topic Re: !!!!SHADY DEALER!!!!! Need professional/factual response. Not opinions. in Auto Loans

!!!!SHADY DEALER!!!!! Need professional/factual response. Not opinions.

Anonymous — Thu, 07 May 2009 05:28:37 GMT

This is extremely important. I am purchasing a (1 previous owner/pre-owned certified) car for the first time, from a dealer. The car is listed at $14,683.00 (2008 Mitsubishi Lancer GTS). My credit score is 685. I am unemployed, but I do have a consistent income. The dealer refuses to budge on the price, after initially stating that he would go down to $14,200.00. After spending over an hour waiting for them to get a response from the bank I went home. Today they called me and told me I was approved and wanted me to come in to discuss the results. I told the dealer that I was not coming all the way back there in my condition (I am disabled) just for him to tell me something I was not going to agree to. I convinced him to tell me that I was approved for a $188.00/72month payment plan @ 10.29% interest rate. However, he stated because I am unemployed (even though I receive $2,400.00 a month consistently for life), he has to charge me $994.00 for a 10 year warranty that I did not request. He stated that under these conditions I HAVE to buy the warranty; the bank will not allow it any other way. I forgot to mention that I am putting $6,000.00 down plus an additional $1,000.00 for my trade-in. Is this right? I have never purchased a car before, thus having no experience. My question is, can he legally make me purchase a warranty I do not want in order to get the car. Furthermore, I honestly believe that when we (my brother and I) were at the dealership and asked the rep to leave us alone so that we can discuss our options, he pushed the intercom on the phone and went into another room with the manager and listened. Have no proof, but 97% sure of this. I know that I could go to another dealer, but I want to know if they have the right to tell someone they have to buy an additional warranty in order to get the loan. I only want the facts. Thank you. P.S. I live in NJ.

Message Edited by MsMoeFro on 05-06-2009 10:28 PM

Re: !!!!SHADY DEALER!!!!! Need professional/factual response. Not opinions.

Anonymous — Thu, 07 May 2009 07:02:09 GMT

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.

Re: !!!!SHADY DEALER!!!!! Need professional/factual response. Not opinions.

Anonymous — Thu, 07 May 2009 07:37:46 GMT

Re: !!!!SHADY DEALER!!!!! Need professional/factual response. Not opinions.

Anonymous — Thu, 07 May 2009 13:06:59 GMT

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.

Re: !!!!SHADY DEALER!!!!! Need professional/factual response. Not opinions.

moondog7324 — Thu, 07 May 2009 16:11:29 GMT

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.

Message Edited by moondog7324 on 05-07-2009 09:11 AM

Re: !!!!SHADY DEALER!!!!! Need professional/factual response. Not opinions.

Anonymous — Thu, 07 May 2009 17:41:43 GMT

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.

Re: !!!!SHADY DEALER!!!!! Need professional/factual response. Not opinions.

Anonymous — Thu, 07 May 2009 18:18:24 GMT

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?

Re: !!!!SHADY DEALER!!!!! Need professional/factual response. Not opinions.

Anonymous — Thu, 07 May 2009 22:38:32 GMT

ty, but no opinions.

Re: !!!!SHADY DEALER!!!!! Need professional/factual response. Not opinions.

moondog7324 — Fri, 08 May 2009 12:57:25 GMT

You are not entitled to credit, and lenders can make conditions to protect their risks, they are not charities.

Message Edited by moondog7324 on 05-08-2009 05:57 AM

Re: !!!!SHADY DEALER!!!!! Need professional/factual response. Not opinions.

Anonymous — Fri, 08 May 2009 02:34:05 GMT

Absoutely NOT! a bank tried that same stunt with me and I told them to go you know where! BTW your score arent bad at all 685 is a decent score I have seen people with a lower score than that and get better deals! If i was you i would keep shopping and take your time cause no matter the dealer tells you , you are the one thats going to be making the car payment NOT THEM!

Re: !!!!SHADY DEALER!!!!! Need professional/factual response. Not opinions.

Anonymous — Fri, 08 May 2009 04:32:12 GMT

thank you so very much misskiyota, for your patient and respectful response.

Re: !!!!SHADY DEALER!!!!! Need professional/factual response. Not opinions.

