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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