Financing horror stories... post 'em!

[Proprioceptive]

Let me share two, one of my own and another I witnessed.

I was looking to buy my very fist auto and knew absolutely NOTHING about shopping and financing a vehicle. I was looking at used for a while, but visited a stealership and ended up with a new 2007 Ford Ranger RWD supercab (yeah, I know you can laugh...). I had no credit history and knew nothing about credit, so I walked in looking at options and later that afternoon walked out with a shiny red Ranger and a CRAP load of debt on my shoulders:

MSRP: $18,135 ($2500 in incentives the dealer didn't even tell me about and didn't even apply to the price!)
Sale Price:$18,900
Add ons: $1,200 25k mile service plan (I thought it was free...)
$250 dealer doc fees
$200 "misc" charge (????)

So we're looking at $20,550 on a 72mo loan at, yeah you guessed it, 11.35%!!!! I even put down $2,200. I was raped. That dealer walked out of the deal with THOUSANDS of dollars in profit and great jokes for their buddies. I bet they had a great time watching me drive off the lot. My first mistake was walking in to the dealership, shaking hands with the sales guy and saying, "I have NO IDEA how this works, but..."

------------

When I went to go buy my 2011 Hyundai Sonata, I was able to over hear the entire deal for a used 2005 Ford Mustang 2D Convertible. This was some thug looking kid who was pretty much constantly texting the entire time he was doing the deal (this was an open cubicle setting... very weird). Anyways, he pulled out a piece of paper he said his uncle gave him showing that the price should be $10,900 (110k miles on it) and that the $11,400 price was too high. The sales guy gets up and goes to talk to the sales manager and comes back saying they'd be happy to match the KBB price and then proceeds to ask, "so what kind of payments are you looking to have?" I over heard that he was looking to finance at 60mos so that should have put his payment around $225, but aparently he didn't know this because by the end of the deal, his monthly payment was $355 for 60 months!!!!! I was tempted to step in and stop the deal, but I figured that I'm so well versed in car buying now because I made such a HUGE mistake on my own... so I just let it be..

 

[RockinZ28]

Never financed anything, only buy what I can pay in full.

Know I'll have to suck it up and do it for a house in a year or two, but that's the only thing I will take out a loan for.

I know too many people that wanted to drive nice cars, now they work for their car, instead of the car working for them. And have ruined credit and debts.

 

[OILFIELDTRASH]

Pay cizash fizool. Straight gangsta g.

I paid straight cash for my ride new z06 vette paid in full with dollar bills.

You should know no one on AT finances a car. It's all paid in full cash. Everyone makes 100k+ a year.

 

[JulesMaximus]

I've financed a number of cars over the years. Never had any horror stories related to it either. I got 1.9% financing on my Maxima for 5 years when I bought it...would have been stupid to pay cash for it with such a low interest rate.

 

[CraigRT]

Never had a problem, always had low rates, or paid cash for my shitty cheap cars.

 

[Zenmervolt]

11.35% for someone with no credit history at all isn't really out of line. I know it's high, but unless you have good credit history it's ridiculous to expect anything even close to the best rates. They're not going to give someone with no history at all the best rates.

Personally, I don't have any financing horror stories, but I do know some people who have. A friend of mine got into trouble with CC debt in college and destroyed her credit. When she needed a car, she ended up paying over 23% interest.

ZV

 

[jlee]

No horror stories here..I financed $15k for my Tundra at 5.x% for 72mo and paid it off in less than half the time- not a fan of loans.

 

[smitbret]

Let me share two, one of my own and another I witnessed.

I was looking to buy my very fist auto and knew absolutely NOTHING about shopping and financing a vehicle. I was looking at used for a while, but visited a stealership and ended up with a new 2007 Ford Ranger RWD supercab (yeah, I know you can laugh...). I had no credit history and knew nothing about credit, so I walked in looking at options and later that afternoon walked out with a shiny red Ranger and a CRAP load of debt on my shoulders:

MSRP: $18,135 ($2500 in incentives the dealer didn't even tell me about and didn't even apply to the price!)
Sale Price:$18,900
Add ons: $1,200 25k mile service plan (I thought it was free...)
$250 dealer doc fees
$200 "misc" charge (????)

So we're looking at $20,550 on a 72mo loan at, yeah you guessed it, 11.35%!!!! I even put down $2,200. I was raped. That dealer walked out of the deal with THOUSANDS of dollars in profit and great jokes for their buddies. I bet they had a great time watching me drive off the lot. My first mistake was walking in to the dealership, shaking hands with the sales guy and saying, "I have NO IDEA how this works, but..."