Anonymous — Fri, 08 May 2009 05:04:07 GMT

@Anonymous wrote:
Absoutely NOT! a bank tried that same stunt with me and I told them to go you know where! BTW your score arent bad at all 685 is a decent score I have seen people with a lower score than that and get better deals! If i was you i would keep shopping and take your time cause no matter the dealer tells you , you are the one thats going to be making the car payment NOT THEM!

So did you get a car?

From that transaction?

Re: !!!!SHADY DEALER!!!!! Need professional/factual response. Not opinions.

Anonymous — Fri, 08 May 2009 07:26:27 GMT

Your very welcome

Re: !!!!SHADY DEALER!!!!! Need professional/factual response. Not opinions.

moondog7324 — Fri, 08 May 2009 12:59:44 GMT

A FICO score is not the only factor , you need the ability to re-pay, debt to income ratio, length at job etc. My wife has a 750 FICO- but has no income. She would not get a loan.

Message Edited by moondog7324 on 05-08-2009 05:59 AM

Re: !!!!SHADY DEALER!!!!! Need professional/factual response. Not opinions.

Anonymous — Fri, 08 May 2009 15:42:46 GMT

@moondog7324 wrote:
A FICO score is not the only factor , you need the ability to re-pay, debt to income ratio, length at job etc. My wife has a 750 FICO- but has no income. She would not get a loan.
Message Edited by moondog7324 on 05-08-2009 05:59 AM

I'll never forget the phone call I got:

"XXX Ford how can I help you?"

Female voice:

"I have a 730 credit score and I want to buy an Expedition EL you have any?"

"Yes I do can I get your name and phone number?"

YADA, YADA, YADA=

"Ok and before we go any further, would you be adverse to giving me your credit information over the phone so I can get my finance people working on the best rates you will qualify for?"

YADA: Name address, etc age 22 Rent 600 a month
Employment SSI Only 2130 a month

No other income, "Needs" Expediction for her 3 kids. Not currently receiving child support as the daddys are in jail.

No downpayment, not enough free income a month to support a car payment and insurance. But hey lets get em in and see if we have something.

No major positive entries on credit, no negatives score in low 700s

"OK!"

"Ma'am I do not think that a brand new Expedition EL is in the cards for you, we have a great selection of used vehicles that may fit your needs"

"I WANT AN EXPEDITION EL AND I WANT IT- I HAVE A 730 CREDIT SCORE."

"Ma'am you are not going to get a new Expedition from me or any other dealership."

"Why? because I am XXXXX"

"No because you don't have a down payment and will get a monthly payment of $1,100 just for the vehicle. Add a hundred for insurance, 600 for rent and there's no real room for you to buy food and eat. No bank is going to give you a loan."

"I didn't know a payment would be $1,100."

"OK, its a $50,000 vehicle what payment did you expect a month?

"I know how much they cost, I was expecting maybe $300. Doesn't my score help I have a 730?"

Re: !!!!SHADY DEALER!!!!! Need professional/factual response. Not opinions.

MsKiwi — Sat, 09 May 2009 04:12:45 GMT

the only facts are that you can accept the offer or not. No one is obligated to loan you money and you are not obligated to accept a loan you don't like.

IMO this is not a great deal and I'd walk away.

Re: !!!!SHADY DEALER!!!!! Need professional/factual response. Not opinions.

Anonymous — Thu, 14 May 2009 15:17:50 GMT

I recommend you take a breath, go to edmunds.com and look at what the car should really cost and what the dealer is paying for it. Then, submit requests from there to their internet sales people for quotes. I have had much better luck locking down good quotes and details by working with them via email only. Then I had it in writing and they knew I was shopping around simultaneously with other dealers. Just be sure to ask for the "itemized out the door price." Don't let them give you a price and say "just add taxes/tag/title/fees" etc. Sometimes those fees REALLY vary. Then go to bankrate.com and see what your monthly payment would be at different loan terms. Good luck!

Re: !!!!SHADY DEALER!!!!! Need professional/factual response. Not opinions.

Schoolbuskid — Fri, 15 May 2009 01:33:13 GMT

Yea your best bet is to shop around! Do you have an account with any credit unions, if so you wouldnt even have to deal with that crap.

I have the perfect car for you....Chrysler 300C....5.7 liter hemi...you cant go wrong there...lol

Good Luck, and i was just joking about the Chrysler, although they are fine vehicles!