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Any Questions for a Car Dealer?
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Yes, the guy got the $40k Jeep and a hunnert grand - plus the warranty and all the "vehicle protection products"...
The dealership got off cheap, after the guy signed a waiver of claim, and it didn't hit the press or make it to court.
The word got around really quickly about the incident, but it was spread by dealership personnel, on purpose. The GM wanted everyone in town to know that he ran that F&I guy out of town with tar and feathers.
Ahem, I think that's his job.. the problem wasn't selling more stuff than the guy needed for too much money; that part is expected.
The problem was what he said and how he said it.
-Mathias
Actually the problem was neither of those, it was when he said it.
even if it is accurate, you are still only $600 over invoice. go get your new car and enjoy.
I've had people do that with me when I was in F&I - surely doesn't happen often, but I've had people say stuff like "I HAVE to get an extended warranty and credit disability insurance - my cousin's uncle's girlfriend got hurt at work, and was disabled, and her loan was paid off...plus my aunt's boyfriend's wife lost her tranmission at 40,000 miles..."
So, what's that stuff cost? $60-80 extra a month? I'm like...uhhhhhh, something like that, lemme see....
Bwa ha ha haaaa!
I can't see any scenario where "restocking fees" would apply in a car deal, with the dealership's parts department or a stereo vendor.
On the other hand, you signed a contract and agreed to the deal, and if financing was involved, the dealership, through a lender, fronted you the $1500 - now, you want it back. It's not a payday loan....
This is like people who are cash strapped buying a car and wanting the rebate in cash of front - the dealer isn't a pawn shop, and isn't in the business of fronting you money.
Additionally, the dealer represented to the lender that your vehicle was (to be) equipped with an option that cost $1500, and was added to the loan (if financed). If they then pull the option and give you the money back, they're defrauding the lender by misrepresenting the contents of the car loan.
That's like buying a truck, having the price bumped $1000 for a camper shell/topper, getting the extra dough, but having no intention of installing the part.
It pays you nothing, pays your family nothing, only spays a lender if you die, and usually doesn't get you a lower rate either! and even if it did, it wouldn't make it worthwhile!
So it's the job of the F&I to oversell and overprice anything they can, right???
That's why I get my own financing first and do not visit "stealerships" where they put $1,000.00 mop n glo markups on every car, even before they get off the railhead trailers...
Are you sure a lender would agree to something that drastic?
I know this was a typo, sorry could not resist...
That one was funny in retrospect. They should be spaying the dealers instead!
Yes, credit life pays if you die. The idea is to not leave your wife with a $30,000 car loan balance in addition to your funeral costs. Makes sense to some, not to others, your call, your money.
Doesn't do YOU any good, because you'd be dead when the payment went out. Nice to know, though, that in my situation where my wife works part-time, making $15,000 a year, and we have a mortgage and two car payments, the only bills she'd have if I died is utilities.
And it DOES pay your family - it covers the balance of the car loan - they'd have to pay the bill, otherwise.
You're in the "Any Questions for a Car Dealer" topic - can you ease up on the stealing, lying and cheating implications?
When you drop into this topic, you're going to get feedback based on a dealer's perspective, so please keep that in mind when asking a question. If you don't want to hear what a dealer has to say, this is probably the wrong discussion for you. 99% of our discussions focus on the consumer perspective, so it's easy enough to avoid.
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The fact is that credit life insurance is THE MOST EXPENSIVE AND RESTRICTIVE INSURANCE ON THE PLANET.
You can get a good term life policy worth thousands more than what any credit life payment will pay out, the money goes to your benificiary, NOT the lender, and the amount doesn't decline with the balance on the loan (of course the "payment" on CL doesn't go down with time)...
Most folks have jobs, most of these jobs provide company paid life ins, more than enough to pay off a car loan and a LOT LESS EXPENSIVE than CL ins.
It's just a bad deal for the consumer no matter how one tries to dissect it. And I'm leery of anyone promoting it in any manner at all.
And then to attack someone who who has a low opinion of the value of the thing is no less mean than what I said in the first place.
My advice to any car buyer who is offered a credit life insurance "policy" is to politely decline the coverage. I also advise folks to run the loan amount and payment through a loan calculator (or spreadsheet program) to ensure that CL ins is not being added into the loan without being disclosed.
The pricing on these policies is heavily regulated and is based off of a 28 year old non smoking male. If a 55 year old smoker can buy life insurance for less I would love to know where.
