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A lender cannot make an extended warranty a stipulation for approval of a loan. Period. If the dealer continues to say it is a "must" then tell him it is a deal if he reduces the selling price by the same amount. The dealer gets a commission from selling the extended warranty, they are also getting a kick-back for arranging the financing. You should evaluate your credit history and determine if you would qualify for more amicable terms from your local bank or credit union. With a 685 FICO and close to 50% down you should have a much better rate in my opinion.
As far as the numbers you have provided.... +$1,000 trade and +$6,000 cash down
$188/mo for 72 mo @ 10.29 = financing an amount of $10,068.
No idea what your state sales/excise taxes are, but if there are no additional doc or registration fees it works out to 5%.
My long winded advice ends up with my suggestion to walk .... no, run away from this place.
ty
I suppose it is "possible" that if your loan is borderline, that the lender wants the loan protected with not only insurance, but some type of warranty on the vehicle to protect from large repairs.
It is a known fact that when a used vehicle has break downs or major repairs, there is a higher default associated with those autos.
But, they cannot force you to buy an extended warranty if you don't want one. But the lender can insist that they will only loan money on a vehicle with a minimum length warranty. If the original manufacturer warranty does not cover this, then possibly the only way to meet the lenders criteria would be the addition of an extended warranty.
If you have a fixed budget, part of your purchase decision should be the service record, the manufacturer warranty, the reputation of the make/model for longetivity, etc. The last thing you want is to buy into a continual repair project on top of a loan payment.
You do not have to buy any extended warranty as a condition of purchase. The bank may make a final decision on lending to you, based upon whether or not you elected to purchase the extended warranty. Call the bank and see if in fact the seller is telling the truth. There are other ways around this.
1) Pay Cash
2) Get pre-approved loan before going car shopping.
3)Don't buy the car
Borrowing money is not a right, it's a contractual agreement based on your financial situation and the risk the lender is willing to take.
A dealer can not make you take a warranty.
A lender CAN make that a stipulation on a car purchase. It is not uncommon for (especially on a used car and/or a borderline credit/income profile) for a lender to be more willing to lend if there is gap coverage as well as a warranty that lasts as long as the financing (or close to it). This seems to be more in the case where the bank's initial though is to deny the loan but the loan officer gives them the added assurance that the warranty/gap will be purchased.
Again, this also only usually happens on files that the bank's initial reaction to is to decline the loan but the LO talks them into it.
I don't know if the dealer is a scam or not...Check the local BBB. As far as the listening part, who knows. It is unlikely that happened, but it may have. They really get nothing out of doing that except possible lawsuits. In the end you will take the deal they offer you or you will not take it so why take the chance by listening in.
You have a lower credit score.
You are disabled so you cannot work/supplement your income.
You have an income of 2,400 a month that really is not going to increase much over the years. Will there be COL increases? If not you are looking at declining real income every year.
I actually can see a lender saying they only want to do business with you with a warranty as stipped- as how are you going to pay for car repairs?
Is it a manufacturer warranty or some shady fly by night warranty?
The intercom thing? I have no idea. You could have unplugged the phone. Unless it is a restroom, or youhave specific state laws, you have no expectation of privacy.
If you do not like the dealer why would you still do business with him?
ty, but no opinions.