can anyone tell me what tricks car salesman use when financing a car?

Answer 1

When I took finance from the garage, they put on an arrangement fee and at the end I had to pay a settlement fee. Both of which were in the small print though I missed them since I did not spend 2 hours going through it with a fine comb.

These two fees came to about £500 and meant I would have been cheaper going to the bank for a loan, even though it was £11 more a month

Answer 2

Quite few "tricks" that are all above board, so you are not always immune from little catches even with a "repuable" dealer.
One favourite is to say "Oh, we can offer you finance on that no problem"
Of course they can through a finance company they use all the time, thus reaping a benifit in commission etc.
Always check arranging your own personal financing first.
Be also wary of 0% finance for the first year, we will thrown in the insurance, and fit satnav etc.
It will all be legally disguised in the tiny print, and the ultimate cost to the vendor will be built in, so eventually you are paying for that. Tedious, but worth reading through.
Naturally, accepting a deal from a major dealership on a new car is a totally different thing to buying a £1k "get me about" from a small private forecourt, where generally I would not sign anything except transfer of ownership.
The motor trade these days is mostly harmless, but never accept the first suggestion, and always haggle.

Hope that helps a bit, all the best,
Bob

Answer 3

"Tricks" are not that relevant since lending, whether by your bank, a credit union, or arranged by the dealer is controlled by federal "truth in lending" laws. Your finance contract will disclose the selling price, the amount financed, any down payment or rebate, the annual percentage rate, the term in months, the total finance charge, and the total of all payments. Your task is to arrange for the lowest rate possible given your situation, i.e. your credit rating, the amount you're financing, your equity position, the age of the vehicle, etc. Shop around at banks, credit unions, and let the dealer give it a shot as well. Their indirect lending relationships can sometimes allow them to offer you a lower rate than what may be offered at a bank branch. Again, it's all what you make of it by shopping and being aware of what you sign. Also, 0% apr, when offered by the manufacturers, is just what it says - - NO finance charge, which is great when it is offered and when you qualify. That's an easy one, just take the total amount financed and divide by the term to get your monthly payment. You are doing the right thing . . . .research, shop, negotiate, and be aware of what you are signing.

Oh yes, the comment from one of the others about "being careful" because dealers say they will pay off your trade and then roll that payoff into your new loan is true, however, that is standard procedure. When dealers state "we'll payoff your trade" it is literally a true statement . . . . they issue a check to your current lender to pay off your trade in order to clear that indebtedness and secure clear title to the vehicle you are trading. Since many owe more on their car than it is actually worth in dollars, they are walking around in a negative equity situation and, barring putting down a large down payment, there is really no other way. It's not a "trick", however. You can't trade your vehicle unless you have an unencumbered title and how do you do that? Either you send a check for the payoff and walk into the dealer with your title in hand (got cash?) or you roll that amount that's currently owed into your new loan. Not the best way to gain equity, of course, but if you really want that new car . . . . . . . .

Answer 4

Hi Gaz,

Visit the link below for some common car scams.

Also, be wary of a salesperson asking you how much you want your monthly payments to be. Don't divulge this info, just negotiate the price and then the financing terms,

Be careful as well if you are trading in a car or truck with a lien, if they claim they will pay this off it often times ends up back in your contract, they simply add this amount to the new financing arrangements.

Know your credit score before you start shopping, a common scam is an original agreement based on your score, then they call you back and say you weren't approved based on your score and attempt to get you financed with a higher rate.

Best bet, finance through a credit union.

Read the contract carefully before signing, look for "Arbitration Clause" that states if you are dis-satsified you waive your right to sue.

Jerry Christopher
http://www.usedcarwise.com

Answer 5

We bought a new car from a dealer, so we filled in all the forms etc and "the financial advisor" said he would inform us of the credit decision later that day.

So we thought fine and went home. Later that day we got a call saying we had the finance.

When we got the car and the first payment was due, they claimed they never recieved it.

When we looked back on the paperwork our bank details were removed and different ones put in.

To this day we never knew where the first payment went the dealer admitted liabilty and the guy was sacked

but i wonder how many other people he got money out of.

Answer 6

Everything that comes out of their mouth is aimed at you signing the dotted line.
Biggest mistake ever, you should never get finance on a car. You loose so much money it's ridicculous. Just buy a second hand car that you can afford. Trust me you loose thousands while they laugh all the way to the bank.

Answer 7

all the tricks in the book and some!! have a search around on the net

Answer 8

Try :

whatcar.com
help and advice :
-finance
-how a showroom works
-how to haggle

I hope this helps.

Answer 9

dont get it, get a bank loan to buy the car

Answer 10

anything to get you to sign on the dotted line