Yes most people do have life insurance already. Let's say somebody has 200,000 worth of coverage. That same person owes 125,000 on their mortgage, 10,000 on credit cards, and don't forget that 15,000 HELOC. How much insurance is left? My math says that about 50,000 is left to go to their beneficiary. Lets add a 25,000 car loan on top of that. If your calculator is functioning you can see where I'm going here.
Now you may live your life financially different than the average person in this country, and for that you should be applauded. So maybe you don't need this coverage, but you can't make a blanket statement that nobody needs it.
Add on top of all of that, most life insurance policies have up to one year to make full payment in the event of your death. Who will make your car payments for that year until the money is released? Any credit life policy must make full payment within thirty days of your passing, which relieves your mourning family of one more burden. Just remember that one size does not fit all.
I didn't attack you at all - I said you were being mean (talking about "stealerships", indicating that anyone in the car business is a thief) and your information was incorrect, which it was.
But if anyone wants to price compare, does anybody care to post the exact costs of CL ins on a $25,000 loan for 4 years? Monthly amount please.
If anyone has those figures, I'll be glad to share what my 400,000 term life ins costs so we can compare apples to crab apples (because CL ins ONLY pays (spelled correctly this time) the LENDER, NOT the person's wife, husband, etc.)
Maybe someone would like to DECIDE what obligations to pay off with a LIFE insurance policy instead of a high priced CL policy.
And I'm NOT in the insurance industry. worked there for a few years, didn't like the "atmosphere" if you catch my drift...
Remember, this CLI is VERY similar (actually a form of the same thing) to the infamous PMI or Private Mortgage Insurance that we all hate and do not want to pay, but that lenders REQUIRE if a home buyer wants to put less than around 20% down on a house.
How many people in this forum want to pay PMI, LOVE to pay PMI, wouldn't consider not buying a house without it.... Free steak dinner at Sam Seltezers to any one who HONESTLY says they want to pay this charge (you have to come to Tampa on your own).
And no I never paid PMI either.
I didn't say anyone (or everyone) in the car business is (are) thieves, just ones who like to brag about how they took someone for CLI, etc.
CLI is just one of those things that sets me off,
so let's be cyber-friends (or at least cyber-non-belligerents) again okay?
I believe the point cadillacmike was making (correct me if I am wrong) that it is usually or always cheaper to add to one's term life, either company provided base or independently bought, than buy a separate credit insurance. The former would also have fewer restrictions, and, something I did not know, the payout of the credit insurance decreases with the balance of the loan.
I don't have any numbers on the cost of car loan insurance; you, danf1, do - correct? I recently shopped for term life, as it was cheaper to buy individually than add on to company's base coverage, so I have a rough idea about the costs, at least for my age group. Let's compare numbers, and I will be happy to retract my statement that credit life is (almost) always a bad deal.
No denying that there are cases when it is beneficial, basically when somebody is uninsurable otherwise.
Most people don't have enough insurance to bury their dog, let alone cover the $400,000 mortgage, the $65,000 in vehicles, the $15,000 in credit cards and lets not forget that $35,000 boat thats baking away in the Florida sun that they never use .. and lets be honest here, your not the best shopper in the world after what you paid for that CTS ..........
Me personally, I'm a firm believer in having some sort of disability insurance .. most folks don't have enough money to cover the month, let alone 5 months after a large accident or a major shoulder surgery like my neighbor down the street ...
Terry.
CL on a 48 month loan of $25,000 is $455.85 total or $10.50 per month. As far as being required, I'm stating an interpretation of the Fair Credit Reporting Act and Equal Opportunity Credit Act.
I was given a quote of about $20/mo for .5mil term coverage. I am a few years older than 28 on which credit life is apparently being based. This $20/month rate is only guaranteed for a year but supposed to rise gently with age if one stays in good health. 5-year guaranteed premium 0.5mil term is about $30 /month.
I am not disputing that credit life should be offered to everybody per law, nor do I have a problem with it. It is just it is very rarely a reasonable deal.
Interesting analogy. The difference is the costs and time for a lender to foreclose and resell a mortgaged property are on the order of magnitude (or two) higher than the costs of reposessing a car, so PMI is required on RE loans with below 20% LTV to protect lender's interest. Without PMI, few RE lenders would make loans without a 20% downpayment, drastically limiting the number of homebuyers (hmmm, may be that would be a good thing as values would have stayed more reasonable... may be.)
I would like to replace my vehicle and have saved a substantial amount for a down payment (80% - 90%) of the vehicle cost.
What I would like to know is where is a good place to look for financing. I don't believe the usual bank and credit union would be an option. Would lending tree be a good place? Who do the dealers use for people with bad credit?
