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Car loan rant-WTF?

Chaotic42

Chaotic42

Lifer
Ok, so I'm thinking about buying this Mazda. It's $2850. I have $2300 in the bank.

I want a loan to build up my credit. The bank decides, and tells me, that I'll be borrowing $2200 and putting up $650 of my own money (thanks for telling me what I'm going to do). The also want the guy to drive 50 miles to the nearest bank branch, bring his ID, the car, and the title so they can inspect it.

Then I have to get insurance on the car (Comp/Coll, and mind you I won't yet own the car), bring all of my stuff over, and then they'll decide about the car.

This seems like a freaking joke. Why won't they just give me the money, since they're letting me borrow less than I have in my account, and if I default, they can drain my account. I don't want to have to make this poor old guy go through all of this crap.

This seems so messed up. I asked what would happen if I bought a car over the internet. They said "Well, they have pictures of cars on the internet".

I want to hit someone. 😉

I've got about 10 minutes to decide what to do.
 
Because they can't drain your account unless it is held as collateral. Since you could take that money at any moment, they are potentially out money if you default.
 
They are trying to secure their colladeral.
If the car books low (Wholesale) then they will make you put up the rest of the cash.
 
Why not go with a different bank?

that does sound like a lot of meaningless loops to jump through.
 
Originally posted by: Mandos
Thats exactly how I feel.
Click to expand...
It's where I have an account.

I'm going to ask them to change it to a $1500 unsecured loan. If they won't do it, I'll say screw it.
 
Sorry but this is fairly standard procedure for direct lending for used auto loan.

1) I would get full coverage insurance before getting the car loan. The bank requires their collateral (the car) be protected, so full coverage insurance is required especially on newer car loans.

2) They need to inspect the vehicle for disbursing funds because again this is a secured loan. What if you claim it is worth $3500 and only has 60k miles on it? If they believed you ... 3 months down the road you stop making car payments, 90 days later they repo the car only to find out it's in piss poor condition, it's actually worth $2200 and has over 90k miles? They're just re-confirming the collateral, it's condition and value.

Congrats on the "new" car, which model did you get?
 
Seems like a decent deal. I searched for 95-96 Mazda 626's for sale in my area, only found one

95 MAZDA 626, 4dr AT, 180k exc cond, $1995, 503-xxx-xxxx
 
Originally posted by: RossMAN
Sorry but this is fairly standard procedure for direct lending for used auto loan.

1) I would get full coverage insurance before getting the car loan. The bank requires their collateral (the car) be protected, so full coverage insurance is required especially on newer car loans.

2) They need to inspect the vehicle for disbursing funds because again this is a secured loan. What if you claim it is worth $3500 and only has 60k miles on it? If they believed you ... 3 months down the road you stop making car payments, 90 days later they repo the car only to find out it's in piss poor condition, it's actually worth $2200 and has over 90k miles? They're just re-confirming the collateral, it's condition and value.

Congrats on the "new" car, which model did you get?
Click to expand...
It's a Mazda 626.

My problem is, if I'm supposed to have a good credit rating, isn't that something? I guess I'm asking for too much trust, I can see their side.

I asked them if I could just get a $1500 loan to avoid the lien, they said, "Call back in an hour".
 
Originally posted by: Chaotic42
Originally posted by: RossMAN
Sorry but this is fairly standard procedure for direct lending for used auto loan.

1) I would get full coverage insurance before getting the car loan. The bank requires their collateral (the car) be protected, so full coverage insurance is required especially on newer car loans.

2) They need to inspect the vehicle for disbursing funds because again this is a secured loan. What if you claim it is worth $3500 and only has 60k miles on it? If they believed you ... 3 months down the road you stop making car payments, 90 days later they repo the car only to find out it's in piss poor condition, it's actually worth $2200 and has over 90k miles? They're just re-confirming the collateral, it's condition and value.

Congrats on the "new" car, which model did you get?
Click to expand...
It's a Mazda 626.

My problem is, if I'm supposed to have a good credit rating, isn't that something? I guess I'm asking for too much trust, I can see their side.

I asked them if I could just get a $1500 loan to avoid the lien, they said, "Call back in an hour".
Click to expand...

A personal unsecured loan would have a few advantages:
1) Far less hassle which sounds like it would be a big plus to you.
2) No inspection of the vehicle required since there is no collateral securing the loan.
3) No requirement to have full coverage insurance (with your bank as the lien holder - you would own the car title in your name)
 
Originally posted by: RossMAN
A personal unsecured loan would have a few advantages:
1) Far less hassle which sounds like it would be a big plus to you.
2) No inspection of the vehicle required since there is no collateral securing the loan.
3) No requirement to have full coverage insurance (with your bank as the lien holder - you would own the car title in your name)
Click to expand...
Yeah, I'm hoping it went through. I'm on hold. If they can deposit it, I can pick the car up today before work.
 
why not just pay it off with the creditcard checks they give out.
You'll get the title immediately, you can get liability coverage since you own the car, and the minimum payment should be fairly low, but you should be paying more than just the minimum.
 
