Don't worry about that. Just try to get the best rate you can from the dealer, but I would suggest going to the dealer pre-approved from another financial institution so that you can fall back on that if the dealer's rate is not that good.
Great advice, Merg. It is always a good idea to get pre-approved for a loan through some bank before visiting dealerships to buy a car. Having a pre-approved loan is good because it gives you a point of reference as to about how high your interest rate should be. That way the F & I manager can't trick you into taking a loan with an interest rate that is much higher than you could have gotten. Furthermore, the dealership may actually be inspired to beat the rate that you are already approved at thus saving you even more money.
This will be a long one, but I feel I must warn everyone leasing a new vehicle. I spent several weeks learning everything I could before leasing my Olds Alero, but was very unprepared for the viciousness of my finance guy. I would have walked out if they didn't have the only car I wanted available in the five state area. I've learned a lot though and want to pass on the info. I don't know if all finance people are as horrendous as the one I had, but if they are, thousands of people are paying way too much for their car.
I got my car for $250 over invoice. I went to a website that allowed me to enter all my data -- sale price, down payment, credits, interest rate, etc. -- and it gave me an estimated monthly payment. I was $187. Armed with that info. and a packet three inches thick full of Edmunds website info. and other info., I went in to pick up my car. Thank goodness, I took my boyfriend who is very good at math/accounting. Without him I would have been in tears.
The guy prints out our lease and says the payment will be $247. Whoa! I expected him to pad it a little, but that was a bit much. Unfortunately, the lease agreements allow the dealership to be very deceptive -- mine was through GMAC. I had a $1300 GM card credit which he used to his full advantage. On the line where it said "agreed upon price of the car" he had the $19,090 price plus my $1300. Why did he do this? Well, he had to take it from there, put it here and then subtract it there. That would give us a great tax benefit. Sounds like he's trying to help us out, right? There was no way I was going to sign anything that said my agreed upon price was anything but $19,090. Looking at the lease further, I noticed no where on there does it come out and tell you what interest rate you're given. When asked he said he didn't know. Come On! "I just type in the numbers and the computers does its magic." Did he really want me to fall for that line of bull? I told him he'd better figure it out. He said it was 4.9% -- the GM promotion on a lease was 3.9%! He asked incredulously where I got such information? I said how about every dealership in America, the Oldsmobile website and my GM card. He still didn't believe me. I'm thinking I sounded like a pretty informed buyer at that point and couldn't figure out why he didn't just play it straight from that point. After trying to explain where I came up with this crazy figure of 3.9%, he huffed and puffed and said he was busy and had two customers waiting. The gall!! I was in there for maybe 15 minutes at that point. I said fine, we'd go figure it out ourselves. Obviously, his explanations were getting us nowhere. I kindly asked for a calculator and was told he didn't have one. Ever hear of a finance department without a calculator?
Totally enraged at this point, we sat down and went through it step by step. I even used their phone to call a few insurance companies to inquire about GAP insurance. It's supposedly part of every GMAC lease, but it doesn't tell you want percentage of the interest rate is for the GAP. We figured out the guy was moving around our $1300 credit so that it basically negated itself. Because he had put it in the correct spot at top where it says "other credits," he would get that $1300 from GM. He also put it under "agreed upon price of car" so he would get another $1300 from GM from that. The new interest rate of 3.9% totally changed the interest on the form, of course. The only thing left that was questionable was a "GMAC Administrative Fee" of $400. From the info. on this website, I knew I wasn't supposed to pay an administrative fee over $50, so that was something I also brought up.
Back into the finance office, after fighting our GM credit point several times -- we literally had to tell him no, you're wrong four different times when he refused to agree with us -- we ended up writing down and figuring the math right in front of him. He took the sheet, quietly typed it in his machine then on the computer and sheepishly said, "Yeah, seems to be coming out right now." Go figure. He changed the interest rate to 3.9%, but only after the sales manager supposedly called GM directly to check it because they just couldn't believe it. We also had to have him change the mileage listed. It was 200 miles off (after being driven from out of state).
The administrative fee was a sore spot. He tried to tell me it was really an acquisition fee, but I countered that administrative and acquisition definitely do not have the same definition. He couldn't really explain it. "GM makes us do it." His usual response. Craig wondered why they'd charge us a fee when the interest rate on the loan is the fee for borrowing the money. It's not like a bank charges you a fee for borrowing. He got so angry at us after 5 minutes of discussing this rather heated topic that he spun back in his chair and pretty much threatened to rip up the agreement. At this point, we were very happy with where we were and didn't want to break the deal over the stupid fee. It's a good thing too because I called GMAC the next day and they said, yes, Minnesota's average for this fee is $400. But, how were we supposed to believe this guy?
Our final price was $190 a month. Almost a full $60 less than the original price he gave us. I consider that stealing, and should be illegal. It is blatant deception if you ask me. How many people wouldn't know to ask the questions we did. And then fight for what you know is right? Buying my house was much easier and less stressful than buying this car. Maybe it was just my dealership and is not the standard, but people should still be very alert and know going in where their final price should be at -- including taxes and all that good stuff. Otherwise you'll never know if they're telling you the truth.
My lesson? Next time, I'll walk into the finance dept. more confident. I'll sit down, tell them the interest rate I'm going to pay, tell them the agreed upon price and tell them I'm an informed buyer that doesn't want to be messed with. I'll have printouts of everything. From advertised interest rates, to the invoice if you have it, absolutely everything you can think of. The info. I had was priceless because it allowed me to prove what I knew was right. Don't expect to get any help from your dealer either. We asked and he basically played stupid. I guess I didn't expect him to help. It's in his best interest to let the finance guy rake us over the coals.
I'm writing a seething letter to the dealship, because as much as I like the sales guy I worked with I will never, ever deal with the nasty finance guy again. Not only was he trying to be deceptive and combative, he was rude and anti-customer service to the core.
Sorry for the long one, folks. I hope it helps a few people.
I see a lot of postings on using regular car loans to finance the purchase cars but what about using a home equity loan? I understand that one of the big minuses is that you are puting up your home as collateral to purchase a car, but I don't plan on defaulting on this loan. With current rates of about 9% , that equals an after tax rate of about 6%. I need to find out soon because hopefully I'll be getting a call on a '00 Odyssey in the not so near future.
