I don't get it, can someone explain?

[Anonymous]

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@jim44 wrote:

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@pipeguy wrote:

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@Anonymous wrote:

It isn't just the subprime lenders..  Capital one was charging the dealership an aquisition fee on me had I went with them.   The dealer can't charge you back, but they strongly encourage you to get the "extended warranty"  to kind of offset the fee.   That is what they wanted to do with me..  Luckily they got me financed through Hyundai without a fee.  I still got the warranty, but still financed the car with the warranty at book value, so im not upside down.

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Did the Hyundai dealer tell you that? I'm pretty sure that a bank offering a loan to you to buy a car does not result in the dealer paying the bank $1500 and getting an extended warranty tossed in....

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Pipeguy,  What Matt said is true.  For high risk loans the dealer is charged an acquision fee.  The fee amount varies from customer to customer as FICO scores, make and age of a car as well as mileage can have an influence on the amount of the acquision fee.  I've seen them as high as $2k. It is illegal for a dealer to pass this fee onto a customer and believe me the lenders make sure they don't.  In Matt's case I don't think it was good business for the dealer to show and/or tell the customer of the acquision fee or the amount. Matt also stated that the dealer can't require a customer to by an extended warranty in order to complete the sale.

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I have a different view..  Im actually glad the dealership told me about the aquisition fee.  Overall, as sketchy as car dealers are, they were honest with me.  When the car amount jumped 2k  of course I wanted answers.   That is when I was told about the aquisition fee.  Now, the fee wasn't what made the car price jump, it was the 2k warranty they were throwing in, as i said, to offset that aquisiton fee.. I totally don't blame them for trying to do that.    On the cap one deal, they even ended up throwing the warranty out, but with that 12% interest it was just more than I wanted to pay.   Hyundai did my deal with the warranty,. and at a way lower rate.  I haven't even made a payment yet and payoff on the car is right at book value.  So I feel I did good..  I can still cancel that warranty, but I think im gonna keep it..   

[jim44]

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@Anonymous wrote:

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@jim44 wrote:

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@pipeguy wrote:

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@Anonymous wrote:

It isn't just the subprime lenders..  Capital one was charging the dealership an aquisition fee on me had I went with them.   The dealer can't charge you back, but they strongly encourage you to get the "extended warranty"  to kind of offset the fee.   That is what they wanted to do with me..  Luckily they got me financed through Hyundai without a fee.  I still got the warranty, but still financed the car with the warranty at book value, so im not upside down.

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Did the Hyundai dealer tell you that? I'm pretty sure that a bank offering a loan to you to buy a car does not result in the dealer paying the bank $1500 and getting an extended warranty tossed in....

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Pipeguy,  What Matt said is true.  For high risk loans the dealer is charged an acquision fee.  The fee amount varies from customer to customer as FICO scores, make and age of a car as well as mileage can have an influence on the amount of the acquision fee.  I've seen them as high as $2k. It is illegal for a dealer to pass this fee onto a customer and believe me the lenders make sure they don't.  In Matt's case I don't think it was good business for the dealer to show and/or tell the customer of the acquision fee or the amount. Matt also stated that the dealer can't require a customer to by an extended warranty in order to complete the sale.

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I have a different view..  Im actually glad the dealership told me about the aquisition fee.  Overall, as sketchy as car dealers are, they were honest with me.  When the car amount jumped 2k  of course I wanted answers.   That is when I was told about the aquisition fee.  Now, the fee wasn't what made the car price jump, it was the 2k warranty they were throwing in, as i said, to offset that aquisiton fee.. I totally don't blame them for trying to do that.    On the cap one deal, they even ended up throwing the warranty out, but with that 12% interest it was just more than I wanted to pay.   Hyundai did my deal with the warranty,. and at a way lower rate.  I haven't even made a payment yet and payoff on the car is right at book value.  So I feel I did good..  I can still cancel that warranty, but I think im gonna keep it..   

