroroMunroe wrote:

Hello, 

I'm not new to the forum, but I haven't posted in awhile. I thought I would share my car buying experience as a little cautionary tale for future buyers. Here's a little background:

What would you add to this list of car buying do's and don'ts?

---

1- Never ever let a car dealer try to arrange financing for you. You did right in pre-arranging your finance options before going to the dealer. Don't ever give them your date of birth & Social Security number, they will lie & BS - "we were just trying to find a better loan for you", which translates to "we were trying to find the best commission for us for a loan that we could sucker you into". 

2- Consider a used rental car from a car rental company. A lot of their cars are only 1 or 2 model years old with 10-20k miles, 30% or more discount from buying new. My last car purchase was from HertzCarSales in 2015, very pleased with everything.

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Just curious, is your previous rental loaded or pretty sparse with options? I've had 2 rentals in the last couple years and both lacked anything exciting. This experience prevented me from considering them when I bought my car last month. 

[DaveInAZ]

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@Anonymous wrote:

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@DaveInAZ wrote:

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@OroroMunroe wrote:

Hello, 

I'm not new to the forum, but I haven't posted in awhile. I thought I would share my car buying experience as a little cautionary tale for future buyers. Here's a little background:

What would you add to this list of car buying do's and don'ts?

---

1- Never ever let a car dealer try to arrange financing for you. You did right in pre-arranging your finance options before going to the dealer. Don't ever give them your date of birth & Social Security number, they will lie & BS - "we were just trying to find a better loan for you", which translates to "we were trying to find the best commission for us for a loan that we could sucker you into". 

2- Consider a used rental car from a car rental company. A lot of their cars are only 1 or 2 model years old with 10-20k miles, 30% or more discount from buying new. My last car purchase was from HertzCarSales in 2015, very pleased with everything.

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Just curious, is your previous rental loaded or pretty sparse with options? I've had 2 rentals in the last couple years and both lacked anything exciting. This experience prevented me from considering them when I bought my car last month. 

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Well, I bought a pretty basic car, a Mazda 2 hatchback. I live in a rural area and drive alot - while work is a 10 minute commute with not even a stop sign, the nearest full service grocery store is 30 miles away. My Mzda 2 gets just under 40mpg, so it works for me. But Hertz did have the Touring model which is what I bought - cruise control, upgraded interior trim, LCD display.. I got the Mazda for my everyday commute car. But it is getting around time to replace my 17 year old SUV, and browsing their site I see Hertz has some pretty nice SUVs with leather seating, rear camera, bluetooth, etc.

[Gunnar419]

I'm in the market for an inexpensive, but newer model, used Toyota and I plan to follow DaveInAZ's advice to go to Hertz. Even though the nearest Hertz sales lot is three hours away, I'd rather go there than to a regular car dealership.

I'm in no hurry, looking to have a car by the end of summer, but I've been casually keeping my eyes open. Just yesterday I talked with one of the few dealers within an hour of my home. They seemed to have a car I wanted, just a hair over the price I plan to pay. When I emailed them about it, though, my hackles went up right away.

This was supposed to be a legitimate dealer, not some predatory used car lot, but from the first response it was obvious that their number one goal was to GET ME ONTO THAT LOT. They weren't interested in answering my questions about the vehicle. They weren't interested in finding out about what I needed or thought I could afford. As we exchanged several emails, their message was always WHAT WOULD IT TAKE TO GET YOU HERE TODAY?

When I told them that what it would take was beating Hertz prices and terms on the car they had listed, they just dodged around and pretended they were trying to. But while never quoting me a below Hertz price, or any price below the listed one, it was always something like IF YOU'LL COME HERE TODAY,  WE CAN PROBABLY GIVE YOU AN EXTRA $100 OFF.

I also noticed that the listing for that particular car had disappeared off their website and eventually realized they were planning a bait and switch. Get me to their lot for a car they no longer had and "upsell" me to a more expensive vehicle, which I had already told them I didn't want and couldn't afford.

It's been many years since I've bought a car from a dealer. I knew they were all slimy manipulators of course, but that experience left me creeped out and reminded me that us ordinary people are always at a disadvantage when approaching those masters of twisted psychology.

OP, good for you for doing some smart things (going in without your car, lining up your own financing in advance), but yours is definitely a cautionary tale because even somebody who thinks s/he is well prepared can turn out to make serious mistakes in the hands of creepy car dealers.

[jim44]

Caution about buying a used rental vehicle.  Most rentals even with low miles can be run pretty hard.  Also some large rental companies have their own repair shops to fix damaged cars.  This way damage repairs don't show up on Carfax and Autocheck. 

Sometimes dealers can find you a better deal apr wise than you can on your own. They work off a system directly with many different lenders with different lending parameters.  Also some indirect lenders don't permit dealers to "add points" to aprs so your loan may have the same term and APR then some direct lenders.  If you don't finance, there is no need to give a dealer your SS#.  They are required though to have copies of your drivers license for identification purposes. You don't have to give them your email address either. 

I've worked for a dealership for many years... I'm not a salesman but I do see what goes on with sales.  They can be deceptive but it's not fair to put them all in the same "bucket". 

Remember car salemen and dealerships want to make a living just like everyone else.  As a customer, it's important to do your homework.  Remember though, there are two sides to every story and then there is the truth. 

[OroroMunroe]

Hello again, 

So my car buying education continues. I have never purchased a car with credit union financing. This is my first foray with this type of financing. With my last car, the dealership worked out financing, and others I know who have purchased cars have done the same. Yesterday, I received a call from the salesperson saying that my car was ready for pickup. I went to the dealership fully ready to leave my tradein and drive off with my new car. What I learned was that I could not take possession of the car without the check from my credit union. In retrospect, that makes perfect sense, but I thought, based on what I knew about financing a car (mostly from others' experiences) that you drive the car off the lot, most times, even when financing has not been fully secured. Most dealerships are eager for you to take possession of the car. I'm now wondering what else is in store for me. It almost feels like the universe is trying to tell me to not purchase the car 

Veteran car buyers, what's the standard practice with credit union financing? Do you always have to present the check before you leave the lot with the car?