Purchase and Finance Question

Hello all,

Just bought a 06 PT Cruiser and I'd like to throw some questions out
about some things a finance officer at a dealership told me as we were
discussing loans and percentages.

First, he quoted me 9.2% for 72 months. After I didn't accept that,
attempted to get him down to the local average of 6.5% or so. He
stated I couldn't get a loan for that % unless the loan amount was over
15,000. Is this possible?

Second, I asked him if I could have a day to compare rates with other
companies, he flat out said "no". Is this standard practice? As a
consumer, I should have the right to look around for a better finance
rate - correct?

I know this doesn't necessarily contain a Chrysler-related question,
but if I conclude that these statements were false, I'm going to write
to someone and complain.

Thanks in advance for ideas, discussion, etc. ...

Mike

 

I suppose anything is possible, but this is not likely. Your rate is
more likely to depend on your credit score than on the amount financed.
With average credit 9.2 for 72 is not out of line. It's a tad high for
good credit. Wells Fargo, Capital One, and many other banks will quote
you auto rates online. So you're better off to have all the financing
lined up BEFORE you go to the dealer.

Yes, take all the time you want. There are more than one dealers in the
USA. Most would be glad to allow you to shop for financing. If yours
won't, then go to another one.

Good luck.

 

Typical dealer rip off. With a 700 rating, you shouldn't have to pay
any more than 6.5%, tops. The spread (sometimes called the "vig" by
car dealer crooks) of 3.2% is the dealer's "take" on the deal...AFTER
they got their profit on the car itself...AND already get a cut of the
6.5 from the finance house.

No, just more lies from the F&I man to make more commission.

Always. Rule of thumb for the closer and/or F&I man: NEVER let them
out of the booth once they want the car. That's where dealers make
most of their money back on a "skinny" deal...the F&I.

Well, before the current political state in this country, yes. Now,
with all the "every man for himself" attitude, you have to be smart
and beat the dealer at his own game.

Rule #1: NEVER go in looking for a car without having either cash or
independent financing and insurance already lined up. Financing and
insurance are VERY profitable sidelines for all dealers, even if you
go through Chrysler Financial (if they even exist anymore.)

Rule #2: Once you're sold on a car, grind them down to a price you
want by doing research before you ever hit the lot. Once a seasoned
closer knows you're not a dummy, and there's little or no traffic on
the lot, he'll take a "skinny" ($200 profit deal) just to move a car
and get rid of you.

Rule #3: NEVER try to buy a car at a dealership when there's heavy
floor traffic. They'd just as soon throw you off the lot and get
another "up" who's a sucker than deal with a buyer with a sharp
pencil.

Rule #4: NEVER buy "dealer add-ons" like rims, tires, etc. Demand
they take that crap off and get the stock EVERYTHING. You can buy
your own rims, tires, "Lustre-Glaze", whatever, later for a lot, lot
less.

Lotsa luck on that. Back in the '70s, it might have done you some
good. Now, after years of ruinous pro-business attitude in this
country, no one cares about a little schmuck like you, especially the
DC zone office. Out here in CA, we had the strictest regulation of
auto dealerships in the nation. Any dealer who would try to sell
fraudulent add-ons, phony contracts with hidden balloon payment and so
on, got their license yanked. Ask Cal Worthington about that...he
lost his Dodge franchise for doing just that in the '70s. Now, with
AHHHHnuld Schitzenslinger as the "governator," bought and paid for by
right wing car dealers, they're getting away with murder here again.

Best route of attack in this anti-consumer era: word of mouth,
letters to your local newspaper and maybe call-ins to local talk radio
shows. I guarantee that once a dealer hears his name being shit on on
the radio, you'll get his attention...and probably DC's too. Just
make sure everything you say or write is FACTUAL to avoid them
prevailing at any defamation legal procedings. If they do sue you,
countersue for your legal and court costs as well as any financial
damages done through questionable tactics or policies. Car dealers
usually lose once the matter goes to trial, so hang tough. Most
times, when a dealer finds out you're willing to go to trial, his
lawyer will tell him to buy you off. When that happens, never take
the first offer, either...let 'em sweat.

I sold cars for awhile while in undergrad, at a Chrysler/Plymouth
house and later selling Datsuns. Both were "T.O." (turnover) houses
where the affable sales guy would disappear, to be replaced by a hard
nosed "closer" and "F&I man" who'd get you trapped into whatever they
could get away with without going to jail. One thing about the
Japs...they, at least back in the old days, kept their dealers more in
line than the US automakers, who'd just let them run wild. Worst
dealers in my experience: Chrysler, followed closely by Ford. GM
dealers are so desperate to move anything these days they'd probably
treat you better than the other two. Also: remember the "no
commission" Saturn experiment? Gone. They're just as bad as the
others now, but since Saturn started tanking in sales, they'll
probably be more compliant, as well.