In your long message, and by the way I sympathize with your experience - unfortunately it is too commonplace..
But you said something that is simply not true - that is that buying a home was an easier more straightforward experience..well, I recently bought a home and during that process there is about $5-6 of 'fees' and whatnot. Further, the seller had a real estate agent and that guy gets about 6% of the sale price...
so, the conclusion is that buying the car WAS very EASY. It was very easy at $260 or whatever per month he quoted you. All he was doing was trying to make some $$$. Thats perfectly legal. As for being misleading, if someone could kindly explain to me even half of the fees associated with buying a home, I would really like to hear it..instead of all those fancy names they come up with, why not call it what it really is?? 'extra money the state wants plus money for companies that built their entire business on capitalizing on this beurocratic mess!!
Dealers are business people - they want to make money. Obviously, at $250 over invoice thats not enough income..so they mark up interest rates - hey retail stores have done that for years! And they would never ever tell you that its not a good idea to get that macys card with a 23% interest rate!
The ordering of a car and the financing of the car are two separate issues. Generally, it is a good idea to get financing together before you go out shopping for a car. This way you can avoid the dealer trying to get you to go with their high financing. This also allows you to try to get the dealer to beat your current rate, which they sometimes do.
As for ordering the vehicle, generally the dealer will ask for a deposit at that time and that's it. If you are going to finance through them, that is generally taken care of when you go to pick up the vehicle. It might be possible to lock in a rate with the dealer at ordering time, but they will probably want to sign paperwork that promises that you will use their financing.
Ketch, as the Merg indicated in his post, you should be able to get the same finance rate on a vehicle that you order as you would on a vehicle that you purchase directly from dealer stock. The main difference is that when ordering a vehicle, you are only eligible for any special financing programs that are available when you actually take delivery of your vehicle. As a result, the financing programs that are effective when you order your car or truck may change by the time that you actually get it.
thanks to thosw who responded. Ya I am aware that buying the car and financing are seperate deals, but i do plan to go with GMAC due to thier 3.9 rate for 48mos. thru january. Looks like if I order the car and do sign to go with GMAC I may be able to lock the rate, I'll try. If not, looks like the effective rate at delivery applies, but I may be ok. If I order soon, the car would likely be delivered in 8 weeks, so i would fall under the rate deadline, hopefully.
I receive a lot of email on our free consumer advocate site CarBuyingTips.com from people all excited about the 2% APR the car makers are advertising. I want to strongly caution all of you about this. READ THE FINE PRINT! It says "with approved credit" or "qualified buyers only". Unless you have a decent salary, and absolutely perfect and I do mean perfect credit, not one late payment, you will not qualify for the low APR. It's used to reel you in the door. Also, most low APR car loans from the dealer require you to pay off the car in 24-48 months. Are you prepared to do that? Here's something a lot of readers email us about: What happens is you sign the papers, drive off and 2 weeks later they call you up to say you did not get financing, and your payments are going up $100 per month. Yes this is legal, because even though you thought it was a done deal, the fine print of your contract says "Subject To Financing". If you have questionable credit, do yourself a favor and get your financing elsewhere, and take the rebate in lieu of the low APR at the dealer. For loans under $15000, rebates at $750 or above usually beat a low interest rate. If you want to pre qualify online, try sites like LendingTree that send you offers from up to 4 banks based on your financial data. CarFinance.com will fedex you a check the day after you qualify and you just go pay for your ca with the check. Hope this helps, stop by and see us, we have plenty more good advice!
Don't forget that another way to protect yourself from the "I'm sorry but you did not qualify for the lowest rate and now your payments are $xxx" problem is to have the contract modified to say that the sale is subject to financing at a particular rate or better and if that does not happen, either party can back out with no penalty.
Jeff, please feel free to stop by the Edmunds.com Town Hall to share your opinions and to ask others questions related to the automotive industry. Your post contained some useful information, however it is not appropriate to use this forum to advertise your personal Web Site. Thanks.
how can they take money back after the check is cleared. That's just not possible. They can possibly demand a refund or something, but they can't just take it.
I think the line from the salesperson is bull. I believe what is really happening is that they will try to offer you better financing.
'11 GMC Sierra 1500; '98 Alfa 156 2.0TS; '08 Maser QP; '67 Coronet R/T; '13 Fiat 500c; '20 S90 T6; '22 MB Sprinter 2500 4x4 diesel; '97 Suzuki R Wagon; '96 Opel Astra; '11 Mini Cooper S
People, be careful when applying for manufacturer's special low rate financing, when applying at a dealer they don't tell you the truth if you get qualified for the lowest rate.If a dealer tells you that you can't get qualified for the lowest rate, chances are they're not telling you the truth. I suggest you go to the Manufac.'s website, ford, honda, etc. to find out what you're really qualified for before signing papers. Currently Ford has a 5.9% financing for 60mos.I went to Varsity Ford PaloAlto,Ca and was offered the expedition $900below invoice. They told me I didn't get approved for 5.9%, but 23% instead.Feeling a little suspicious, went to Sunnyvale Ford, Ca. Applied with a co-signer hoping to get 5.9%. After credit check, I was informed that I've already been approved with the 5.9% through Varsity Ford why reapply again ???? Ended up getting through Sunnyvale Ford with $200 over invoice plus 5.9%financing. Can Varsity Ford be sued for falsifying the app.result????? Poor VarsityFord, they jack one person, now thousands will know about how they operate.
Hi, As u will see in the adv. the Manuf. Fin rates are lower (2.9 to 5.9%) than the various credit unions (7 to 10%). But I guess the interest rates of CU are compound and changes (reduces) over the period. But the Manf. rates are simple and fixed. Thus they calculates the interest over the entire period and over the entire amt and we have to pay more interest in long run. eg. for Manf rate of 5.9% and amt is $10000 for 4 yrs. u have to pay $257.00 pm. But for 7.5% CU rate u will have to pay $241.79 pm. This info about CU is taken for a established CU site. Anybody interested to put more light on this issue? Thanks.
There is something fishy about the $257 payment. The payment for a $10000 loan at 5.9% should be about $234.39.
