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The rise of the scammy car loan
(www.vox.com)
This article pisses me off. Back in late 2020 I went to a dealership to buy a new car, very high credit score, 1/3 cash down, and qualified for a 0% interest deal that was going on at the time.
The dealership came at me with the most bullshit offers, tried to get me to take dealership financing at 4%, then 3.5, then 3% at a longer loan duration and acted like they were doing me a favor the whole time. Finance guy was being such a dickhead about it even the sales guy started getting pissed at him.
Took nearly 6 freaking hours to close the deal. Finally got my 0% offer and expected financing/cost because it was 20 minutes to closing time and I was like “fuck it, I’ll go check out your competitors tomorrow,” keys in hand, walking out the door. Sales guy literally chased after me and stopped me at the car to say the finance dude finally caved.
Fucking scumbag stuff. Dealership changed their name a year later and I don’t wonder why.
And then you kept walking because fuck those guys?
Nah, I bought it because there wasn’t going to be a better deal, I did my research for weeks and months prior and that 0% popped up in the middle of reviewing options.
I think they tried the push because it was the last day I could get it before the deal expired. The zero % financing was via the manufacturer, not dealership.
And they make less money on that than the dealer financing options. No surprise they were being pushy about it.
I mean, I was already preapproved for a 2.5% loan and qualified for the 0% offer, made that clear. I was very up front there would be no dealer loan.
I made it dirt easy, like “I’m qualified for this zero interest deal, I’m willing to pay up to $10k in cash up front. Make it happen for $300 a month or less with those terms and you have a sale.”
They still fucked around so hard. I really was ready to walk out empty handed, they made the deal literally with me unlocking my old car to leave.
I admire your patience. I would have walked out an hour in.
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0% interest rate is usually given in lieu of a cash back offer. So, you could get like $2500 cash back and a 4% interest rate or a 0% interest rate with no cash back.
My strategy would be to take the cash back, take the dealer loan to reduce friction, and then refinance immediately when you get home at a lower rate.
0% was a brand-wide deal (manufacturer, not dealership) to get rid of previous year stock, there was no cash back option on it. Plus, there’s no lower rate than zero, and best I could get with a different loan was 2.5%. Though I did reference said pre-qualification during negotiation when they made the crap offers. Made it clear I wasn’t walking out with a dealer loan.
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All Carsalesmen Are Bastards.
Defund the dealerships.
No fan of Musk, but this kind of shit and other scams are driving me towards companies like Tesla that are using a direct sale model.
Subaru dealers lied to me about the engine I was getting, said the head gasket issue was fixed. Turns out it was fixed, just not for the model of engine that was in the specific car they were selling me.
Then a different dealer did the head gasket job, thousands of dollars, and now they're telling me it needs to be done again four years later for another 5k.
A local Chevy dealer was screwing over their employees with wage theft by agreeing to give raises and then quietly taking them away later.
Fuck them all to hell, small business my ass. If you have to spend millions lobbying your state government to make direct sales illegal, I'm going to do everything I can to avoid giving you my money.
Preapprove loan in the range you want from your bank.
Agree in writing on car price.
Get loan from bank.
Pay for car
Pay back bank.
Edit: to be clear, when i say Bank I only mean Credit Union.
You say that as if banks are on your side.
Banks aren't credit unions.
True. The banks are at least marginally more on your side than car dealerships though.
I've only ever banked at credit unions.
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I'm looking to buy a new car, went to the bank for a loan, they said they'd only do a car loan if I bought a car that was less than 3 years old. Are you kidding me? My current car is from 2004, I'm hoping for an ~$8k 2012 or something....
My last car purchase I was thinking similarly, I ended up with a '14 with 80000km on it. Bank said "we can't give you a loan for that, but we can up your line of credit and you can use that" ...
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Additionally, if you can get your down payment/trade-in to get your car off the lot with equity then you’ll get a lower interest rate. When my ex and I bought her new car a few years ago we incidentally did that (total value between the down payment and trade in was something like 10k on a 23k purchase) and we were pleasantly surprised to see a full percentage point lower on the loan.
I recommend that anyone buying a car that they'll have to finance bring in a laptop with an amortization schedule up and ready to go to the dealership. Dealers don't want to talk about the total cost of the car. They only want to talk in monthly payments. They'll sometimes offer cashback in order to get you to agree to a higher interest rate. If you don't have an amortization schedule handy, you're not going to be able to do that math and figure out if you're getting a good deal or getting scammed.
If you don't know what an amortization schedule is, then Google it and play around with one before you go in to buy a car. You only need to plug in a few variables - purchase price, number of months for the loan, and interest rate. That will allow you to see your monthly payment and what you're paying in interest.
If you can't do that simple thing, then don't finance a car.
you don't even need a laptop for that nowadays; you can pull up such a thing directly on your phone.
True, but in my experience a laptop forced you to take your time a bit and see the bigger picture. Also it lets the dealer know that you are not fucking around.
I knew this big clunky ass gaming laptop would come in handy someday. The RGB lights really communicate that I'm no man to be trifled with
Hell yeah. You see a man with RGB and you know he means business.
Probably the most valuable thing I learned in school was how to build amortization schedules. I've used it on vehicles, student debt, and mortgage. It's really helped me win the "stop paying unnecessary interest to others" game.
Same here. I've forgotten probably 90% of what I learned in school, but amortization schedules have stuck with me because they're such a necessary part of life.
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The rise of
Reading the article, it sounds like the exact scam that was parodied in GTA V almost 15 years ago. I imagine this is not a new problem. Maybe the rising interest rates made it even worse?
Are they just talking about the predatory "buy here, pay here"-type used-car dealers that have been around for a while, or are new-car dealers getting into the scam now, too?
The whole article was just anecdotes and heresay, so who knows. I know there is a ton of predatory b/s involved with buying cars but these examples seem like outliers. I think the Tik Tok lady was lying about her car payment(s) though just to go viral and it totally worked.
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this post was submitted on 11 Apr 2024
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