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Good job Matt... contrary to what many have experienced and have expressed on this forum, there are still some auto dealers who are honest with their customers. I like your view, however,  it's hard enough trying to explain to some customers that because their credit isn't the best, they have to face higher than average loan APRs without mentioning the mandatory acq fee. If the customer can't be charged for the fee, why bring it up?  Your dealer should have presented two invoices, one with the extended warranty and one without.  This way you don't suffer from "sticker shock".  In the end though I'm glad everything worked out for you.  Customer new car excitement is contageous!!

[Anonymous]

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@jim44 wrote:

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@Anonymous wrote:

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@jim44 wrote:

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@pipeguy wrote:

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@Anonymous wrote:

It isn't just the subprime lenders..  Capital one was charging the dealership an aquisition fee on me had I went with them.   The dealer can't charge you back, but they strongly encourage you to get the "extended warranty"  to kind of offset the fee.   That is what they wanted to do with me..  Luckily they got me financed through Hyundai without a fee.  I still got the warranty, but still financed the car with the warranty at book value, so im not upside down.

---

Did the Hyundai dealer tell you that? I'm pretty sure that a bank offering a loan to you to buy a car does not result in the dealer paying the bank $1500 and getting an extended warranty tossed in....

---

Pipeguy,  What Matt said is true.  For high risk loans the dealer is charged an acquision fee.  The fee amount varies from customer to customer as FICO scores, make and age of a car as well as mileage can have an influence on the amount of the acquision fee.  I've seen them as high as $2k. It is illegal for a dealer to pass this fee onto a customer and believe me the lenders make sure they don't.  In Matt's case I don't think it was good business for the dealer to show and/or tell the customer of the acquision fee or the amount. Matt also stated that the dealer can't require a customer to by an extended warranty in order to complete the sale.

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I have a different view..  Im actually glad the dealership told me about the aquisition fee.  Overall, as sketchy as car dealers are, they were honest with me.  When the car amount jumped 2k  of course I wanted answers.   That is when I was told about the aquisition fee.  Now, the fee wasn't what made the car price jump, it was the 2k warranty they were throwing in, as i said, to offset that aquisiton fee.. I totally don't blame them for trying to do that.    On the cap one deal, they even ended up throwing the warranty out, but with that 12% interest it was just more than I wanted to pay.   Hyundai did my deal with the warranty,. and at a way lower rate.  I haven't even made a payment yet and payoff on the car is right at book value.  So I feel I did good..  I can still cancel that warranty, but I think im gonna keep it..   

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Good job Matt... contrary to what many have experienced and have expressed on this forum, there are still some auto dealers who are honest with their customers. I like your view, however,  it's hard enough trying to explain to some customers that because their credit isn't the best, they have to face higher than average loan APRs without mentioning the mandatory acq fee. If the customer can't be charged for the fee, why bring it up?  Your dealer should have presented two invoices, one with the extended warranty and one without.  This way you don't suffer from "sticker shock".  In the end though I'm glad everything worked out for you.  Customer new car excitement is contageous!!

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It was for sure a learning experience.  First time ever financing anything.  Took me 2 years just to get to the point of being able too credit wise.  So I think given that and my small credit file I did pretty good with 8% interest.    2014 Veloster Turbo  14k miles.       I said that payoff is right about book value, its close..  My payoff is actually about 1000 above book..    But its close..  I am going to pay extra every month to whittle that down a little more.  Point is, im not totally upside down in it like happens to many first time buyers..  I told the lot I refused to have that happen.. I waited all this time to finance my first car, and if I had to wait 2 more years and work on my credit more I would.   I also play to refianace in 10 months to a year..  I just wanted to share my experience because the origial posters scenario is very similar to mine..   Thanks for the kudos..

