topic Re: I was "approved" and now I'm probably having to return the car? in Auto Loans

I was "approved" and now I'm probably having to return the car?

Anonymous — Wed, 19 Nov 2008 02:04:47 GMT

I bought a car on Sunday at a dealership. The credit score they had on me was 20 points higher than what I pulled a few days before myself, so I was quite pleased. They got everything done and sent me on my way. On Monday I got a call telling me I had to have proof of income, so they wanted my manager to write a letter saying how much on average I make in tips. No problem. Then they called back and said, no, the bank won't accept tips as income. This makes my debt to income ratio too high to get approved. This is super frustrating because I am a full time student in college and a part time employee, and I receive child support. My financial aid (not loans, GRANTS) covers my housing, etc, but the bank won't take my rent costs out of the equation, so that is what is making my debt-to-income look high.

It looks like I'll be returning the car because I'm not going to falsify anything saying I make more than I do. How am I going to get a car anywhere? Will ANYONE finance based off of hourly plus tips? Even with a higher rate perhaps? I'm not trying to buy a new or extravagant car, I just need one that will get me to school (100 mile round trip commute 4 days a week) and work, and be safe for my son and me. Anyone have ideas of a lender that will work with this?

Re: I was "approved" and now I'm probably having to return the car?

Anonymous — Wed, 19 Nov 2008 11:17:41 GMT

Your first mistake was purchasing on a weekend, never buy auto's on the weekend because the banks are not open and stealerships don't finance... banks do! How long have you been on your current job? If you have been at current job a year or better and can show w-2 with your income being consistant you may be able to talk to a loan officer at a credit union. They may also work with you on the housing thats included in your financial aid.

Re: I was "approved" and now I'm probably having to return the car?

alxtan — Thu, 20 Nov 2008 00:05:17 GMT

I am speaking from experience when I say this. Never take a car home from the dealership unless you are 100% sure that you are approved for a loan. This is a classic dealer scam. Next time tell the dealer to give you a call when they are sure you are approved instead of letting you drive the car home.

Anyway regarding you situation. Maybe you can try an auto broker. You can find them in you local yellow pages. They should be able to help you find a car and loan.

Sorry to hear about your problem I hope I helped in some way.

Good luck!

Re: I was "approved" and now I'm probably having to return the car?

Anonymous — Thu, 20 Nov 2008 01:04:43 GMT

+1 to the above as far as not taking a car off the lot.

As far as the income goes, I am assuming that you do not cliam it on taxes. If so, you cna not have your cake and eat it to. If you do not claim it then it is not income. In this present credit climate all income has to be fully documented and most places are not even considering a letter from employer as they are too easy to fake.

If you do not have ot write a rent check then they should not be counting your rent against you. That said, DTI does not usually count rent, only credit obligations. If you have paperwork to support the grant monies and the rent payments then they should be able to overlook your rent, but if your DTI is too high, that is the problem, not rent. How much do you bring home per month and how much was the car payment to be?

Re: I was "approved" and now I'm probably having to return the car?

Anonymous — Thu, 20 Nov 2008 15:21:24 GMT

Thank you all for your input!

As far as tips go: I totally understand if they don't want to accept tips as income, I was just frustrated because I was honest that that was where most of my money came from, so if it was a problem the finance guy should have told me then. I will be claiming my tips on my taxes, and my manager showed me a few days ago how to input it in the computer each night when I clock out (in order to be taxed) so that's all taken care of for future purposes.

First off, I made a decision on Tuesday evening that I wasn't going to keep the car because I am really uncomfortable with the way the process was handled, and was now being asked to do something dishonest by the finance guy (and this is at a well-known, good-rep dealership). I got a recommendation from someone I really trust to go to a used car dealership near my home that has a wonderful reputation and has been in business for many many many years. I went in first thing yesterday morning and told them everything. So get this: the original dealership told me that only the one place (Americredit) would finance me, and only if I showed documentation of the LIES the finance guy made up. I asked him if there was anyone else and he said no. Well, the dealership yesterday pulled my report and saw that 1st finance guy HAD shopped me to another bank, so he called the bank...and I had been approved. No docs, same interest rate as Americredit. So I had clearly been lied to. The bank gave me a pre-approval and I went to look at cars on the lot, and fell in love with one. It is $1,000 less than the one from the first dealership. The finance guy didnt' make me sign any papers except an approval to run credit, and I headed out to school while he contacted the bank for final approval based on the car I liked. He called me less than an hour later saying it was done, all the bank wants are 2 references and they will fund. He stated in our meeting that they NEVER let anyone take a car until financing is 100% in place. He told me to come back the next morning (which is today, in an hour!) and sign and get my car!!!!

So last night after school I drove to the first dealership, a male friend met me there, and I went in and said "thanks for trying, but as you were not able to get the interest rate I signed for, I am returning the vehicle." They tried to get me to "come in back" to their office but I refused, because I was told that they would do that and try to do anything to make the deal work...but I don't WANT to work with unethical, dishonest people. I told them to shred my downpayment check (because they said I had to come in back to get it), and I had placed a stop payment on it that afternoon so I should be covered.

I'm still nervous that something will go wrong today, but at least I no longer have possession of a car that isn't officially mine. I sure learned some lessons from the situation.