Manufacturers' below market finance rates are a genuine incentive to buy one of their vehicles. They don't "make money" thru their loans, they make it by getting you to buy their vehicle.
Also, there isn't a big difference between simple interest and compound interest loans when payments are made monthly. However, compound interest almost always costs you, the borrower, more than a simple interest loan does.
I just finished buying a Odyssey and got worked over by the finance guy. I was prepared for the sales guy but not this guy.
To make a long story short, I have to return to the dealer and redo my finance contract because my downpayment changed. At this point can I back out of the alarm and extended warranty and the floor matts since the original contract is not valid?
What do you mean your "downpayment has changed"? Has the dealer agreed (with you) to invalidate the original contract? If so, and the dealer is attempting to get you to sign a new contract, then it seems to me you are back to square one - back out of whatever you want. If the old contract hasn't been destroyed though, the dealer might decide the old contract is better than the new one ... and you would be bound to it.
Suprisingly the finance guy didn't put up much of a fight on the new contract. We had to redo the contract because the original one was based on a downpayment the finance company would not accept. So I removed the extended warranty and the alarm. I didn't push for the matts because that was on the retail contract and didn't want to try my luck on that one.
Do the finance people get commission based on the interest rate they can sock the customer with? Where does most of the gravy come from for the finance people? I received 10.85 and wonder what the true interest rate was.
Slocko, banks usually give the dealerships that they work with a list of base rates that they will approve certain customers for. Then the dealership has the option to mark-up the rate to a certain extent so that they can make extra profit on the deal. That is why it is a good idea to be pre-approved for a loan prior to reaching a final purchase agreement on the vehicle that you want. By having per-approved financing you have a good idea of what sort of interest rate you should be paying. Furthermore, it often turns out that dealerships can beat your best rate if motivated to do so.
We are planning to pick up our Odyssey on thursday (after a 4 month wait!) and want to finance it through our credit union. The dealer has an arrangement with the CU to get the Financing.However, we decided to get preapproved directly.I got this idea from the valuable advice given in this forum.Thanks.Now I need some advice. The CU is offering 6.75% interest but the APR is 7.0%.The installments will be deducted directly from the bi-weekly pay, so effectively there will be 26 payments per annunm.And the monthly payment will be lower than what it would be if you paid each month. Does this seem a good deal?Can anybody tell me how to calculate and compare financing? The lady at the CU told me that if we had applied through the dealer we could have ended up with a higher rate. Can I try to see if the dealer's finance dept would beat this rate? I would be grateful if you could help me out as soon as possible.THANKS A LOT.
Bgv99, it sounds as though you are getting a pretty good deal on financing through your credit union. However, it never hurts to shop around. I definitely suggest that you take your pre-approved interest rate with you when you visit the dealership and see if they can beat it. You never know, they might be able to. If not, no harm done.
Thanks carman- I shall see what the dealer offers and let you know what happens tomorrow. Can you tell me how is the APR worked out?If the interest rate is 6.75% why is the APR 7.0% ?
You might check to make sure that what you are calling APR isn't really APY (annual percentage yield). APR IS the interest rate.
APY is figured depending on how the interest is compounded. Compounded biweekly, the APY (using an APR of 6.75%) would be 6.97% or rounding off, 7.0%.
BTW, a preapproved rate of 6.75% sounds awesome. Usually, a preapproved loan helps you in bargaining wrt the purchase price. However, you are buying an Odyssey so that's not gonna happen. Congratulations on your new vehicle.
Home equity loans are a great way to borrow at low rates because (a) they are well-secured and (b) they are tax-deductible (making them even lower). I have, however, been told that point (b) only applies if you actually use the money for "house-related items", i.e., borrowing $30k on your house and buying a car with it makes the interest non-tax-deductible. I am no expert on this but you should consider it (along with the chance of actually getting caught; hint: do not borrow the exact cost of the car immediately before buying the car :-) ).
Of course, the best method by far of financing a car is to figure out how much you want to pay per month, pay it to yourself (open a separate account for this, it really helps; you can even do automated monthly transfers) for a few years, and earn the interest on it yourself, instead of losing it. But then you have to wait a lot longer....
(I got a small credit union loan for my previous car, 9 years ago. I have been doing the "pay myself" thing for its replacement.)
Check with a tax advisor. Mine told me that as long as the loan is secured by the house, then all interest is tax deductable. I got my car that way, and it's perfectly legal. It also turns out to be very flexible. In addition to being tax deductable, the minimum payment (in my case) is 2% of the outstanding balance. That works out to about a 60 month loan. I am paying a bit more in additional principal payments with the goal of paying off the car in 3 years.
So, a home equity line doesn't have to go into home improvements, although, as I've said in another forum, a new car in the driveway can always be considered a "home improvement"
In Edmunds rebates/deals site it said that the 2000 Dodge Grand Caravan had a $1500 rebate or 0.9% financing and the note attached said this was available since 10/99. I purchased a Grand on Dec 31 and only the $1250 rebate was available. I sure would've liked the 0.9% - does anyone know when this was really availvable - I think it was 1/3/00.
Hey all, Tell me what you all think, I'm 23, have little credit, and want a $25k car. I have an $8000 down payment, no trade in, and have been working at my job for a year. I make enough to cover the car payments/insurance plus all my bills. Do you all think I'll have a hard time getting financed, do you all see anything that will hold me back? This is my first car purchase and I'm nervous about not being able to get it. Has anyone else been in this same situation? Do you all think I have a chance? Thanx in advance for the advice.
The absolute best thing you can do is to go to a credit union or bank to get pre-approved for a loan. Do this before you go to the dealer. A pre-approved loan is basically a blank check valid for any amount up to the amount you're pre-approved for.
The CU or bank will decide how much they are willing to lend to you. Based on what you've said, I don't see why they won't lend you what you need. If the amount they are willing to lend to you, plus your $8000 will cover the cost of the car, you don't have a problem. Make sure you know what the cost of the car actually is (you pay tax, title, in addition to car cost). Salesmen are notoriously sleazy about trying to stick you with various fees. Use this site to educate yourself on what things are negotiable and what are not.
Depending on what vehicle you want to buy, the dealer may be able to offer financing that is a better deal than the CU/bank. This site can help you learn what sort of incentives the dealer can make.
