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Car finance fuckery

closetohumping
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boilerhorn

boilerhorn 1375

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With the payment the same, the $$ out of pocket - if held to the entire term - will be the same.  

Definitely check the numbers or the contract.  You may have paid more for a lower rate.  Doing some quick calculations on my own...  Just examples...

Assuming a 5 year term, $30k at 8% is the same payment as $31.5k at 6%.  In the 30/8% case, you'll owe less over the first 3 years if you choose to sell during that time.  At the very end of the term, you'll have paid the same amount.  However, on the 8% loan, you'll have paid around $1450 more in interest overall.

The math is straightforward w/ a spreadsheet, so definitely Do the math.

Personally, I would want to understand what motivated the seller/dealer/finance-co to change the terms of the contract w/o your consent or knowledge.  That part worries me. 

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closetohumping

closetohumping 17439

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1 hour ago, Doc Daneeka said:

If I’m going to pay the loan out to the end and the months and payment are the same, I’d just roll with it. 

If I might pay it off early, I’d want to know why my principal is higher. 

I know.  Sometimes you just pick your battles. I was just taken aback.  Like wtf.

 

It's Tesla btw.  And I know they've been taking hits on their price drops.  This is their way of managing I  guess?

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locodos

locodos 5387

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4 hours ago, closetohumping said:

Just finances a new car. Everything was done online.  Just for a letter from the finance company that said the dealer corrected some numbers.  Sale price is higher but interest rate is lower. Payment the same.  Has this happened to you and what should I do?

https://jalopnik.com/what-to-do-if-a-car-dealer-says-they-made-a-mistake-on-1795217709#:~:text=Tell the dealer that if,how it was a mistake.

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Gil Bang

Gil Bang 25944

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4 hours ago, closetohumping said:

Just finances a new car. Everything was done online.  Just for a letter from the finance company that said the dealer corrected some numbers.  Sale price is higher but interest rate is lower. Payment the same.  Has this happened to you and what should I do?

Higher purchase price = higher sales tax and registration fees

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Doc Daneeka

Doc Daneeka 6769

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45 minutes ago, Gil Bang said:

Higher purchase price = higher sales tax and registration fees

But the lower interest rate kept the payment the same. 

Sounds vaguely like an accounting sleight of hand to make revenue look better, but I haven’t thought about it much. 

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Texzilla58

Texzilla58 4733

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I would go down to the dealer prepared to hand them the car back. Wtf? Sounds to me like the dealer got a lower rate from the finance company, and then jacked the price to keep you at the same note. They should keep your lower price as contracted and the new lower rate. Otherwise go straight to the general manager over the G&T guy. The dealer would need you to come in and sign a new contract, and the finance company would require that. Sounds like an F&I guy playing games and fucking people.

Did you negotiate to a payment vs the price of the car? That’s not the way to do it. Technically you have no contract: call the finance company and let them know you didn’t approve any changes then go down there. They will revoke the funding of the loan until it is approved.

I used a contract error to return an Acura years ago. The dealer, I found out before they called me, sold to me as new a car they sold to a dude who then died the next week in the car. They told me it had been a demo. I refused the new contract and handed them the keys.

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Gil Bang

Gil Bang 25944

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6 minutes ago, Texzilla58 said:

I would go down to the dealer prepared to hand them the car back. Wtf? Sounds to me like the dealer got a lower rate from the finance company, and then jacked the price to keep you at the same note. They should keep your lower price as contracted and the new lower rate. Otherwise go straight to the general manager over the G&T guy. The dealer would need you to come in and sign a new contract, and the finance company would require that. Sounds like an F&I guy playing games.

Sounds like you didn't read OP

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C-Man

C-Man 27214

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49 minutes ago, Texzilla58 said:

Did he do the entire transaction online? I read it as he set up his financing online. Either way it’s an issue and someone is playing games.

It's Tesla. Isn't the entire transaction done online?

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choripan

choripan 790

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This sounds like the dealer fucking the finance co since the dealer isn't getting an origination payment for organizing financing, which is often in the hundreds of dollars (can be flat or percentage based and is a big reason why dealers "shop around" your financing application. Piggybacking off the example above, and supposing a wholesale cost of $28.5k and the dealer gets an origination payment/commission of 1%:

$31.5k @ 6% =  $3k in profit (the diff between wholesale @28.5k/retail)

$30k @ 8% = $1.5k in profit

Now suppose you financed through them and got a 1% origination and, say, $200 for every percentage point for marking up the interest rate from a base of 6%.

$30k @ 8% = $1.5k in profit on the sale + $300 for origination and another $400 for marking up the rate two percent, for $2.2k in profit

As you can see, they have a variety of ways to structure things to maximize their profit. In this case, it seems like they pushed to maximize their front-end gross but take away finance profits from the lender. Kinda surprised the lender allowed it, TBH.

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Dbeasy

Dbeasy 15047

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20 hours ago, locodos said:

oh my sweet summer child

https://www.npr.org/2023/02/04/1152932192/yo-yo-car-sales

 

20 hours ago, locodos said:

https://jalopnik.com/what-to-do-if-a-car-dealer-says-they-made-a-mistake-on-1795217709#:~:text=Tell the dealer that if,how it was a mistake.

Car dealers are the worst scum on the planet. I despise them all and actively root for their death. 

To help protect myself from their bullshit, I:

1. Pay cash for all cars. 
2. Have a backup plan for poor trade in quotes. 
3. Never negotiate in person, always via email. 
4. Always negotiate with 4-7 dealers simultaneously.