Sorry this was so long!

Re: I was "approved" and now I'm probably having to return the car?

pacattack81 — Sun, 30 Nov 2008 09:34:16 GMT

let me see if i have this right..so the 1st dealership got you approved through a bank at whatever interest rate they said...had you sign for the loan, car and drive away with it?...the dealership must have been desperate if they let u drive the car away without being 100% sure about getting u financed

Re: I was "approved" and now I'm probably having to return the car?

Anonymous — Mon, 01 Dec 2008 00:08:20 GMT

Unfortunately this is not that unheard of. They send you on with the car and then come back and say that they can only finance you at xx % raising your payments by a large amount. Unfortunately, alot of the finance officers are really behind and are sending people out with cars expecting to be able to obtain the financing that 6 months ago would have been no problem but no is alot harder to find (particularly with low down, bad credit, or negative equity loans) It is that same thing that mortgage loan officers were doing this summer/fall. They were pre-approving people based more on what they could have gotten away with 12 motnhs prior than what an underwriter would really approve in the current market.

Re: I was "approved" and now I'm probably having to return the car?

cabarkeep — Tue, 02 Dec 2008 00:06:06 GMT

Almost correct mickie ... Most banks do take into consideration rent or mortgage in their decision for auto credit. Most of the time they will use a $300 minimum as a rent factor unless you own the home outright or live with parents.

There are a lot of misconceptions in the auto business ...yes I work in the business and do it everyday ... when banks are not open and even when they are, we look at peoples credit and figure the lowest rate we can get for them many times before getting the approval ..... 90% of the time we are right however, depending on the situatioin (self employed people and proof of income) sometimes the banks are a little harder to sway ....especially if the person has any derog credit or is a first time buyer ...

This is no scam like the other poster had said ..unless you are dealing with an unethical dealer ..most of the time it is simply a situation where the dealer thought they could get you financed and because of the credit or stips needed to prove to the bank your income the dealer could not get it done at the rate they promised you ...or maybe in some situations not able to get financed at all ....

This is terrible for both parties involved ...trust me our dealership hates to let anyone leave our lot without some sort of approval ...do we roll some people on a guess ...yes sometimes we do ..but I personally will let the person know what I'm up against so they know what to expect ....

As far as advice for the poster of this thread I would say give us a little bit more info ...

How much down payment?

New or used car?

Have you purchased a vehicle before?

Credit Score? Any derog?

What state are you purchasing in?

In CA we have 10 days to get you financed and you are explained this when you sign your contract ...again if you want to know for sure you are financed and at what rate just ask to see the approval ...otherwise you can bet that you are getting shopped to find someone who can give you financing.

People with credit 700+ usually will not run into this type of situation as they just go to a credit union and do not get shopped normally and with that credit score there is usually someone who will give them a loan ....that is why you might get differing opionions on why rates/terms will change after a contract is written within that 10 days ...

Anyways feel free to send me a PM if you do not want to share this info on the board ....

good luck!

Re: I was "approved" and now I'm probably having to return the car?

sekada — Sun, 07 Dec 2008 16:22:01 GMT

How do you KNOW you're approved? How can they prove it to you? Might be a dumb question, but I'm envisioning myself walking out the dealership going, "Call me when you know for sure!" and they're going, "WAIT! We know for sure!" How do I know??

Re: I was "approved" and now I'm probably having to return the car?

Anonymous — Sun, 07 Dec 2008 16:44:09 GMT

@alxtan wrote:
I am speaking from experience when I say this. Never take a car home from the dealership unless you are 100% sure that you are approved for a loan. This is a classic dealer scam. Next time tell the dealer to give you a call when they are sure you are approved instead of letting you drive the car home.

Anyway regarding you situation. Maybe you can try an auto broker. You can find them in you local yellow pages. They should be able to help you find a car and loan.

Sorry to hear about your problem I hope I helped in some way.

Good luck!

I would not say it is a classic dealer scam, Banks do that too.. Dealers agree on the basic on making the product available to you when you want it... It works well for most of the cases, but if the loan is not approved then they ask you to return it.

As for the bank, if you take a check of boa say $1000 and try to cash it in wellsfargo, wells fargo will give you cash instantly even though wellsfargo do not have the cash from bofa yet... WF forwards this check to bofa and then bofa gives the cash to WF.

If bofa says that the check was fake or something else, the check bounces and you as the encasher even though you have the money will have to return the money back to WF.

Re: I was "approved" and now I'm probably having to return the car?

Anonymous — Sun, 07 Dec 2008 16:46:06 GMT

@pacattack81 wrote:
let me see if i have this right..so the 1st dealership got you approved through a bank at whatever interest rate they said...had you sign for the loan, car and drive away with it?...the dealership must have been desperate if they let u drive the car away without being 100% sure about getting u financed

It is done in many cases and is normal.

Message Edited by voidman on 12-07-2008 08:46 AM

Re: I was "approved" and now I'm probably having to return the car?

Watchmann — Sun, 07 Dec 2008 17:17:12 GMT

Read all the fine print. There is usually a one pager stating that the financing is contingent on getting approved. Push that paper back to them and tell them you'll drive the car off the lot when everything is approved. No if's, and's or but's.