Don't let the salesman pressure you. Take your time. Make sure that you aren't so in love with one particular vehicle that you aren't willing to go somewhere else. Salesmen can smell that and will use it against you.
Hey thanks for the advice. People that know me tell me that I shouldn't have too much trouble but I guess I just needed to hear it from someone else. I'm planning to buy my car online so I will have to haggle less hopefully. Do you personally recommend any CU's or national banks? If anyone has any more advice, I'd appreciate it. I won't be ready to buy until April but it's never too early to start planning a big purchase. Thanx
Bank-One sent me a letter this week (18-January) which included a Used-Vehicle-Condition-Report from the Flint Auto Auction, claiming I owe $200 for a fender ding on the '97 Ford F-150 XLT Extended Cab that I traded in November 1999. Turn-in is still not due until March 2000, with 3,000 pre-paid miles left on the odo. As part of my new purchase deal, my dealer paid the remaining payments to Bank-One on 2-December 1999.
The truck was never used a work-truck, always had a tonneau cover and always (except once) was touch-free-washed-and-towell-dried so it didn't even have 'swirlies' in the clear-coat paint -- yet the 5-Jan-2K Flint Auto Auction Used-Vehicle-Condition-Report termed the condition-of-paint only "Average".
Despite being turned in with the addition of pin-striping, tail-gate protector, window drip-guards, less-than-half-worn tires, Mobil-1 care, 3-months early (all 36 months paid), 3,000 miles pre-paid, Bank One wants 2/3 of my security deposit for an above-wheel-opening front fender ding worth $200 that nobody at my dealer noted by the time it left their hands.
I need your experience:
Is this a hidden charge that is a common occurrence with leasing companies?
Are they just angry that I didn't re-lease?
Did you have a similar end-of-lease surprise?
Is this common to Bank-One new vehicle leases?
Do they treat F-150's like Corvettes or Mustangs or F-350's as far as 'normal wear and tear'?
If I had leased my new truck instead of buying it outright, do you think Bank-One would be so insulting?
What are "...body dents and scratches in excess of normal wear and tear..." in your lease experience?
My lease agreement calls for payment for "...the cost of repair or the loss in value resulting from unusual wear and tear..." however this truck was ready for the Used-Truck-Lot when I turned it in - and they won't tell me what the selling price was, or if it had the dent repaired.
My Ford dealer (Galesburg, MI) said I (!?!) need to file the dispute with Bank-One, and I'm going to wait until Monday so that I can read your replies.
Turning in a vehicle at lease end is not always a pleasant experience. From your post it looks like you turned you truck in early and the dealer made the remaining payments? If so did the dealer give you a condition/turn in report for the vehicle at the time you left it there? They should have provided you with a condition report and more importantly an odometer statement to verify exact mileage at the time of turn in. If you have any of these documents you should not be charged for any excess wear and tear unless it is listed in the turn in report. If you did not get any of these documents you could be on the hook for the charges. There are a few things to keep in mind when trading out of lease early by making remaining payments, especially if you are trading to another store than the one you originally did business with.
1. Your contract is with the leasing company, not the dealership. You are required to abide by the conditions set forth in your leasing contract. If your vehicle is returned early, it is YOUR responsibility to advise the leasing company of the turn in. You cannot always rely on the dealer. I have heard many horror stories of dealers making remaining payments for you, and keeping your old vehicle for the remaining lease term as a loaner or demo until the lease matures THEN they advise the leasing company that the car is returned. You are on the hook in this case unless you can prove when the vehicle was returned, how many miles were on it, and the condition it was in.
2. Always check with your leasing company before allowing the dealer to make the remaining payments for you. Make sure the dealer that is taking the car is an authorized return center for that leasing company, otherwise you could be charged for transport fees(remember the dealers often sign an agreement to make your payments only).
3. ALWAYS get a signed and totally competed condition/turn in report and odometer statement from the dealer when your car is turned in.
I hope I didn't scare you too much and this info helps you.
Hey all, Recently I ordered a brochure for a Chevy Camaro from their website. I got it promptly with a letter that had a GMAC Preapproved Certificate for a new 2000 model car with a MSRP of $30,000. Has anyone ever gotten one of these preapproved certificates? I don't know if it's a hook-&-bait to get me into a dealership, or if I am ACTUALLY preapproved. I e-mailed both Chevy and GMAC already and it's been a week and no response yet. If anyone has ever gotten one of these? If so please share your experience, thanx.
I feel really stupid. I've done all the research, done my monetary configurations and what not. Seen the car, drove it, everything...but...
I think I'm a little confused on the semantics of the financing process. If I get approved by my CU (which I'm applying this week) do they give me a check? Do I take my pre approved "loan amount" to the dealer, make the deal, then take the title to the CU before I can get the car? I am putting down a down payment of 5K and of course, I'm giving that to the CU I assume, but I'm kind of lost here. You got it, I'm a first time buying newbie
If you get pre-approved for a loan, they generally will pre-approve you up to a certain amount. Then they'll give you a blank check that you can write any amount up to the pre-approved limit.
When you go to the dealer, you first agree on the price for the vehicle. Then you'll write 2 checks- your own downpayment and the pre-approved blank check. For ex., suppose you agree to pay $23,000 and you are pre-approved for up to $20,000. You can write your own check for $3000 and the pre-approved one for $20,000, OR you can write your own for $5,000 and the pre-approved one for $18,000. In either case, you give the checks to the dealer, not the CU.
When they give you the "blank" check, they should also give you instructions on what to do with the title. Probably the instructions tell the dealer to send the title directly to the CU (and not give it to you).
One last thing. Credit unions probably have the most competetive rates on the open market. However, auto manufacturer's captive financing companies aren't on the open market and they frequently will have a better deal than the CU, depending on which vehicle you are buying. Don't overlook the possibility of getting financing directly from the dealer.