5. Know every feature and package available on the vehicle to sniff out apples vs oranges quotes.

6. Never talk payments, only out the door price. 

7. Pay close attention to any supposed “mistakes” or miscommunications while negotiating. Anyone who isn’t completely upfront and honest gets tossed. 

I end up buying cars from the same two or three dealers that have integrity and stay away from the others who are pieces of shit. 
 

 

Edited by Dbeasy
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locodos

locodos 5387

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25 minutes ago, Dbeasy said:

 

Car dealers are the worst scum on the planet. I despise them all and actively root for their death. 

To help protect myself from their bullshit, I:

1. Pay cash for all cars. 
2. Have a backup plan for poor trade in quotes. 
3. Never negotiate in person, always via email. 
4. Always negotiate with 4-7 dealers simultaneously.

5. Know every feature and package available on the vehicle to sniff out apples vs oranges quotes.

6. Never talk payments, only out the door price. 

7. Pay close attention to any supposed “mistakes” or miscommunications while negotiating. Anyone who isn’t completely upfront and honest gets tossed. 

I end up buying cars from the same two or three dealers that have integrity and stay away from the others who are pieces of shit. 
 

 

To help protect myself from their bullshit, I:

1) Never buy a car from a dealer

If there's a car that I want, I just poach a clean one that's coming off a lease.  Either at the big fleet auctions or online market place.  Even the weirdest rando is 2x> than the best car dealer.  The last car I bought from a dealer was through a broker 20+ years ago.  The ENTIRE auto industry is rotten to the core, but they have amazing political clout, so the fuckery continues unabated.

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Dbeasy

Dbeasy 15047

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3 minutes ago, locodos said:

To help protect myself from their bullshit, I:

1) Never buy a car from a dealer

If there's a car that I want, I just poach a clean one that's coming off a lease.  Either at the big fleet auctions or online market place.  Even the weirdest rando is 2x> than the best car dealer.  The last car I bought from a dealer was through a broker 20+ years ago.  The ENTIRE auto industry is rotten to the core, but they have amazing political clout, so the fuckery continues unabated.

Ooh this is interesting. How do you find/participate in these? I could see myself doing that. 

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locodos

locodos 5387

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3 minutes ago, Dbeasy said:

Ooh this is interesting. How do you find/participate in these? I could see myself doing that. 

 Rental fleets and cars coming off lease are sold at auction all the time.  This is where dealerships get rid of trade in they don't keep in inventory.   

https://www.manheim.com/

 

You can pay a broker (which technically has a dealer license) a fee (~ $500) and they will buy/bid on the car for you. 

Find a decent broker and it's easy.   You just have to know what you want and be patient.

 

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immamac

immamac 42839

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6 minutes ago, locodos said:

 Rental fleets and cars coming off lease are sold at auction all the time.  This is where dealerships get rid of trade in they don't keep in inventory.   

https://www.manheim.com/

 

You can pay a broker (which technically has a dealer license) a fee (~ $500) and they will buy/bid on the car for you. 

Find a decent broker and it's easy.   You just have to know what you want and be patient.

 

This is the way. Luckily my dealer actually plays this role for me because we pre negotiate everything and then the hunt just begins. Sometimes it takes 1 weeks sometimes it takes 5 months. 

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Sandman

Sandman 3403

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3 hours ago, Dbeasy said:

3. Never negotiate in person, always via email. 

I've tried this and it never works. They all reply to my email with some variation of "You have to come in person and see the car before we talk pricing". When I balk, they say "Oh well" and that's the end of it. They don't even write back after a few days to see if I'm still interested. Maybe it works better in a larger metro area that has more dealerships?

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PilotsError

PilotsError 2287

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On 7/26/2023 at 10:54 AM, Sandman said:

I've tried this and it never works. They all reply to my email with some variation of "You have to come in person and see the car before we talk pricing". When I balk, they say "Oh well" and that's the end of it. They don't even write back after a few days to see if I'm still interested. Maybe it works better in a larger metro area that has more dealerships?

 

or everyone who says they do it are all lying.

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HornOnTheBayou

HornOnTheBayou 8921

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I've done negotiations through email for the last three cars I've bought. The sales rep will sometimes try to call me, but I won't pick up and I will send an email to remind them to please only email me. I live in Austin, so I contact all the dealers in Austin, Waco, San Antonio, and Houston (a bit of a drive, but I can turn it into a visit to the parents). 

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conVINCEd

conVINCEd 21469

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3 minutes ago, HornOnTheBayou said:

I've done negotiations through email for the last three cars I've bought. The sales rep will sometimes try to call me, but I won't pick up and I will send an email to remind them to please only email me. I live in Austin, so I contact all the dealers in Austin, Waco, San Antonio, and Houston (a bit of a drive, but I can turn it into a visit to the parents). 

Why did you give them your phone number?  They shouldn’t have your phone number until late in the game.

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HRSchenker

HRSchenker 2268

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2 hours ago, HornOnTheBayou said:

I've done negotiations through email for the last three cars I've bought. The sales rep will sometimes try to call me, but I won't pick up and I will send an email to remind them to please only email me. I live in Austin, so I contact all the dealers in Austin, Waco, San Antonio, and Houston (a bit of a drive, but I can turn it into a visit to the parents). 

How do they know you're not Tim Dillon doing a fake business bit?

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