I realize that I will pay a higher rate but would like to have a left a couple options to going into the F & I office with no idea how I could do on my own.
Just make sure that there are no prepayment penalties on your new loan and try to pay it off as soon as possible.
Some organizations can't wait to loan you money so they can get you hooked.
Not to sound negative (and I know this does) but Chapter 13's are the toughest and sometimes the worst way to go because they linger on your credit reports forever ... thats why you need to see what it all looks like before someone try's to knock ya silly on your next loan - any loan ......
Terry.
"CL on a 48 month loan of $25,000 is $455.85 total or $10.50 per month. As far as being required, I'm stating an interpretation of the Fair Credit Reporting Act and Equal Opportunity Credit Act. "
1. I tried wading through the FCRA & EOCA, can't find anything REQUIRING that someone be OFFERRED (as opposed to it being pushed on them) CLI. Anyone have the chapter paragraph or section #s?
2. Silence is consent. I see nobody who likes paying PMI which is just a specialized form of CLI. Also did not see any references to any law REQUIRING CLI (read below for details). So we're all in agreement here - It's not required (CLI) and people don't like to pay it (PMI or CLI).
3. Rates:
48 month loan, $25,000.00 CLI permiums of $10.50 per month. The quoted rate of $10.50 per month for $25,000.00 of coverage is $0.42 per $1,000.00 of coverage. Please note that this coverage DECREASES over time with NO DECREASE in the PAYMENT. And it ONLY pays the LENDER. Again it's much like PMI - actually it's the same thing. This translates into a total additional principal cost of $504.00 with interest on the $10.50 each month!
Contrast that to a group term life policy that costs $16.50 / month for $400,000.00 of coverage. I actually have a policy with that rate and coverage and I'm older (= higher rates) than a lot of folks buying cars and having CLI pushed on them.
That's $0.041 per $1,000.00 of coverage (4.1 cents!), making CLI more than TEN TIMES as expensive at the BEGINNING, where towards the end it gets to be EIGHTY TIMES or more as expensive than a tern life policy. Let's remember, too, that CLI will not pay your family, while the regular life ins pays your family so that they can decide what to do with the money.
The $20.00 per month for $500,000.00 equals a bit less, $0.040 per $1,000.00 of coverage (where did you get that rate!?!?!)
So I still think these 3 sets of numbers prove that CLI is the most expensive insurance on the planet.
I did a quick search on the net and found this at clarkhoward.com:
• Credit life and disability insurance, also known as "croak and choke," (there's that term again - MAS) is worthless.
• It protects the lender if you die or are disabled. It doesn't protect you.
• If you're concerned that your family will lose the house if you die, buy a term life insurance policy that pays your loved ones directly. They can decide how to use the money.
• Credit life insurance is far more expensive than term life insurance.
This is from the Ohio Dept of Insurance:
Credit life insurance = decreasing term insurance (note "decreasing term ins" = the benefit goes down with the loan balance. - MAS)
Credit life is similar to a special type of life insurance called "decreasing term" insurance.
• A credit life policy is issued for an amount equal to how much you owe
• As your loan balance decreases, so does the face amount of the credit life policy
• If you die before the loan is fully repaid, the policy pays the lender an amount equal to what you still owe at that time
Younger people usually can buy decreasing term life insurance for much less than a credit life policy costs. The decreasing term policy will meet the lender’s requirement for protection on the loan.
As you get older, the cost of buying regular life insurance rises. But in most cases, it is very expensive to buy a small credit life policy as a substitute for regular life insurance protection.
Must I buy credit life or credit disability insurance?
Credit insurance raises the total you owe because the policy premium usually is added to the loan amount. Interest is applied to the entire amount: the loan plus the cost of the insurance. Credit life and disability coverage can be very expensive.
If the lender requires insurance protection for your loan, you do not have to buy a policy from the lender or from any particular agent or company. Where you buy is your decision.
And, if the lender requires insurance, you may not need credit life at all — as long as you already have enough life insurance or you can purchase life insurance. The lender must accept an assignment of benefits under your life policy instead of making you purchase credit life. This means you agree to name the lender as beneficiary under your existing life insurance policy.
If you buy credit life without realizing you could use your existing life insurance, you may be able to stop your credit life coverage and get a refund credited toward the balance of your loan.
Nader.org has the same message. If fact, I could not find even one site that does not sell CLI that had ANYTHING good to say about it.
NOTE TO YOUNGER UNMARRIED BUYERS: You don't need CLI, if you die prematurely, you don't have a spouse or kids to worry about paying off the car loan. Young married buyers should go get an affordable term life policy (most employers provide some free coverage with optional additions up to 4 or 8 times annual salary).