I leased an Alero. A month later, (we have registered the vehicle already,gotten plates, etc) We get a call from the dealership that we need to re-sign the contract because GM kicked back the contract. They were not giving the dealership as much rebate/incentive money as anticipated. To make a long story short, the finance guy and I had quite a heated discussion because I was questioning the new contract. He said either you sign the new contract or return the car. I went in yesterday and said, "Hear is the car." The Gen Mgr, said,"You MUST sign this contract." I said No. Now he is saying he is going to call GMAC on Monday and GMAC will be after me for the money lost on this deal, etc etc. They further said I would owe their dealership money for the refurbishing of my trade in. Which is, by the way, since been sold off by them. I am so soured by the entire thing that I don't even want to see the car. What would happen if I don't sign the new contract? Can I return it? They made the mistakes on the contract, not me. They are the ones who want the new contract signed. Also, a payment was due for this month. I couldn't pay it because GMAC doesn't even have a lease/account for us yet, as they are waiting on the new contract. If I return the car tomorrow, can they charge me for anything?
NurseMBH, I think that if your lease contract was never actually approved by GMAC that you aren't technically obligated to keep the Alero. However, I am not a lawyer so I don't know for certain. The main problem that you face if you decide to try and get out of this lease is the fact that the dealership physically has the car that you traded in. You will probably have a difficult time persuading them to give it back. If the dealership refuses to cooperate with you you may need to consult a lawer to see what courses of action are available to you.
I'm getting close to leasing a new car. With two days left in the month, however, dealers have been cautioning me that any numbers which have been run for me will change with the new month and will probably be more expensive. I think that they said this was do to the fact(?) that the residual value changes each month. Is there anything to this? Will this prospect cost me more if I don't act until the beginning of next month?
Hi Laurence. The old "this offer is only good through..." line is sometimes used by dealerships to pressure customers into committing to a deal right away. However, dealerships are often telling the truth when they say this. The exact expiration date of lease programs varies from manufacturer to manufacturer. For instance Nissan's lease program usually expires at the end of every month, while Chrysler and Ford's lease programs usually last for an entire quarter with the exception of minor mid-program adjustments. If you tell me which vehicle you are interested in leasing and what bank you are going to be leasing it through I will probably be able to tell you exactly when the lease program will expire. That way you will know for certain if you can afford to wait.
Thanks again Car-Man for your reply... ...although I thought I might need more time to find the right car at the right price, this morning I beleive I did just that! I began by calling a dealer from the ads in this sunday's paper who seemed to be offering seven Nissan Maxima GLEs, loaded, at below invoice price. Well I was sceptical but I ended up signing on the dotted line. After working with several dealers, the one I called today (as an after thought)wound up giving me more for less. Yes, there was the pressure to sign today because as they claimed, they "do not hold cars at this discount". Well, this was the same color configuration which I was hoping to get from another dealer however this dealers price was $500 less and included $600 more in options. I did not think that I could get much better by waiting, so after some careful reading I signed! For anyone interested, this was my deal: 2000 Maxima GLE with : Meridian Edition (side airbags, heated seats, heated mirrors...) Moonroof,w/deflector Bose sound system Floor mats Splash guards Destination fee................$24,999 Downpayment(incl.taxes&fees&licence...) .....................$3000 39mo/12k mi/yr.................$280/mo.
Thanks to all of those who provide info on these pages; you've helped to make this car search experience fun!
I am shopping for a Minivan which I will lease. In particular, I like the Voyager. I was told by a dealer that if I am going to lease it the current $1500 does not apply from Chrysler. In other words, I will not be able to reduce my Cap cost using the rebate. Is this true?
Consumer cash and lease cash are not always the same thing. In many cases manufacturers provide consumer cash that can be used on retail purchases only and not in conjunction with their special lease program. They do this because they are already providing so much lease money factor and residual value support on their leases that it would be cost prohibitive for them to allow consumers to use the cash as well. This is the case in this situation. The only lease cash that is available on the 2000 Voyager is $500 in the Detroit area.
DaimlerChrysler has an advertised lease on the 2000 Plymouth Voyager right now that you can use as a point of reference. Right now they are advertising this van for $239 per month for 36 months with $999 down and with 12,000 miles per year.
I was in an accident recently and I totaled my car. I've been shopping around for a new one, thinking honda civic, crv, volks golf. Anyway got approved for a loan up to 22,000 and was told I need loan insurance in case I die or something and can't pay off the loan. Is this for real or am I getting played.
Brianbos, just because you take out a loan on a car does not mean that you automatically have to purchase insurance as well. In fact, I would probably advise against doing so. If you are married and or have children, hopefully you have a substantial enough life insurance policy that they will not have to worry about paying your car payments if something horrible happens.
Thanks for answering my question about loan insurance. I'm definitely not going to get it. By the way I'm thinking of buying a volkswagon golf 2.0L 115HP automatic any opinions.
I am a soon to be college graduate and I am looking into purchasing a Toyota VE Sedan. I need a little advice on financing. Is it better to lease or buy? Why so? Also, what is the standard percentage for a down payment, 10%, or is it higher?
Comments
Thank you
Don't worry about that. Just try to get the best rate you can from the dealer, but I would suggest going to the dealer pre-approved from another financial institution so that you can fall back on that if the dealer's rate is not that good.
- The Merg
Car_man
Smart Shoppers / FWI Host
I got my car for $250 over invoice. I went to a website that allowed me to enter all my data -- sale price, down payment, credits, interest rate, etc. -- and it gave me an estimated monthly payment. I was $187. Armed with that info. and a packet three inches thick full of Edmunds website info. and other info., I went in to pick up my car. Thank goodness, I took my boyfriend who is very good at math/accounting. Without him I would have been in tears.
The guy prints out our lease and says the payment will be $247. Whoa! I expected him to pad it a little, but that was a bit much. Unfortunately, the lease agreements allow the dealership to be very deceptive -- mine was through GMAC. I had a $1300 GM card credit which he used to his full advantage. On the line where it said "agreed upon price of the car" he had the $19,090 price plus my $1300. Why did he do this? Well, he had to take it from there, put it here and then subtract it there. That would give us a great tax benefit. Sounds like he's trying to help us out, right? There was no way I was going to sign anything that said my agreed upon price was anything but $19,090. Looking at the lease further, I noticed no where on there does it come out and tell you what interest rate you're given. When asked he said he didn't know. Come On! "I just type in the numbers and the computers does its magic." Did he really want me to fall for that line of bull? I told him he'd better figure it out. He said it was 4.9% -- the GM promotion on a lease was 3.9%! He asked incredulously where I got such information? I said how about every dealership in America, the Oldsmobile website and my GM card. He still didn't believe me. I'm thinking I sounded like a pretty informed buyer at that point and couldn't figure out why he didn't just play it straight from that point. After trying to explain where I came up with this crazy figure of 3.9%, he huffed and puffed and said he was busy and had two customers waiting. The gall!! I was in there for maybe 15 minutes at that point. I said fine, we'd go figure it out ourselves. Obviously, his explanations were getting us nowhere. I kindly asked for a calculator and was told he didn't have one. Ever hear of a finance department without a calculator?
