First Time Buyer.. GLAD its OVER!

[Anonymous]

Well I have had my car for a month now (havent been on here in a little bit). I managed to get a new 2014 Honda Civic! But not without having a mini breakdown in the process. To start off I am 18 years old, as of last month I had no credit history. I go in to just have fun and look at cars (i know, i know) and this nice red, full loaded beauty catches me eye! One things leads to another and numbers start getting talked about.. I was told after giving my social I was "pre-approved"! This was exciting for me as I would not need a co-signer, and the price was perfect. I sign my papers and get in my new car feeling so independent. My breakdown begins 2 weeks later when they decide to call me and say "we need you to come in today, ASAP! Bring paystubs". Well I go into the office and I hand the paystubs. I then find out the bank declined me because of not making enough money(how, i was pre-approved and told after my application was approved?). Then I find out the dealer LIED on my credit application without telling me or SHOWING me the application! He said I make 4k a month, when I only make 1.5k! After about 2 hours I was ready to just give them the car back because it was not worth it, and I was pissed at the dealership. Guess who decides to give me the go ahead, Honda Fianance with a higher APR. I have learned my lesson with car buying!!! ( The car payment is $300, I have no rent or other bills except car insurance.)

-iPhone 5 with autocorrect off, if that explains it-

[CreditDunce]

First, congradulations on your first car.

It may have been better to simply let them take the car back.  Tell them that unless they can get you the same interest rate. you will walk.  Chances are really good they would have made it work.  If not before you leave, then by the next day.

[pizzadude]

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@CreditDunce wrote:

First, congradulations on your first car.

It may have been better to simply let them take the car back.  Tell them that unless they can get you the same interest rate. you will walk.  Chances are really good they would have made it work.  If not before you leave, then by the next day.

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Agree, if they're jerking you around like that then returning might have been a better choice.   What loan terms did they offer you initially and what did you finally end up with?

[Anonymous]

It was 9% apr through a credit union. Bumped up to 11%.. I WILL for sure be refinancing this bad boy, because that is crazy.. But without having a co-signer and having at the time no credit history, I can see why they picked such high APR.

[CreditDunce]

I can understand the rate, too.  However, that doesn't mean the rate the bank approved you for was 11%.   Often shady lenders will bump up the rate and keep the difference as profit.  Prime targets are people who already have the car, have shown it their friends, etc. 

I understand you don't have a cosigner.  But do you have someone in your family who has a CC with good credit history (e.g. 10 years old, perfect payment history) who is willing to add you as an AU?   They don't need to give you the AU card or anything.  If so it could help your EQ-04 score.  Some credit unions (e.g. DCU) use FICO 04 scores.   It might help you get a much better rate once you are able to re-fi.

On the downside, DCU at least does a double EQ pull for joining and loan approval.  However, once you establish your credit you should garden for a while any way. 

[RushXTC]

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@Anonymous wrote:
Well I have had my car for a month now (havent been on here in a little bit). I managed to get a new 2014 Honda Civic! But not without having a mini breakdown in the process. To start off I am 18 years old, as of last month I had no credit history. I go in to just have fun and look at cars (i know, i know) and this nice red, full loaded beauty catches me eye! One things leads to another and numbers start getting talked about.. I was told after giving my social I was "pre-approved"! This was exciting for me as I would not need a co-signer, and the price was perfect. I sign my papers and get in my new car feeling so independent. My breakdown begins 2 weeks later when they decide to call me and say "we need you to come in today, ASAP! Bring paystubs". Well I go into the office and I hand the paystubs. I then find out the bank declined me because of not making enough money(how, i was pre-approved and told after my application was approved?). Then I find out the dealer LIED on my credit application without telling me or SHOWING me the application! He said I make 4k a month, when I only make 1.5k! After about 2 hours I was ready to just give them the car back because it was not worth it, and I was pissed at the dealership. Guess who decides to give me the go ahead, Honda Fianance with a higher APR. I have learned my lesson with car buying!!! ( The car payment is $300, I have no rent or other bills except car insurance.)