Matt

[Anonymous]

I sold and financed cars for a number of years.  This very reason ( discount lending) is exacty why you get a price first and formost.  I worked in the Ft. Hood area and that is one of the worst in the country for discount lending.  The finance company and SNACC (security national auto acceptance corp.) were some of the worst offenders.  Most lots didnt even have prices on the car.  They would get you to like a car, pull credit and get you approved before they talked any kind of price.  That way they were not violating law by changing the lending fee to the customer.  I have seen a lot of stuff in my time and most of it not very good.  If you brought in your own loan after they approved you for discount financing then they would give you a small cash discount to take it to the 115% - 125% LTV so your bank or where ever you were financing would approve it.  When they were doing full discount financing they would end up about 125% to 150% over the actual value of the car but since it was almost exclusively military the company knew it would get taken straight out of their checks on allotment and the company was all but guaranteed to get paid.  You always negiotate price of car first.  Then financing info then trade absolutely last.  That way they cant raise the price of the car in order to cover your negative equity.  Face it cars depreciate quickly.  If they sold you a car then they made money on it.  Period.  They wont lose money or break even  Most lots charge a PAC fee typically $1000 to $2000 per car for make ready advertising etc. that even the salesman loses money to.  Then they have to make money for the car lot and the sales guy to get paid on.  However due to consumer education (thank you myfico forums), available prices online and banks tightening up lending policys it is very hard to make 5 pounders anymore ($5000 profit- the sales guy would make from $1000 up to $2000 when teiring out).  Also these NADA and KBB guides are good but I have never once seen them write a check for a car.  Just remember a car is worth only what you are willing to pay for it.  I sometimes walk away these days and dont come back if I can't get the deal I want.  Took me 3 months to get the 2013 altima i wanted in 2014 but in the end I saved $5000 off the used price.  I am new to the forums but i fully plan on posting quite a bit and helping people when I can.  ( Sorry for the length but I have a lot of stuff I want to share and help people out much to the chargrin of car lots!!!).

[Anonymous]

Thank you all so much for your insights and info. It's taken weeks, but I've finally got a deal hammered out. I cannot believe some of the nonsense a dealer will tell you, especially when you have less than perfect credit! I knew my scores and what range I could reasonably expect my interest rate to fall in. But I had dealers say everything from "You're lucky I was able to get you approved at 17%" to "That guy lied to you, he didn't submit you to anyone" to "This is the ONE car out of my 800 on the lot I can get you approved on"

The only thing that worked was an accident...I was quoted a rate/term on a vehicle at the internet advertised price and when I got to the F&I office the rate had gone up. They said the previous quote was their "guesstimate" and that this was the banks actual offer. I simply was not willing to pay that payment so I walked out and was figuring on waiting another 6 months. Lo and behold, one week later (Friday) they called and had me approved at 10.99 (not great, but within the range I was expecting and MUCH better than the 15.99 they tried to get me to sign at). 

My first payment isn't due until May 25 but I'm going to make one on April 25, then every month I'm actually making a paytment ahead and can hopefully reduce the interest enough to refinance in a year. Hopefully, between this auto loan and my prepaid credit card I'll qualify for a small loan or unsecured card in the next 6 months and get things really moving in the right direction.

Thanks again, lots of reading still to do!

[Anonymous]

So let me play devils advocate. Did you have a trade in? Either way they may have told one one specific car because the lender may have required a specific LTV of wholesale instead of left side(trade value) because they wanted to take less risk in case of Repo. They would be able to recoup more and that makes it a better loan. Not saying this was the case but it could have been when they told you here was only one vehicle. What I find is if you ask why sometimes they will be honest with you. It could have been discount financing but perhaps not.