Totally enraged at this point, we sat down and went through it step by step. I even used their phone to call a few insurance companies to inquire about GAP insurance. It's supposedly part of every GMAC lease, but it doesn't tell you want percentage of the interest rate is for the GAP. We figured out the guy was moving around our $1300 credit so that it basically negated itself. Because he had put it in the correct spot at top where it says "other credits," he would get that $1300 from GM. He also put it under "agreed upon price of car" so he would get another $1300 from GM from that. The new interest rate of 3.9% totally changed the interest on the form, of course. The only thing left that was questionable was a "GMAC Administrative Fee" of $400. From the info. on this website, I knew I wasn't supposed to pay an administrative fee over $50, so that was something I also brought up.
Back into the finance office, after fighting our GM credit point several times -- we literally had to tell him no, you're wrong four different times when he refused to agree with us -- we ended up writing down and figuring the math right in front of him. He took the sheet, quietly typed it in his machine then on the computer and sheepishly said, "Yeah, seems to be coming out right now." Go figure. He changed the interest rate to 3.9%, but only after the sales manager supposedly called GM directly to check it because they just couldn't believe it. We also had to have him change the mileage listed. It was 200 miles off (after being driven from out of state).
The administrative fee was a sore spot. He tried to tell me it was really an acquisition fee, but I countered that administrative and acquisition definitely do not have the same definition. He couldn't really explain it. "GM makes us do it." His usual response. Craig wondered why they'd charge us a fee when the interest rate on the loan is the fee for borrowing the money. It's not like a bank charges you a fee for borrowing. He got so angry at us after 5 minutes of discussing this rather heated topic that he spun back in his chair and pretty much threatened to rip up the agreement. At this point, we were very happy with where we were and didn't want to break the deal over the stupid fee. It's a good thing too because I called GMAC the next day and they said, yes, Minnesota's average for this fee is $400. But, how were we supposed to believe this guy?
Our final price was $190 a month. Almost a full $60 less than the original price he gave us. I consider that stealing, and should be illegal. It is blatant deception if you ask me. How many people wouldn't know to ask the questions we did. And then fight for what you know is right? Buying my house was much easier and less stressful than buying this car. Maybe it was just my dealership and is not the standard, but people should still be very alert and know going in where their final price should be at -- including taxes and all that good stuff. Otherwise you'll never know if they're telling you the truth.
My lesson? Next time, I'll walk into the finance dept. more confident. I'll sit down, tell them the interest rate I'm going to pay, tell them the agreed upon price and tell them I'm an informed buyer that doesn't want to be messed with. I'll have printouts of everything. From advertised interest rates, to the invoice if you have it, absolutely everything you can think of. The info. I had was priceless because it allowed me to prove what I knew was right. Don't expect to get any help from your dealer either. We asked and he basically played stupid. I guess I didn't expect him to help. It's in his best interest to let the finance guy rake us over the coals.
I'm writing a seething letter to the dealship, because as much as I like the sales guy I worked with I will never, ever deal with the nasty finance guy again. Not only was he trying to be deceptive and combative, he was rude and anti-customer service to the core.
Sorry for the long one, folks. I hope it helps a few people.
But you said something that is simply not true - that is that buying a home was an easier more straightforward experience..well, I recently bought a home and during that process there is about $5-6 of 'fees' and whatnot. Further, the seller had a real estate agent and that guy gets about 6% of the sale price...
so, the conclusion is that buying the car WAS very EASY. It was very easy at $260 or whatever per month he quoted you. All he was doing was trying to make some $$$. Thats perfectly legal. As for being misleading, if someone could kindly explain to me even half of the fees associated with buying a home, I would really like to hear it..instead of all those fancy names they come up with, why not call it what it really is?? 'extra money the state wants plus money for companies that built their entire business on capitalizing on this beurocratic mess!!
Dealers are business people - they want to make money. Obviously, at $250 over invoice thats not enough income..so they mark up interest rates - hey retail stores have done that for years! And they would never ever tell you that its not a good idea to get that macys card with a 23% interest rate!
The ordering of a car and the financing of the car are two separate issues. Generally, it is a good idea to get financing together before you go out shopping for a car. This way you can avoid the dealer trying to get you to go with their high financing. This also allows you to try to get the dealer to beat your current rate, which they sometimes do.
As for ordering the vehicle, generally the dealer will ask for a deposit at that time and that's it. If you are going to finance through them, that is generally taken care of when you go to pick up the vehicle. It might be possible to lock in a rate with the dealer at ordering time, but they will probably want to sign paperwork that promises that you will use their financing.
HTH,
The Merg
Car_man
Smart Shoppers / FWI Host
Sorry if this turns out to be a double post.
Does anyone know of any leasing companies or banks that will pre-qualify someone.
I want to lease a Durango and want to concentrate on my price negotiations before I check the dealer lease money factor. I live in Connecticut.
TIA
Here's something a lot of readers email us about: What happens is you sign the papers, drive off and 2 weeks later they call you up to say you did not get financing, and your payments are going up $100 per month. Yes this is legal, because even though you thought it was a done deal, the fine print of your contract says "Subject To Financing". If you have questionable credit, do yourself a favor and get your financing elsewhere, and take the rebate in lieu of the low APR at the dealer. For loans under $15000, rebates at $750 or above usually beat a low interest rate. If you want to pre qualify online, try sites like LendingTree that send you offers from up to 4 banks based on your financial data. CarFinance.com will fedex you a check the day after you qualify and you just go pay for your ca with the check. Hope this helps, stop by and see us, we have plenty more good advice!
Don't forget that another way to protect yourself from the "I'm sorry but you did not qualify for the lowest rate and now your payments are $xxx" problem is to have the contract modified to say that the sale is subject to financing at a particular rate or better and if that does not happen, either party can back out with no penalty.