Basically, ANY OTHER INSURANCE is better than CLI.
Seems like a pretty convincing and clear argument to me against CLI.
However, the more that people turn down this insurance, the more I will have to pay for my next car!
Damon
What is the purpose of buying term life insurance? If you want life insurance, why have a policy that expires? I like Whole-life insurance. I pay a set amount for 20 years. In about 6 years, I'll have a paid up policy that continues to grow (earns dividends) and lasts until I drop over. It's enough to pay for the hole, box, and prayer. It'll pay my debts and leave enough left over for a dandy party for my beneficiaries.
So you maybe correct that I dont have to offer it to anybody at all. But if I do then I must make it available to everybody. If I don't offer you life insurance on your loan and you pass away while there is a balance on that loan, your family can sue my dealership.
Sure, most people could probably get a policy covering them for less money than what it costs here. Remember that I will not require a physical, ask if you are a smoker or what your occupation is as none of those will affect the cost of the insurance. The main problem is that even though most people can get a policy on their own, once they leave my office they usually will not. It's similar to somebody telling me that they'll be back to purchase the extended warranty that they passed on today. Not that it never happens, but it is very rare.
And as a side note, the $10.50 per month included interest charges at a 5% rate.
2) Good luck with your assumption that your policy will be paid up in six years.. This doesn't happen very often.
3) Once I reach retirement age, and am living off my savings, I don't need life insurance. My pension pays the same to my wife after I'm gone, and the loss of SS benefits will be more than offset by the removal of my personal expenses.
Whole life vs. Term life is an old argument.. There are positives and negatives to each..
But, there is one fact.. Insurance agents make higher commissions off of Whole Life.. Infer what you will...
regards,
kyfdx
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I know a 13 is difficult but I had no unsecured debt. To be honest it was a tax issue and the government wanted their money.
Like it was mentioned above I can pay cash for the vehicle but that does me no good when it comes to rebuilding my credit. I have added 0 debt in the bankruptcy period and now have freed up 700 a month that I was paying to the bankruptcy. I would like also to maintain a little money in savings "just in case" so I still believe that financing the minimum that they allow would be my best bet. most are saying between 6000 - 7500 is the minimum that they will do.
Terry I know the bankruptcy is still on there and will be for at least 4 more years but I was wondering if there is a lender that is better to work with. If worse comes to worse I will pay cash.
"2) Good luck with your assumption that your )whole life) policy will be paid up in six years.. This doesn't happen very often. "
This NEVER happens. I used to work for insurance companies.
Excellent points all around kyfdx!
So you maybe correct that I dont have to offer it to anybody at all. But if I do then I must make it available to everybody. If I don't offer you life insurance on your loan and you pass away while there is a balance on that loan, your family can sue my dealership."
That's probably a correct interpretation on the act. If you offer to one, you have to offer to all. I didn't realize that you were in the automotive sales industry. But that said, it doesn't need to be pushed on people. Also, I don't think a lawsuit will get very far on those grounds - but I'm not a lawyer (me hates lawyers).
"Sure, most people could probably get a policy covering them for less money than what it costs here. "
A LOT LESS
"Remember that I will not require a physical, ask if you are a smoker or what your occupation is as none of those will affect the cost of the insurance. The main problem is that even though most people can get a policy on their own, once they leave my office they usually will not. It's similar to somebody telling me that they'll be back to purchase the extended warranty that they passed on today. Not that it never happens, but it is very rare. "
If I understand CLI, it is all GROUP rates, no individual data is considered. That doesn't make it any less expensive though........
Lastly, anybody who is married SHOULD have SOME regular life insurance. Uunmarried - you DON'T need it.
Violate this maxim at the future peril of your loved ones!
Again, I'm not in the insurance or car industries (in case some folks didn't read the big blurbs).
Me personally, I'm a firm believer in having some sort of disability insurance .. most folks don't have enough money to cover the month, let alone 5 months after a large accident or a major shoulder surgery like my neighbor down the street ... "
The wind blew the cover off my boat and the rain fried my 10 year old sears battery charger!
Yeah, I have relatives who can't afford to bury their dog poop, let alone the dog so I know what you mean. Guess who they're going to come running to?!?!?!
Most decent employers offer some sort of disability insurance as an employee benefit, That's good, (and it worked for my wife in the past) especially since individual disability insurance is almost as expensive as CLI!
At least my wife having the CTS lets me drive the convertible all the time now! And i wasn't offered CLI (should I sue the dealer ;-) ).