drop off his pay stubs & had him sign a new contract at 24.99%. They said it was because of his credit, but they did a credit check the night we bought the car. Why didn't they see it that night if it was so bad? Yes the loan was only in his name & he already signed it, so not much we can do at this point, but I am upset that it changed so drastically. Do they always do this? BTW, my credit is worse than his, so I was excluded from the loan...
2007-12-03 06:25:10 · 21 answers · asked by ♥bigmamma♥ 6 in Business & Finance ➔ Credit
Auto finance is what I do for a living and this is called a "spot delivery" this is where some dealers go ahead and sign the customer to what they think they can get done instead of waiting until they have the actual approval.
The reason they do this is to take the customer out of the market and keep them from going to another dealer to buy.
Then the next day when the get the actual approval they must get the customer back in and re-sign them to match the approval.
I don't do this, but I have worked for dealers in the past that did this almost every weekend.
I need to explain something to the people out there that keep saying dealers must honor contracts even if they are wrong.
The thing that most people do not know is if a customer signs the paperwork at the dealership the dealer has 72-hours to back out of the deal. If the customer signs the paperwork anywhere else but the dealership the customer has the same 72-hours to changer their minds. This is called "The right of refusal law" and is legal in all 50-States.
2007-12-03 06:29:31 · answer #1 · answered by ? 7 · 12⤊ 2⤋
Yes, this is legal and happens occasionally. Contrary to some opinions (see above) the dealership doesn't A) know what rate you'll be approved for and B) doesn't do this 99% of the time. I know. Your interest rate is based solely on your credit performance and worthiness to a new lender. It includes your risk factor, the structure of the deal, and the dollar amount and term you're looking for. There are other factors, but we needn't get into them here. Here's what you can do. You signed a contract for a specific loan amount, term, rate and payment. If the dealership is unable to secure financing for you at THOSE EXACT terms YOU ARE NOT CONTRACTUALLY OBLIGATED TO THE CAR. Just take it back, get your trade in, and move on. But if you really like the car, tell them that the rate is fine (if you're ok with that) but you'd like a discount to keep your payments the same. Belive me, the goal of the dealership is to keep the car on the road and now the power (so to speak) is in your hands. You cannot be "forced" into signing a contract you don't agree with. And they can't "change" the contract you signed. So, if you've fallen in love with the car, work with the dealership. If you don't care, and you just want your payment where it was originally, take the car back and look elsewhere. Regardless, if they cannot meet the terms of your signed contract (which you have a copy of, right?) then you don't own the car. One option the dealership has, though, is that if you flat refuse to budge on the terms of your original contract (which you should do) is "buy-down" the rate and amount to make that original contract cashable at a bank. The dealership doesn't want to do this b/c it costs them a lot of money. The ball is in your court.
2016-04-07 06:00:57 · answer #2 · answered by Anonymous · 0⤊ 0⤋
The person who gave you the "Inside" information is correct.
I have purchased a car over a weekend and then decided I just wasn't happy with it. I took it back to the dealer and told them that I was aware of the law regarding this matter. They reluctantly took the car and the contract was void. I am proof that this can be done if you choose to do this. If not, then keep the car and make all payments ON TIME. Doing this will greatly improve your credit rating. Sometimes you have to "buy" back credit. That's why the high interest rate. If your credit is really bad, this interest rate will be basically the same regardless where you purchase a vehicle. The dealerships, like all other financial institutions will go by your FICO scores. The lower the score, the higher the interest rates. Your goal should be to get your FICO score as high as possible.
Good luck to you.
2007-12-03 09:24:42 · answer #3 · answered by ? 6 · 3⤊ 0⤋
Don't get too upset about the people that are freaking out about this. Some of us don't have a choice.
I got a car loan at 19% one winter. My other choice was to walk to work in 10 degree weather. What are ya gonna do. Also, not everybody can get a car loan at under 10%. Some of us are lucky to get a car loan at all. Also, BigM nor her hubby are STUPID. They are working and raising kids in a country that could care less what interest rate the car dealer gives them. They need a car, and that was their choice. It was the same choice no matter which car dealer they went to and they didn't feel like hearing the laughter at the bank. So people need to lay off and realize that this is the way it is for MANY of the people in the U.S.