[Anonymous]

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@Anonymous wrote:

I've been holding off on financing a vehicle until my credit improved. I was super excited when, after 3 months of using and paying a secured card my scores were finally in the 620-640 range across the board. Based on the forums here, I thought that would be no sweat to get a rate of 10% or maybe a smidge under.  So i started shopping, one dealer kept telling me the best he could do was 17.99 on a car I didn't even want! Next dealer...he can get me 12.99 on a vehicle with 95k miles...not doing that (plus seems pretty low for high miles, but funny he can't get me that on a different vehicle?)  Next dealer...says the first two were lying, didn't even submit to any banks. We settle on a vehicle, he quotes me the financial stuff and when I go to sign the papers my payment is almost $50 higher than what he quoted. His answer? "That was my estimate, but this is the banks actual numbers". I wanted the vehicle, was ok with the 14% rate (gotta start somewhere, right?) but not the payment amount nor the fact it was higher than he quoted me and didn't bother to let me know until signing time.

Now...what's my best move? I do indeed need a vehicle. Was coming into all these with 1000 down. I see all over the forums people with way lower scores getting way better rates!!! What am I missing? These are all franchised dealers, no buy here pay here or Drivetime type places.

I have: medical collections, most recent is 3 years ago. Secured card, 3 months reporting. Otherwise, nada. Everything else has fallen off except an old Target chargeoff 10 years ago (why is THAT still showing up after 10 years?)

Anyway...now I've wrecked myself with a million inquiries, have no idea who is telling me the truth. When I give approval details to one, they laugh and say it's impossible.  Is it my lack of recent history despite my scores that is making this impossible? Trying to finance 15K, so debt to ratio is still low.

Any insight, explanation, or advice would be appreciated!

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Ok, we all know the horror stories about dealers, got it

now let's point out some 'holes' in this profile...nothing personal..just to help OP see where some gapping holes lie

1) 3 months of history...3 and the world's gonna open up? c'mon what would he tell an 18 y.o. kid 3 months past his/her 18th birthday they've 'made it' and can expect solid rates...based on 3 payments?

2) To answer

Apparently I'm just naieve I know my credit history is not strong, but was so excited to see my improved scores. I guess the score itself doesn't carry much weight, it's more what makes up the score, is that at least fairly accurate?

This very accurate ESPECIALLY if manually under written by a human being, with eyes and a calculator...no offense

But, you're right depending the 'bar' set by the computer program (among other 'key word' type automation) instant approval type CC's will slide by with just credit scores being huge factors.....however if a human being looks at a file, all 640's aren't created equally.

This used tro happen all the time when I had my 1st CU job, the computers basically 'pre-sorted' but we were taught to LOOK at certain files by hand ...that's manual UW...that's why gettting a mortgage is different XYZ slapping off a 5-10k CC...

The credit scoring model is a machine crunching data nothing more there are no judgement calls ...just crunch and produce a number, so you're right even if the computer gives up a number but a human can AGREE ...with you that your credit isn't that strong..there is no BUT.....of course 'whatmakes up the score' matters..They both matter these folks MONEY!

Would it 'matter' if it were you on the other end lending your dough?

620-640 is 'ok' but not great ...think of it like school 640/850 = 75% or a middle 'C' score

A'C' level file with 3 months history, only enough down to cover 'some' of the tax/title not all...a 12.99% & 95k is NOT an outrageous offer...

"That was my estimate, but this is the banks actual numbers". I wanted the vehicle, was ok with the 14% rate (gotta start somewhere, right?) but not the payment amount nor the fact it was higher than he quoted me

He didn't quote you said he estimated and an estimation within $50 isn't 'bad' is it? This kind of thing is why I don't like quoting ANYTHING b/c clients hear it 'their way'..then you're a crook or pulling a fast one.....an estimate is a best GUESS folks? And if $50 isn't close enough, I don't know what would be.

...funny he can't get me that on a different vehicle? Could that have been a lie? Yes...of course could it be that 1 car was bought at one rate and needed to be told rate a rate higher than another, absolutely. It's a crap shoot at times as to the 'truth' but it doesn't mean 2 Accords have the same investment in them from the dealer POV....this happens all the same where al the client sees is a different color and dealer is looking at

a) discount paper he may eat on THIS car but not that one or

b) how long this one has been here costing me money vs that one on consignment, with a minimum and only a small broker fee in it.