- The Merg
Town Hall to share your opinions and to ask
others questions related to the automotive
industry. Your post contained some useful
information, however it is not appropriate to use
this forum to advertise your personal Web Site. Thanks.
Car_man
Smart Shoppers / FWI Host
I think the line from the salesperson is bull. I believe what is really happening is that they will try to offer you better financing.
'11 GMC Sierra 1500; '98 Alfa 156 2.0TS; '08 Maser QP; '67 Coronet R/T; '13 Fiat 500c; '20 S90 T6; '22 MB Sprinter 2500 4x4 diesel; '97 Suzuki R Wagon; '96 Opel Astra; '11 Mini Cooper S
applying at a dealer they don't tell you the truth
if you get qualified for the lowest rate.If a
dealer tells you that you can't get qualified for
the lowest rate, chances are they're not telling
you the truth. I suggest you go to the Manufac.'s
website, ford, honda, etc. to find out what you're
really qualified for before signing papers. Currently Ford has a 5.9% financing for 60mos.I went to Varsity Ford PaloAlto,Ca and was offered the expedition $900below invoice. They told me I didn't get approved for 5.9%, but 23%
instead.Feeling a little suspicious, went to
Sunnyvale Ford, Ca. Applied with a co-signer
hoping to get 5.9%. After credit check, I was informed that I've already been approved with the 5.9% through Varsity Ford why reapply again ???? Ended up getting through Sunnyvale Ford with $200 over invoice plus 5.9%financing. Can Varsity Ford be sued for falsifying the app.result????? Poor
VarsityFord, they jack one person, now thousands will know about how they operate.
As u will see in the adv. the Manuf. Fin rates are lower (2.9 to 5.9%) than the various credit unions (7 to 10%). But I guess the interest rates of CU are compound and changes (reduces) over the period. But the Manf. rates are simple and fixed.
Thus they calculates the interest over the entire period and over the entire amt and we have to pay more interest in long run.
eg. for Manf rate of 5.9% and amt is $10000 for 4 yrs. u have to pay $257.00 pm.
But for 7.5% CU rate u will have to pay $241.79 pm.
This info about CU is taken for a established CU site.
Anybody interested to put more light on this issue?
Thanks.
Manufacturers' below market finance rates are a genuine incentive to buy one of their vehicles. They don't "make money" thru their loans, they make it by getting you to buy their vehicle.
Also, there isn't a big difference between simple interest and compound interest loans when payments are made monthly. However, compound interest almost always costs you, the borrower, more than a simple interest loan does.
I just finished buying a Odyssey and got worked over by the finance guy. I was prepared for the sales guy but not this guy.
To make a long story short, I have to return to the dealer and redo my finance contract because my downpayment changed. At this point can I back out of the alarm and extended warranty and the floor matts since the original contract is not valid?
Any info would be great. Thxs.
Do the finance people get commission based on the interest rate they can sock the customer with? Where does most of the gravy come from for the finance people? I received 10.85 and wonder what the true interest rate was.
Car_man
Smart Shoppers / FWI Host
Car_man
Smart Shoppers / FWI Host
APY is figured depending on how the interest is compounded. Compounded biweekly, the APY (using an APR of 6.75%) would be 6.97% or rounding off, 7.0%.
BTW, a preapproved rate of 6.75% sounds awesome. Usually, a preapproved loan helps you in bargaining wrt the purchase price. However, you are buying an Odyssey so that's not gonna happen. Congratulations on your new vehicle.
Of course, the best method by far of financing a car is to figure out how much you want to pay per month, pay it to yourself (open a separate account for this, it really helps; you can even do automated monthly transfers) for a few years, and earn the interest on it yourself, instead of losing it. But then you have to wait a lot longer....
(I got a small credit union loan for my previous car, 9 years ago. I have been doing the "pay myself" thing for its replacement.)
So, a home equity line doesn't have to go into home improvements, although, as I've said in another forum, a new car in the driveway can always be considered a "home improvement"
Tell me what you all think, I'm 23, have little
credit, and want a $25k car. I have an $8000 down payment, no trade in, and have
been working at my job for a year. I make enough
to cover the car payments/insurance plus all my
bills. Do you all think I'll have a hard time
getting financed, do you all see anything that will
hold me back? This is my first car purchase and
I'm nervous about not being able to get it. Has
anyone else been in this same situation? Do you all think I have a chance? Thanx in
advance for the advice.
The CU or bank will decide how much they are willing to lend to you. Based on what you've said, I don't see why they won't lend you what you need. If the amount they are willing to lend to you, plus your $8000 will cover the cost of the car, you don't have a problem. Make sure you know what the cost of the car actually is (you pay tax, title, in addition to car cost). Salesmen are notoriously sleazy about trying to stick you with various fees. Use this site to educate yourself on what things are negotiable and what are not.
Depending on what vehicle you want to buy, the dealer may be able to offer financing that is a better deal than the CU/bank. This site can help you learn what sort of incentives the dealer can make.
Don't let the salesman pressure you. Take your time. Make sure that you aren't so in love with one particular vehicle that you aren't willing to go somewhere else. Salesmen can smell that and will use it against you.
which included a Used-Vehicle-Condition-Report from
the Flint Auto Auction, claiming I owe $200 for a
fender ding on the '97 Ford F-150 XLT Extended Cab
that I traded in November 1999.
Turn-in is still not due until March 2000, with
3,000 pre-paid miles left on the odo. As part of my
new purchase deal, my dealer paid the remaining
payments to Bank-One on 2-December 1999.
The truck was never used a work-truck, always had
a tonneau cover and always (except once) was
touch-free-washed-and-towell-dried so it didn't
even have 'swirlies' in the clear-coat paint -- yet
the 5-Jan-2K Flint Auto Auction
Used-Vehicle-Condition-Report termed the
condition-of-paint only "Average".
Despite being turned in with the addition of
pin-striping, tail-gate protector, window
drip-guards, less-than-half-worn tires, Mobil-1
care, 3-months early (all 36 months paid), 3,000
miles pre-paid, Bank One wants 2/3 of my security
deposit for an above-wheel-opening front fender
ding worth $200 that nobody at my dealer noted by
the time it left their hands.