Probably the first contract that he signed had the small print that they can change the interest rate anytime they want to. We are at the mercy of the banks.
Congress needs to act now before we litterally become slave to large foreign owned banks. This kind of thing used to be called "usery" and was a serious crime. This was all changed under Bill Clinton and they are pretty free to do whatever they want.
2007-12-03 14:49:06 · answer #4 · answered by ∞ sky3000 ∞ 5 · 1⤊ 1⤋
Unfortunately, your husband already signed the new loan, which binds you guys to this loan... If you are in California (like I am) there is no "cooling off" period where you can return the car... However, dealers usually have a 14 day right of recission (which means they can say nevermind, we want the car back, or we want you to sign this new contract... Just for your future reference, if the dealer wants you to sign something for more interest, you do not have to do so... You can opt to give the vehicle back and say you do not like the new contract... This will usually get them to re-negotiate the loan and make the terms better for you, or they will take the car back and you'll be done with it... Just make sure you sign the title back over to them... (registration/title/ownership in the car, whatever!!) good luck!! =)
2007-12-03 08:48:54 · answer #5 · answered by idgaf 5 · 0⤊ 0⤋
"We signed a contract the night we bought the car at 18% & the next day they called my husband in to
drop off his pay stubs & had him sign a new contract at 24.99%"
Nope, the old contract was for 18%, they can either ask for the car back or offer you a new contract at 24.99% if the original paperwork was filed incorrectly.
You aren't forced to go the 25% route unless you want the car.
2007-12-03 06:29:10 · answer #6 · answered by Phil M 7 · 3⤊ 0⤋
You would need to talk to a contract attorney but typically once both parties sign a contract the terms can't be changed unless both parties agree. Unfortunately, by signing, your husband agreed to the change in the percentage rate.
BTW paying 24.99%, or even 18%, interest on a car loan is crazy.
I would seriously suggest getting credit counseling help.
2007-12-03 06:31:02 · answer #7 · answered by The Oracle of Delphi 6 · 3⤊ 1⤋
Poster number one is completely right. I don't think you understand finances at all. Your husband should never have signed a new contract. That's a worse interest rate than most credit cards carry!
I hate places that prey on stupid people who don't understand money. Of couse it could be worse. I know of someone, who will remain anonymous, who went to buy a car, and paid five times what the car was worth because their credit was bad and they just didn't get how the whole interest rate thing worked. They just knew the payments were manageable for them at a $120 every week. The car was worth $1500 and they paid like $6200 for it over the course of a year long loan. I *HATE* predatory lenders.
BTW, I hope you didn't pay too much for that car, I hope you can pay the note off quick. You should see how much this is going to cost you in the long run.
http://www.cars.com/go/advice/financing/calc/loanCalc.jsp?mode=full
2007-12-03 06:32:43 · answer #8 · answered by Tracker 6 · 1⤊ 2⤋
Your hubby didn't have to sign the NEw loan...
they would of ask u bring the car back.. and that is what u should of done.. at this price u could of gotten a new car... that will hold up for years to come...??????
there is the lemon law.. so if the car is not working "PERFECTLY" TAKE it back immediately.. and cancel out the deal....
u will be paying forever... and what happens if the car begins to break sown and u have to pay for repairs???
U pay on a car .... U have to pay on ... for repairs.. now does that make any sense??? U pay to pay on a car to repair it??? Makes as much sense as this does..
good luck..
2007-12-03 17:05:43 · answer #9 · answered by ♥ Blondie ♥ 7 · 0⤊ 0⤋
I agree with the above... You should have been able to get a car loan for under 10%.
18% was dumb enough but to turn around and sign another contract for 25% was pure stupidity. You should have asked these kinds of questions before he went and signed stuff!
And you are right, NOW you have no choice but to pay the loan. If you do not, his credit will get even worse!!
2007-12-03 09:02:45 · answer #10 · answered by forgivebutdonotforget911 6 · 1⤊ 4⤋