Even with 'new' cars some are 'cheaper' to finance than others and meanwhile you want the blue and he needs to move the white one shell game yes but it may be for very different reasons than 'they just want to STICK me'....sometimes they don't want to get stuck.

Plenty dealers have to eat profit to sell 'this' car to THAT buyer b/c the buyer's paper stinks (meaning it's a risky loan, so sure you can sale 'him/her' the car but the finance company will do a 'hold-back' to see how 'this pays' vs paying the dealer straight up

sometimes the dealer needs the sale bad enough other times...they pass....used cars can be a nutty business.

I wouldn't do it...not financed cars...cash or bring your own funding but working with Westlake and Wells Fargo Dealer Services...no thanks, they bottom feed from both sides of the deal...

[Dj4Money]

 Lots of what is said here is right.

 However -

 White sells, so does Black and any variations of Silver/Grey. What doesn't sell is what people consider wild/attention seeking colors like Yellow, Orange, Red, Green and to some people Blue.

 OEM's build cars especally performance cars in those colors because some do want to be seen or make it easier to find in the parking lot.

 FICO score and being approved for things are two different issues.

 I got my car with a 605 EX score, 18.23% for 72 months on a 2015 (Purchased Jan 2015) Hyundai Accent Sport. I hadn't even so much as looked at my credit since my SRT-4 was repo'ed and I lost my job.

 With a plan, goals set and this website, I put things into motion. 

 
 I paid six payments and refinanced the car in the seven month of ownership. It reduced my term from 72 months down to 48 and my payment from $364 to $345 via a 13+ point reduction in interest (4.45 vs 18.23)

 Between that time my EX score had jumped from 605 to 661. It was 659 when I tried to trade-in the Hyundai for something that suits me better. I could have traded it in, they wanted me to put down $5,000 to cover the negative balance and taxes, which would put the loan under 100-120% LTV. I didn't have it and even if I did I wasn't that interested in giving it to them.

 One poster said, price, price, price and I agree. I got low prices but the same problem of them wanting me to cover the negative was the problem. I also wanted to take advantage of Ford Credit incentives so taking approvals from others was out of the quesiton. That said, even my own bank turned me down (Gateway One). I posted her what happen and generally the feedback I got was don't take it personal, continue to work on your credit.

  I will be able to finally trade-in the Hyundai around the end of June and early July.

 1) I am paying down my credit cards, thus far I have $804 off and I will be knocking out another $700-$1,000 this week.  By June my Utlization will be under 8% or half the balance of my Merrick card while other show zero balance.

 2) My repo comes off in July but I was told by TU and EX I could call in June and likely have it removed.

 Those two things will have my score + 700 across the board and I have one paid off car loan, no repos and my current car loan never latee.

  Rebuilding your credit is at least a year to two year project.

  I agree -

 Price, Price, Price, then Interest Rate or Money Factor and finally your trade-in. Get what you want for your trade or walk away. Even with average or okay credit, they need to sell a car (especially at the end of the month).

 You'll get the results you want.

[sr383]

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@Dj4Money wrote:

 
 I paid six payments and refinanced the car in the seven month of ownership. It reduced my term from 72 months down to 48 and my payment from $364 to $345 via a 13+ point reduction in interest (4.45 vs 18.23)

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By my math, that's a savings of $7,100. Nicely done!

[6speed8]

Unfortunately it's not cut and dry. Two people can have the exact scores but get different rates, approved vs denied, because of variables like length of credit, income, etc. Even though my Ch 7 discharged last June, I still have some old "good standing" accounts that show on my reports even though they were closed long before bankruptcy. They were closed in good standing so even with the Ch 7, it helps my "length of credit history". I'm married but "my income" is solely Disability at $25,000 a year. the Cap One pre approval was at a good rate - depending on new/used, etc, it was between 3.5-11.5% but only for about $16,800 because of my income. When I let the dealer run me, Hyundai came back with 4.9% and financed a total of $21,000 (loan,interest,etc) with all the same information.