topic Re: How does this happen... in Auto Loans

How does this happen...

2FixMyCredit — Tue, 16 Apr 2013 09:18:40 GMT

I went with my brother the other day because he is wanting to get a different car than his gas guzzler. The car he was eyeing was 13k, 2008 honda civic

The salesman came back and had an outline that basically said he would be 550 a month for 6 years that is with 3000 down and 2800 trade in value. And that was their best offer. They would no disclose the interest rate to him and kept trying to get him to sign the paper. (had I not been there he would have just done it)

I did the math with them sitting there and said that would be nearly a 40,000 loan for that car!! It wasn't a buy here pay here place either, it was a supposed reputable car lot.

I'm just thankful I was there, for the folks on here and for guides online showing what you should and shouldn't do at a dealership. I have convinced him to work on improving his credit that way he can get the brand new camaro he wants in a year or so instead of a used vehicle

Re: How does this happen...

ds3 — Tue, 16 Apr 2013 14:23:12 GMT

It happens because people let it happen. Car salesmen are trained to separate people from their money, and generally have no conscience whatsoever about doing so. It never ceases to amaze me how people negotiate payments instead of the price of the car.

Your brother is lucky you were there. Make sure he reads up on car buying before he tries it again. There are a ton of great articles online that explain how to buy a car based on knowledge vs emotion.

Re: How does this happen...

sccredit — Tue, 16 Apr 2013 16:16:15 GMT

What are his scores? I would bet the interest rate is 20%, the price is higher and they are adding a bunch of stuff on to it

Re: How does this happen...

Anonymous — Tue, 16 Apr 2013 20:52:57 GMT

That is like a 65% APR. Numbers don't add up. Have him find a good deal on a car and go in with his own financing.

Re: How does this happen...

Mike360 — Wed, 17 Apr 2013 01:12:46 GMT

Your brother is very lucky to have you there to lead him in the right direction. The only thing i can advise if they won't disclose the APR is to walk away. I had a Toyota place try that same BS tactic years ago and the sales lady told me she only sells the car and would have to discuss the rates when i go sign paperwork. I took that as a sign to walk away right then and there.

I just bought a Sonata in Janaury and made them show me my rates. They were able to pre-approve me for the best rates at the time hyundai had to offer because i came in prepared with my EQ Fico score and a current copy of my credit report. They actually came in after pulling my credit and telling me they pulled all 3 CB and use the middle score and showed me the beacon score that they used for approval.

Re: How does this happen...

p- — Wed, 17 Apr 2013 23:29:03 GMT

@2FixMyCredit wrote:
I went with my brother the other day because he is wanting to get a different car than his gas guzzler. The car he was eyeing was 13k, 2008 honda civic

The salesman came back and had an outline that basically said he would be 550 a month for 6 years that is with 3000 down and 2800 trade in value. And that was their best offer. They would no disclose the interest rate to him and kept trying to get him to sign the paper. (had I not been there he would have just done it)

I did the math with them sitting there and said that would be nearly a 40,000 loan for that car!! It wasn't a buy here pay here place either, it was a supposed reputable car lot.

I'm just thankful I was there, for the folks on here and for guides online showing what you should and shouldn't do at a dealership. I have convinced him to work on improving his credit that way he can get the brand new camaro he wants in a year or so instead of a used vehicle

Wow, that's way shady. I learned my lesson too, and my last few car purchases have been financed before I walked in the door. I recommend Penfed if you qualify, nobody is cheaper.

Re: How does this happen...

Anonymous — Thu, 18 Apr 2013 04:43:26 GMT

They could have tacked on bank fee's.. Often dealers advertise cash prices so the financing price is different because some sub prime banks charge the dealers fee's for taking these loans. Any where from a few hundred dollars to thousands of dollars.

Re: How does this happen...

p- — Thu, 18 Apr 2013 16:31:22 GMT

If you amortize it out with no fees, it's a 90% APR loan. If you calc it at a 19% rate, the starting principal is 20 grand. A screw job for sure.

Re: How does this happen...

2FixMyCredit — Thu, 18 Apr 2013 22:55:39 GMT

His scores aren't high around 614 FICO EQ, he does have some baddies as well but he has a solid history of car payments. Unfortunately he doesn't want to put any money into fixing his credit which makes no sense to me. He just keeps saying it will all fall off eventually. (stubborn!!)

I just can't believe how shady they were, I left a negative review on their google page and they had it deleted some how. They were also trying to charge him $299 for window tint the car didn't have and $60 for a pin stripe the car didn't have.

He is very intent on getting a honda, why I don't know he says he likes the body style but I have a Mazda hook up that can get him a 2014 for about 4k under kbb and he isn't biting, again hes stubborn lol. Anyways I just thought they were really unproffesional and rude about it all. My brother works in the automotive field and on the way back from the dealership he kept saying the car had to of been in flood waters because the trunk and jack were rusted.

Re: How does this happen...

Anonymous — Fri, 19 Apr 2013 04:13:17 GMT

@p- wrote:
If you amortize it out with no fees, it's a 90% APR loan. If you calc it at a 19% rate, the starting principal is 20 grand. A screw job for sure.

I got 65% with tax, title, lic...

Re: How does this happen...

Anonymous — Fri, 19 Apr 2013 04:17:14 GMT

@2FixMyCredit wrote:
His scores aren't high around 614 FICO EQ, he does have some baddies as well but he has a solid history of car payments. Unfortunately he doesn't want to put any money into fixing his credit which makes no sense to me. He just keeps saying it will all fall off eventually. (stubborn!!)

I just can't believe how shady they were, I left a negative review on their google page and they had it deleted some how. They were also trying to charge him $299 for window tint the car didn't have and $60 for a pin stripe the car didn't have.

He is very intent on getting a honda, why I don't know he says he likes the body style but I have a Mazda hook up that can get him a 2014 for about 4k under kbb and he isn't biting, again hes stubborn lol. Anyways I just thought they were really unproffesional and rude about it all. My brother works in the automotive field and on the way back from the dealership he kept saying the car had to of been in flood waters because the trunk and jack were rusted.

Sounds like he needs to find a different Honda dealer. Before going in, he should get in touch with the internet sales manager. Get some quotes before hand and put some money down on the car. 614 can still land a halfway fair deal.

Re: How does this happen...

fishbjc — Tue, 23 Apr 2013 17:12:42 GMT

DH bought a pre-owned ford escape for $18ish, they matched NFCU rate of 3.9 with no money down. Scores of 650ish. No mortgage payment and low debt to income.

Re: How does this happen...

Anonymous — Wed, 24 Apr 2013 12:50:31 GMT

Was the price of the car 13K before the down payment and trade in? Becuase if it was before that would make it $7.2K car financed for 6 years @ 550 a month?! My math may be off, but I got 90% APR. Good thing you were there to stop it.

Re: How does this happen...

sccredit — Wed, 24 Apr 2013 21:20:34 GMT

I bet there is a $2k-$3k warranty and GAP insurance in those numbers. Otherwise, it is ridiculous.

Re: How does this happen...

Anonymous — Wed, 24 Apr 2013 21:34:47 GMT

@sccredit wrote:
I bet there is a $2k-$3k warranty and GAP insurance in those numbers. Otherwise, it is ridiculous.

Some $1k doc fee's, and anything else the dealer could think of. Then it would only be like a 40% interest rate...what a deal