I need your experience:
Is this a hidden charge that is a common
occurrence with leasing companies?
Are they just angry that I didn't re-lease?
Did you have a similar end-of-lease surprise?
Is this common to Bank-One new vehicle leases?
Do they treat F-150's like Corvettes or Mustangs
or F-350's as far as 'normal wear and tear'?
If I had leased my new truck instead of buying it
outright, do you think Bank-One would be so
insulting?
What are "...body dents and scratches in excess of
normal wear and tear..." in your lease experience?
My lease agreement calls for payment for "...the
cost of repair or the loss in value resulting from
unusual wear and tear..." however this truck was
ready for the Used-Truck-Lot when I turned it in -
and they won't tell me what the selling price was,
or if it had the dent repaired.
My Ford dealer (Galesburg, MI) said I (!?!) need
to file the dispute with Bank-One, and I'm going to
wait until Monday so that I can read your replies.
Please reply at:
http://www.f150online.com/f150board/Forum8/HTML/000125.html
1. Your contract is with the leasing company, not the dealership. You are required to abide by the conditions set forth in your leasing contract. If your vehicle is returned early, it is YOUR responsibility to advise the leasing company of the turn in. You cannot always rely on the dealer. I have heard many horror stories of dealers making remaining payments for you, and keeping your old vehicle for the remaining lease term as a loaner or demo until the lease matures THEN they advise the leasing company that the car is returned. You are on the hook in this case unless you can prove when the vehicle was returned, how many miles were on it, and the condition it was in.
2. Always check with your leasing company before allowing the dealer to make the remaining payments for you. Make sure the dealer that is taking the car is an authorized return center for that leasing company, otherwise you could be charged for transport fees(remember the dealers often sign an agreement to make your payments only).
3. ALWAYS get a signed and totally competed condition/turn in report and odometer statement from the dealer when your car is turned in.
I hope I didn't scare you too much and this info helps you.
Recently I ordered a brochure for a Chevy Camaro from their website. I got it promptly with a letter that had a GMAC Preapproved Certificate for a new 2000 model car with a MSRP of $30,000. Has anyone ever gotten one of these preapproved certificates? I don't know if it's a hook-&-bait to get me into a dealership, or if I am ACTUALLY preapproved. I e-mailed both Chevy and GMAC already and it's been a week and no response yet.
If anyone has ever gotten one of these? If so please share your experience, thanx.
I think I'm a little confused on the semantics of the financing process. If I get approved by my CU (which I'm applying this week) do they give me a check? Do I take my pre approved "loan amount" to the dealer, make the deal, then take the title to the CU before I can get the car? I am putting down a down payment of 5K and of course, I'm giving that to the CU I assume, but I'm kind of lost here. You got it, I'm a first time buying newbie
Thanks in advance!
Robrt
When you go to the dealer, you first agree on the price for the vehicle. Then you'll write 2 checks- your own downpayment and the pre-approved blank check. For ex., suppose you agree to pay $23,000 and you are pre-approved for up to $20,000. You can write your own check for $3000 and the pre-approved one for $20,000, OR you can write your own for $5,000 and the pre-approved one for $18,000. In either case, you give the checks to the dealer, not the CU.
When they give you the "blank" check, they should also give you instructions on what to do with the title. Probably the instructions tell the dealer to send the title directly to the CU (and not give it to you).
One last thing. Credit unions probably have the most competetive rates on the open market. However, auto manufacturer's captive financing companies aren't on the open market and they frequently will have a better deal than the CU, depending on which vehicle you are buying. Don't overlook the possibility of getting financing directly from the dealer.
We get a call from the dealership that we need to re-sign the contract because GM kicked back the contract. They were not giving the dealership as much rebate/incentive money as anticipated. To make a long story short, the finance guy and I had quite a heated discussion because I was questioning the new contract. He said either you sign the new contract or return the car. I went in yesterday and said, "Hear is the car." The Gen Mgr, said,"You MUST sign this contract." I said No. Now he is saying he is going to call GMAC on Monday and GMAC will be after me for the money lost on this deal, etc etc. They further said I would owe their dealership money for the refurbishing of my trade in. Which is, by the way, since been sold off by them. I am so soured by the entire thing that I don't even want to see the car. What would happen if I don't sign the new contract? Can I return it? They made the mistakes on the contract, not me. They are the ones who want the new contract signed. Also, a payment was due for this month. I couldn't pay it because GMAC doesn't even have a lease/account for us yet, as they are waiting on the new contract. If I return the car tomorrow, can they charge me for anything?
Car_Man
Smart Shoppers / FWI Co-Host
and will probably be more expensive. I think that they said this was do to the fact(?) that the residual value changes each month. Is there anything to this? Will this prospect cost me more if I don't act until the beginning of next month?
Car_Man
Smart Shoppers / FWI Co-Host
...although I thought I might need more time to find the right car at the right price, this morning I beleive I did just that! I began by calling a dealer from the ads in this sunday's paper who seemed to be offering seven Nissan Maxima GLEs, loaded, at below invoice price. Well I was sceptical but I ended up signing on the dotted line. After working with several dealers, the one I called today (as an after thought)wound up giving me more for less. Yes, there was the pressure to sign today because as they claimed, they "do not hold cars at this discount". Well, this was the same color configuration which I was hoping to get from another dealer however this dealers price was $500 less and included $600 more in options. I did not think that I could get much better by waiting, so after some careful reading I signed!
For anyone interested, this was my deal:
2000 Maxima GLE with :
Meridian Edition (side airbags, heated seats, heated mirrors...)
Moonroof,w/deflector
Bose sound system
Floor mats
Splash guards
Destination fee................$24,999
Downpayment(incl.taxes&fees&licence...)
.....................$3000
39mo/12k mi/yr.................$280/mo.
Thanks to all of those who provide info on these pages; you've helped to make this car search experience fun!
It seems to me that a sale is a sale.
DaimlerChrysler has an advertised lease on the 2000 Plymouth Voyager right now that you can use as a point of reference. Right now they are advertising this van for $239 per month for 36 months with $999 down and with 12,000 miles per year.
Car_Man
Smart Shoppers / FWI Co-Host
Car_Man
Smart Shoppers / FWI Co-Host