Did you recently take on (or consider) a loan of 84 months or longer on a car purchase?
A reporter would like to speak with you about your experience; please reach out to PR@Edmunds.com by 7/25 for details.
A reporter would like to speak with you about your experience; please reach out to PR@Edmunds.com by 7/25 for details.
Options
Any Questions for a Car Dealer?
This discussion has been closed.
Comments
The finance reserve.. That is what the dealer is paid for writing the loan... The higher the rate, the bigger the reserve..
If you pay off the loan in the first 90 days, they chargeback the finance reserve.. and, the dealer has to give up the profit from writing the loan..
Edmunds Price Checker
Edmunds Lease Calculator
Did you get a good deal? Be sure to come back and share!
Edmunds Moderator
Bingo.!
Terry.
I thought is was more likely that GM was out the grand and the dealer would lose a few hundred extra on the deal for financing me.
There was a simple way for GMAC to get their money back - match the 5.5% that I can get from USAA. Then there is no incentive for me to refinance.
Yeah, and Mick Jagger called me last night and put me in the band .... thats 325+ units a month, the largest Hyundai/Kia/VW/Subaru/Acura/Honda/Mazda dealer in the country hasn't gotten even cloooose those figures and they have lots of time to do it ..
I can't believe this has even grown the legs it has and received as much coverage (must be a slow news week) everyone thats "in" the business just scratches their heads and laughs .... whats next, Martian Motors..?? (only in red, thank you)
Terry.
Take off those dark sunglasses and get some eye drops .. thats what Kyfdx posted ..
I bet if it came out of your paycheck you wouldn't be posting that .l.o.l..
Terry.
MODERATOR /ADMINISTRATOR
Find me at kirstie_h@edmunds.com - or send a private message by clicking on my name.
2015 Kia Soul, 2021 Subaru Forester (kirstie_h), 2024 GMC Sierra 1500 (mr. kirstie_h)
Review your vehicle
Terry
I'm looking to move to Florida within the next five years or so. Tell me more about that property.
He has a "HUGH" moniker as his tag line in all his advertising. He owns quite a few auto stores. He started with one small store in Adams NY. and now sells many brands.................
He just bought himself a new jet recently !
I ask those questions because I have heard some dealers compute the balance of the loan is a strange way.
Assume you are borrowing $20K and your payments are $400 per month. Assume you would pay $1200 interest over the life of the loan.
Some dealers might figure that, since you will be paying $1200 interest, the first three payments are used to only pay the interest.
After three months of paying $400, the interest over the life of the loan will be paid off, but you would still owe $20K. That means you will have paid $1200 for nothing.
I suggest you get the answers to the questions I posed in the first paragraph.
The loans you refer to... That used to be called the "Rule of 78s".. And it was onerous.. The last loan I took out that had that provision was in 1982. It raised my payoff by $400 over what a simple interest loan would be, when I paid it off two years later..
I doubt a loan through a captive finance arm would have a pre-payment penalty, but you never know.. Either way, the interest difference over 90 days would be minimal.
And, in this instance, the buyer was actually worried about the dealer losing money, not them losing their rebate... How noble!!
regards,
kyfdx
Edmunds Price Checker
Edmunds Lease Calculator
Did you get a good deal? Be sure to come back and share!
Edmunds Moderator
I also never hears of GMAC charging a "processing fee" to process a payoff. That's more along what a home morgatge company might do.
I think no one ans answered the original poster's question as to eactly how much the finance resever is on such a loan. Anybody care to hazard a guess or provide a formula?
Looks like USAA is raising its rates again, it was in the low 4's earlier this year. Good lick with the purchase.
To be honest, I'm only worried about the dealer losing money because these are the only local guys available if I have any warranty issues. The next closest reputable dealer is over 90 miles away. I don't want to get into a spitting match with them over lost money.
However, if it comes down to them losing a couple of hundred in extra profits and me paying several thousand in extra interest, I know which I choose.
How much will you owe after three months?
Rule of 78 is a built-in prepayment penalty!
If I where to refinance immediately, at 5.5% (payments of 408.45/month) and make the same payments, I would owe $24114, but would have paid about $77 more.
Is that what you wanted to know, bobst?
1) The folks who you are wanting to refinance with should be motivated to help do some of the legwork to make sure everything is on the up and up (you aren't breaking any contracted agreements)
2) The service department is MOST definitely a completely separate entity. The dealership wins NOTHING if you take your vehicle 90 miles away for service. Not even the sales dept. If you will at least keep coming in for service, you will probably give them a chance for your next vehicle
3) Someone from the manufacturer may be able to walk you through the logistics...check out their website...look for a 1800 number...they get questions like this all the time.
Hope that helps.
Based on the first set of numbers, I computed that you were paying about 7.5% interest, which is reasonable, I guess.
Based on the second set of numbers, I calculated that you would be paying about 5.5%, which is what you stated. Therefore, I don't think they are trying to screw you.
Hope you like your new car. We love the one we bought last week.
I never thought they were trying to screw me (though I was extremely careful going over the paperwork of the loan, looking for "gotchas").
I've decided that I'll call GMAC when I get my account number and ask them to change the rate so we don't have to refinance. If they won't, then we will probably go with USAA right away.
Fast forward to today. I notice that the tire that had the nail in it had another nail -- one that looked just like the first nail. I wanted to see how good it was in, and low and behold, the nail comes out and the tire goes flat. I think it was in there prior to delivery.
So I call the dealer, and find my way upto the GM. I mention that I am currently not satified, given the nail and the rattle. I specifically mentioned the satisfaction survey. He askes what can he do to make me happy with my purchase, to which I responded, 1) a new tire (not a repaired tire), and 2) fix the rattle.
