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Smart Shopper Questions About Financing New Vehicles
2253 messages, Last post on Nov 18, 2009 at 12:07 PM
You are in the Smart Shopper Forum. Your Hosts are kirstie_h & tidester
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A high number of complaints about auto dealerships and predatory lending practices are causing several consumer groups to ask that the dealerships be watched by a potential new agency that would oversee consumer financial products. Consumer Groups Want Dealerships to be Watched by Consumer Financial Protection Agency |
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I just purchased a 2010 Honda CRV EX-L 2WD, today and feel I fell into a trap at the dealership, when it came to the interest rate. My credit rating is 835 and they gave me 5.69% APR, and I had to fight to get them to come down from 5.99% I had been an excellent customer and returned a leased Honda Pilot, like new and they even supposedly gave $1,100 in equity toward this purchase. I quoted the rates I had found 2 weeks ago with the range being 4.99 to 5.49% for 36 to 48mos. They suggested I go to the bank or credit union and refinance - for 50- 100 dolllars if I can find a better rate. The price of the car was at invoice, however. Does it sound like I got a fair deal? I DON'T feel good about this. Thanks.
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Replying to: pchiffon00 (Nov 12, 2009 9:10 pm) The dealer isn't required to give you any interest rate... you have to negotiate for it... To negotiate properly, you need leverage. That leverage comes from knowing what rate you can get elsewhere.. You weren't really trapped at the dealership.. you just weren't prepared. I'd take the dealer's advice... Shop around local banks and credit unions and see if you can beat their rate. If your credit is that stellar, it should be easy. regards, kyfdx |
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Ok, so I went to one of my local Subaru dealers, and bought a new Outback. Got a great price, what I wanted for my trade, and knew all the fees, taxes and what I was going to put down. I put in my present value, future value, interest rate, and number of months into my trusty HP H10B financial calculator and got my payment. I had previously calbrated the periods and finace rate with Edmunds payment calculator, so I knew it to be pretty accurate within $0.05 or so. When I got into the F&I guy, he tried to pass off my payment being $5.50/month more than what I had. When questioned, it was explained as a "glitch", and new finance agreement was printed off immediately. Over the course of the loan, that was almost $350 extra. So, how common is this practice? This is why dealers have such a bad reputation. It seems so slimey and unethical. I don't know why it's not illegal, as it was not listed on either the bill of sale, or the finance agreement in the "cost of financing" as an added fee. It just seems soooooooo shady. Anyone else have any ideas?
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Replying to: ifontaine (Nov 17, 2009 5:48 am) tidester, host SUVs and Smart Shopper
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Replying to: tidester (Nov 17, 2009 10:17 am) Same thing with finance numbers. 10,000 financed at 5% over 60 months = $188.71. My HP calculator says that, Edmunds says that. Ford Website says that. So, it's simple to calculate my number. The math works the same in every calculation. But somehow, my amount financed got increased by about $300 or so. The only way it's a glitch is if someone puts the wrong number in. Then it's an embarrassing fat finger mistake, not a computer glitch. I wish I had access to the loan paperwork and sales orders for a random sampling of deals. My hunch is that this happens more often than not. After re-reading the article "Confessions of an Auto Finance Manager" here on Edmunds.com, I believe the practice is called "Payment Packing". Except they tried to do it to me, and I knew what the numbers were supposed to be. I have every reason to believe that this is a common practice. I'll need to go home and review the paperwork for the last three cars I've bought now. Dang!!!!
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Replying to: ifontaine (Nov 17, 2009 10:42 am)
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Replying to: lrguy44 (Nov 17, 2009 11:39 am) Purchase Price: $27,800 Doc. Fee: $250 Trade: ($2,000) Net Price: $26,050 Tax (7.00%): $1,823.50 Title Fee: $33.50 GRAND TOTAL: $27,907 Down Payment: ($11,000) Amount Financed: $16,907 Interest Rate: 3.9% Term 63 mos Payment: $297.21/mo But when I got to closing the payment was over $301. If it was a forgotten fee, then why would the F&I guy tear it up and print out a new one? Why wouldn't he explain where I was mistaken on my numbers? |
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