 

No. It is possible that it makes a difference. It's also possible that
9.2% is what you can get at the bank.

It's certainly common for them to lie, and this is sort of a dumb angle for
them to take, so I would not want to impugn all car dealers by saying it's
"standard practice". I'd say it's nothing unusual. The dealer desperately
needs your money. They will profit off your loan, and that's why they want
to handle it. They sell loans to make additional money.

This is not the worst lie they have. The worst lie is to tell you "we'll
give you this great interest rate and your payments are $XYZ", when in fact
the payments are higher than they should be. Most people would never do the
math and determine that the dealership tacked on an extra $50 or $100 a
month. You might want to get somebody who understands finance to check their
math.

As a

Of course. It has nothing to do with your rights. They'll take cash in
exchange for a car. If you go to the bank and get money, then the dealer
will accept money in exchange for a car. HOWEVER, you will be depriving
them of the opportunity to profit from your loan. That could make a
difference in a deal/price. That's perfectly okay, for them and you. It's
your money, and it's their car. They need your money a lot worse than you
need their car.

They sound like they're pretty good at high-pressure crook stuff, and you
gave them the business they wanted. If your payments are honest it's no big
deal. If they're dishonest then by all means get out of it.

 

Yes, you should! BUT! It is your best be to go to your bank and any
other lenders and get PRE-APPROVED!

I recently purchased a 2002 Grand Caravan. I went to my bank, and got
pre-approved before I even went shopping! This way I KNEW that I had
financing, and what my bank could do for me. This pur me in the
driver's seat - literally - when talking with the dealer. I was not
forced to take a bad rate.

Keeping in mind that we are in Canada...

My bank offered me up to $20,000 for up to 5 years (60 months) at
"Prime plus 3" - floating (currently running at about 9.5 %). I was
not thrilled with this, but it was in line with other financial
institutions.

As a laugh, I asked the dealer - JACKPOT!

The dealer gave me 8.18% FIXED for 5 years. Since I believe interest
rates are going to go UP not down, then the dealers offer is a much
better offer. Kinda blew me away too as I still think 7.5% for our
credit history, but hey - we DID need a car after that 16 yr old hit
and totalled our old van!

Usual terms and consitions, plus the ability to repay early without
penality!

Basically, it is my opinion you should do ALL your homework before you
go shopping. If the dealer put the gun to my head like that, I would
have walked - plain and simple. What is he hiding???

The dealer that sold me my current van let us take the van for a
weekend test drive! We had it inspected for both body & mechanical.
The salesman looked at out inspection, and had some more things fixed
on the van - no quesitons asked. Heck, just before we purchased it,
the van developed a bad switch that drained the battery! The switch
was replaced, and a NEW battery installed - all wothout asking.

It took this guy over 2 weeks to close the deal. He never ever forced
us, and the customer service was truly AMAZING.

Any salesman that trys to back you into a corner,,,, well I have to
ask if the Management will hire and keep such a salesman, what are the
staff in the service department like???? Are you going to get the
after sales service and support that you PAID for???

Is what the salesman did "illegal"?? No. You basically got caught in
an eppisode of "Deal, or NO Deal". He was not prepared to keep the
deal on the table unless you closed the deal at that moment. This is,
IMHO, unethical. He forced you into closing the deal so he could make
a commission. I think you were bullied. But you let it happen. As I
said, had my salesman done this, I would have walked. My money says
that had you returned with alternate financing, the vehicle would
still have been there. And if he was not willing to extend the same
offer, I would have told him to stick it.

You can write and complain, but you have lost all your power. The
power is in your hands when you have the money. It is quite likely
that your complaint will fall on deaf ears.

I hope you had that car checked out thoroughly before you purchased
it.

hth

 

Definitely you should compare.
This "no" from him was the tip off to go elsewhere.
I'd try your bank. I borrow from my brokerage account, which is a high
rate, but since it it tax deductible it's lowest after tax.

Regarding rates from any course I suggest you get the detail of all
payments for an accurate comparison of costs. Up front charges and how
they calculate their rates (interest cost should be on the remaining
balance) vary significantly.
For example their 6% is usually more than 6%!