Was I out of line for mentioning the survey? I do not think my demands were unreasonable.
Oh...this is a Subaru Forester LLBEAN, not Jolie's titanic
If that was you, and the call made it to me, the salesman would be following you home .. "if" ya know what I mean .... and using the survey is just fine.!
Terry.
Is this pick on me day?? LOL, my truck is behaving, has been out of the shop for almost a week now. Put 200 miles on it today and enjoyed the heck out of my truck.
I *want* to be reasonable. The dealer is by far the most convient one to my house and office. (it is across the street from my office). And, I did not shop all over town; I accepted the 'internet' price. By the paperwork which I saw in the F&I office (I was not supposed to see it, but I can read upsidedown), the profit on the car was $700.00, so they made decent money on the car.
However, I can not accept bad tires. And, clearly the car should not have been delivered with nails in the tires. I suspect the problem was that no one inspected the tires.
And, for the record, the last 5 new cars I purchased (over 10 years), this is the first one to have any issues before 20000 miles, and that included a ford taurus.
Bet you won't do THAT again!
Never heard of such a thing.
????
Manamal, are you really considering going back to the dealer and asking them to remove the stone chips stuck in the treads of your tires?
Happy Easter to you!
Manamal, I knew a person who had a nice Ford Torino in the 1970's. It got a little tear in the upholstery, so he traded it in for a new car. Very soon after, he got rear-ended.
I told him it was God's way of telling him he should not have traded in a perfectly good car.
Manamal, maybe the little problems you are having is a subtle messgae from Above. Your lovely Camry should have been treated better and given more respect. It had served you well, but by trading it in so soon you upset the cosmic order. That is why nails appear out of nowhere.
If you see the errors of your ways and repent, your new car will be wonderful.
I think the only issue with the pieces of stone is they could have visually masked any other nails.
As for the bad Carma (sic) thing, you never know....
?????????
The presense of a nail in a tire would not cause me or most people to look for other nails. I suppose that would have been a good idea but the chances of multiple nails is pretty slim unless the car was driven through a construction site or something.
And, bobst...that was funny!
As I think about it, it is *possible* that I picked up the nail my self, but it is unlikely as I tend to pick up 1 nail every 3-4 years, and I did not go anywhere near any spot where I would be likely to pickup the nail.
I am not really angry at the dealership over the nail; nails happen. And they may have just forgotten to inspect the tire. At least Forester's come with full size spares.
My main question was if my actions were reasonable, and you and Terry agree that they were reasonable. As I said, I am trying to maintain a good relationship with the dealer. I chose the dealer based on factors other than price.
I have to address this, and I'm not dogging you, but it's ironically funny after spending a few years in the tire and service business..
"it is unlikely as I tend to pick up 1 nail every 3-4 years, and I did not go anywhere near any spot where I would be likely to pickup the nail"
A nail doesn't care how often you pick one up - it could have fallen off a construction truck, or from an SUV leaving Home Depot. You don't have have to be cruising construction sites to find a nail, it can happen anywhere. Heck, a few years back, I had a flat tire that was caused by a 6mm allen wrench (4" long).
There were many times that after figuring out what caused a flat tire, people were personally offended that, and although a nail is an inanimate object with no hatred or prejudice, the nail would seek THEIR car out, as if following through with a mafia vendetta.
So many people completely ruin the "new car experience" by getting upset over such minor things - we're almost to the point of bring CSIs into the investigation to see if the "dealership conspiracy" theory is accurate.
Lighten up, enjoy your new car.
If it was any tire other than the one I had asked them to check out, it would not bother me. There was a nail in it before delivery. I asked them to check out the tire. They apparently did not. Even so, it is just a tire! And the dealership does seem to be 'taking care of me'.
I do not think I complained about the dealer too much. Maybe I did. My main purpose in posting here was to find out if my approach in dealing with the dealer was reasonable.
Now, back to the RWTV flame war....
My point is if rear, you probably drove over the nail lying on the road and it flipped up and was in position for the rear tire to bear down on it and push it in. Think where you might have driven near construction areas. Pickemuptrucks driven by workers often have loose stuff rolling out at end of the bed as they leave (or arrive).
If in front tire, think back to when you followed a truck on a higher speed road; they often flip up stuff with their wide tire swath and I roll over it and it sticks in the front tires.
I can often determine when or where I got the nail that way. I used to live in an area with lots of home and business construction. Picked up 4 nails in one year. Michelins never seemed to accept nails for me till I moved there.
Other nails have been in front after trips where I stayed behind semis in right lane at comfortable speeds.
Dealer _probably_ didn't overlook nail. Go enjoy your car. I'd keep the tire with two plugs on front mosts of time and buy new ones early. I've never liked plugs and patches. Repair guys usually check all of tread when repairing mine and check other tires on car while it's on the lift.
Go enjoy your car. I'd keep the tire with two plugs on front mosts of time and buy new ones early. I've never liked plugs and patches.
2014 Malibu 2LT, 2015 Cruze 2LT,
Seriously, though, I appreciate the comments and suggestions. Perhaps I did over react.....
MODERATOR /ADMINISTRATOR
Find me at kirstie_h@edmunds.com - or send a private message by clicking on my name.
2015 Kia Soul, 2021 Subaru Forester (kirstie_h), 2024 GMC Sierra 1500 (mr. kirstie_h)
Review your vehicle
Darn Ultra Right Wings on Cars.
That'll teach you not to drive through the tool corral at Home Depot again!!