Originally posted by: isekii
why not just pay it off with the creditcard checks they give out.
You'll get the title immediately, you can get liability coverage since you own the car, and the minimum payment should be fairly low, but you should be paying more than just the minimum.
Click to expand...
Those are the biggest ripoff of just about anything someone could do. What is it 3% instant charge, plus you pay full interest rate from the day the check clears to the day you pay it off - often a rate higher than your normal CC rate. And that doesn't help Chaotic42 with his desire to have a loan to pay off.
 
Originally posted by: dullard
Originally posted by: isekii
why not just pay it off with the creditcard checks they give out.
You'll get the title immediately, you can get liability coverage since you own the car, and the minimum payment should be fairly low, but you should be paying more than just the minimum.
Click to expand...
Those are the biggest ripoff of just about anything someone could do. What is it 3% instant charge, plus you pay full interest rate from the day the check clears to the day you pay it off - often a rate higher than your normal CC rate. And that doesn't help Chaotic42 with his desire to have a loan to pay off.
Click to expand...

He's borrowing a small amount 3xxx.xx which can be paid off in a 1-1.5 years.
Most creditcard offer no transaction fees + 0% interest for 12 months.
Seems like a much better option to me without dealing with the loan officer at the bank.
Plus if the month gets tough, you only have to make a minimum fee which is usually 3% I think from the balance.
 
Originally posted by: isekii
Most creditcard offer no transaction fees + 0% interest for 12 months.
Click to expand...
I've never seen that with the checks - they are completely separate from the typical 0% interest deals that are advertized. Maybe it exists, but I've never heard of it.

Here is a typical 0% credit card offer.. Lets look at the fine print:

"The standard variable APR for cashs advances is 19.99%. However, if you default under any Card Agreement that you have with us, we may immediately increase the APR on all balances (including any promotional balances) to a variable default rate of 27.99%. The minimum finance charge is $.50. The transaction fee for cash advances is 3% of the amount of each cash advance, but not less than $5."

A $1000 check will cost you 3%*$1000 = $30. Plus if you keep that for 1 year, you'll pay 19.9%*$1000 = $199 in interest. Total cost: $229 in fees. Of course if you are 1 day late, that interest goes up to 27.99%.

All that on a 0% for 12 month card.
 
Originally posted by: dullard
Originally posted by: isekii
Most creditcard offer no transaction fees + 0% interest for 12 months.
Click to expand...
I've never seen that with the checks - they are completely separate from the typical 0% interest deals that are advertized. Maybe it exists, but I've never heard of it.
Click to expand...

I receive 2-3 every week.
0% with no transaction fees from 6 month to a year.
I don't use it since I don't need to take out a loan, but if I were to purchase a car that's lets say 3k ? Why not take that option ?
You're purchasing an older car, if you have a lien against it, you can't get liability insurance in most if not all states. So you'll be paying extra for comprehensive coverage which you may not need on such an old car. He can be saving money and not bother with unnecessary issues in getting a car loan.


Oh.. and I think they only charge you the transaction fee, if you request the checks to be sent to you. As you said usually about 3%. If you talk with the CC company, they'll most likely wave that.
I called Citi to cancel my cards, and they offered me 0% interest for a whole year. (I didn't have a balance, but they offered free balance transfers from different accounts)
 
Ok, the bank says I need a cosigner, which isn't a problem. I just need to go with my dad tomorrow morning and he'll cosign. I just got a $1500 loan. I've got another 3 or 4 paychecks ($711/ea) before I have to pay for school. Paying $1380 will leave me with about $1720 in the bank. Not too shabby.
 
Originally posted by: isekii
Oh.. and I think they only charge you the transaction fee, if you request the checks to be sent to you. As you said usually about 3%. If you talk with the CC company, they'll most likely wave that.
I called Citi to cancel my cards, and they offered me 0% interest for a whole year. (I didn't have a balance, but they offered free balance transfers from different accounts)
Click to expand...
I think I edited more info just as you posted this. Look at the fine print on your CC forms. As far as I know all of those checks charge fees like that. For example look at the 0% CC link I posted above. If you have a link to one with 0% cash advances, please post the as many people will benefit from it.
 
Originally posted by: dullard
Originally posted by: isekii
Oh.. and I think they only charge you the transaction fee, if you request the checks to be sent to you. As you said usually about 3%. If you talk with the CC company, they'll most likely wave that.
I called Citi to cancel my cards, and they offered me 0% interest for a whole year. (I didn't have a balance, but they offered free balance transfers from different accounts)
Click to expand...
I think I edited more info just as you posted this. Look at the fine print on your CC forms. As far as I know all of those checks charge fees like that. For example look at the 0% CC link I posted above. If you have a link to one with 0% cash advances, please post the as many people will benefit from it.
Click to expand...

It's special promotions that they send out. I get them in the mail. I'm not positive how many they send out to the # of individuals, but I do know there are some that charge you a fee for using the checks.
There are some out there that don't. Also some other things I've noticed are right before tax refund time, a lot of banks offer special offers like these. Recent one that my parents took advantage of was Chase.
The only catch was you had to use 5k or more on the Chase one which my parents had no problems of doing since they just wrote the money out to themselves, paid off smaller cards and purchased business supplies with the rest.
 
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