-iPhone 5 with autocorrect off, if that explains it-

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You kept the car? I had a 2014 Kia Optima SXL Turbo and had the same situation, First time buyer and they let me drive off... Then they rack like 14 hard pulls on my credit report, I go back and I'm offered something else, But I tell them I had fun driving the car for 2 weeks and left without a car... Until about 3 more weeks I got anoither one.

[StartingOver10]

This is called the Spot Delivery scam. It is a very common scam that has been around for a long time. The dealer is banking on you falling in love with the car while you are driving it for two weeks and then pulling the car financing out from under you so that you jump for the chance to take it at any price. This generally means they want more down payment OR higher interest rate OR longer term - or a combination of all three things!

They took advantage of you because it was your first car purchase.

However, they try this on almost anyone - not just first time auto buyers.

The only way to cure it is to walk away from the deal when they call you in to change the terms. Give them the car back.  Its not a repo because they "couldn't finance you" at the original terms. You would be amazed, as pointed out earlier, that they suddenly can make the terms work even if they hold the note in house. But you have to physically walk away and they will either call you in the next day or two or the deal is dead.

I am not blaming you because you probably didn't know and you were happy to get the car at any price. But the only way to teach the dealer not to mess with you and your money is to either hold them to the contract or unwind the deal. Anything else encourages their bad behaviour because they get rewarded with extra commission for jerking you around.

Now that you are in the deal though the best thing to do is to refi out of it asap. IMO,  if you have an extended warranty on this new car - cancel it. If you have gap - check with your insurance company, I bet the gap is much, much less expensive. Cancel the auto dealer gap and get your insurance gap policy. Get a refund on both of those items right now and it will save you a boatload of money and also bite the F&I guy in the behind by removing his commission he added to the deal for those two items.    They have to refund you the money (check) or credit it to your loan balance. Either way, you win.

[Anonymous]

I really loved the car.. But i had my mother there and she told me and the guy that I will take my old car (09 ford fusion) back.. Then the deal came up out of no where after the "GM" talked to the finance company. It was a learning lesson for sure

[RushXTC]

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@StartingOver10 wrote:

This is called the Spot Delivery scam. It is a very common scam that has been around for a long time. The dealer is banking on you falling in love with the car while you are driving it for two weeks and then pulling the car financing out from under you so that you jump for the chance to take it at any price. This generally means they want more down payment OR higher interest rate OR longer term - or a combination of all three things!

They took advantage of you because it was your first car purchase.

However, they try this on almost anyone - not just first time auto buyers.

The only way to cure it is to walk away from the deal when they call you in to change the terms. Give them the car back.  Its not a repo because they "couldn't finance you" at the original terms. You would be amazed, as pointed out earlier, that they suddenly can make the terms work even if they hold the note in house. But you have to physically walk away and they will either call you in the next day or two or the deal is dead.

I am not blaming you because you probably didn't know and you were happy to get the car at any price. But the only way to teach the dealer not to mess with you and your money is to either hold them to the contract or unwind the deal. Anything else encourages their bad behaviour because they get rewarded with extra commission for jerking you around.

Now that you are in the deal though the best thing to do is to refi out of it asap. IMO,  if you have an extended warranty on this new car - cancel it. If you have gap - check with your insurance company, I bet the gap is much, much less expensive. Cancel the auto dealer gap and get your insurance gap policy. Get a refund on both of those items right now and it will save you a boatload of money and also bite the F&I guy in the behind by removing his commission he added to the deal for those two items.    They have to refund you the money (check) or credit it to your loan balance. Either way, you win.

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Yeah, It didn't appear on my credit at all, Because technically it wasn't ever mine.... No finance record, NOTHING. They also lied to me about some bullcrap that I had to pay for insurance, But when I read the contract that night, It was the down payment after rebate.

Since it was my first purchase, I didn't know... No matter how much you liked the car, You shouldn't of agreed...

What's the APR they "Magically" approved you for? I got 3.29%.

[dabrian]

At the apr your paying you should try to pay as much extra as you can if you want to refi within the next year.  Did you buy the car at the MSRP?