------------

When I went to go buy my 2011 Hyundai Sonata, I was able to over hear the entire deal for a used 2005 Ford Mustang 2D Convertible. This was some thug looking kid who was pretty much constantly texting the entire time he was doing the deal (this was an open cubicle setting... very weird). Anyways, he pulled out a piece of paper he said his uncle gave him showing that the price should be $10,900 (110k miles on it) and that the $11,400 price was too high. The sales guy gets up and goes to talk to the sales manager and comes back saying they'd be happy to match the KBB price and then proceeds to ask, "so what kind of payments are you looking to have?" I over heard that he was looking to finance at 60mos so that should have put his payment around $225, but aparently he didn't know this because by the end of the deal, his monthly payment was $355 for 60 months!!!!! I was tempted to step in and stop the deal, but I figured that I'm so well versed in car buying now because I made such a HUGE mistake on my own... so I just let it be..

I don't understand why you're complaining about 11.35% on a 72 month when you came in with ZERO auto credit history.

 

[daw123]

I always finance my car purchases using personal loans, so I've never had the pleasure or misfortune of agreeing the finance deal through a car dealership.

 

[smitbret]

I always finance my car purchases using personal loans, so I've never had the pleasure or misfortune of agreeing the finance deal through a car dealership.

You're probably missing out on some great interest rates, then. A truly smart buyer gets pre-approved at his own bank or credit union before going in to buy a car. Then, when you are ready to buy (very important that the dealer knows this), you let them offer their contract terms. If it is out of whack with what your bank can do, let them know. It is a rare day when a person's own bank or CU can get better terms than a dealership can.

 

[exdeath]

Pay cizash fizool. Straight gangsta g.

I paid straight cash for my ride new z06 vette paid in full with dollar bills.

You should know no one on AT finances a car. It's all paid in full cash. Everyone makes 100k+ a year.

Or some people financed a ordinary plain jane used car, drove it for years, paid it off, continued drive it, and either bought their next car in cash, or had 50% cash, financed the rest, and paid it off again.

Having nice things kinda grows like a snow ball when you start out right and don't get in debt trying to keep up with the Jones straight out of college (or even highschool for some people). You don't even have to be rich, but you can be relatively wealthy in that you can get what you want without worrying about the price.

As for horror stories, I know someone who bought a used $10k car at one of those shady "no credit, bad credit, we don't care" places at like 29%.

 

[smitbret]

Or some people financed a ordinary plain jane used car, drove it for years, paid it off, continued drive it, and either bought their next car in cash, or had 50% cash, financed the rest, and paid it off again.

Having nice things kinda grows like a snow ball when you start out right and don't get in debt trying to keep up with the Jones straight out of college (or even highschool for some people). You don't even have to be rich, but you can be relatively wealthy in that you can get what you want without worrying about the price.

Smartest guy in the room right here.

 

[TraumaRN]

You're probably missing out on some great interest rates, then. A truly smart buyer gets pre-approved at his own bank or credit union before going in to buy a car. Then, when you are ready to buy (very important that the dealer knows this), you let them offer their contract terms. If it is out of whack with what your bank can do, let them know. It is a rare day when a person's own bank or CU can get better terms than a dealership can.

I don't know about that, when I bought my Fusion Hybrid it was a 48 month term at 3.99% through my credit union...the absolute best my dealership could offer was around 7% And that was with my credit score at 808...My dealer actually asked me if I had pre-approved with a credit union/bank because he said I'd get raped if I financed through the dealership

 

[amdhunter]

I was pissed when I found out I signed a 66 month deal with Honda, instead of 60 for my 2006 Civic. That was me being stupid though, so I can't blame anyone buy myself.

I ended up trading the bastard in, so I guess it didn't really matter.

 

[daw123]

You're probably missing out on some great interest rates, then. A truly smart buyer gets pre-approved at his own bank or credit union before going in to buy a car. Then, when you are ready to buy (very important that the dealer knows this), you let them offer their contract terms. If it is out of whack with what your bank can do, let them know. It is a rare day when a person's own bank or CU can get better terms than a dealership can.

I find out in two weeks time if I have become chartered. If so, then I will get a good pay rise and to reward myself I will be buying a new car.

I'm looking at a second-hand BMW M3 or Audi RS4. My car is worth about £7k and I will be borrowing about £23k. Looking on the 'net I can get a personal loan from a bank for about 8% APR. Finance through a dealer is running at about 13% according to websites, although I agree with you that I need to check this out with a dealer to see if they can beat 8% APR.

I've had two loans so far through HSBC and Alliance and Leicester; both loans are paid off now and I always met the monthly repayments on time, so I assume my credit rating must be pretty good. I also have and I have had various contracts for my mobile phone, which again I've always paid on time.

I do not have a mortgage (I rent a room at the moment), very little outgoings (and debt) since I'm single with quite a bit of disposable income. I have no interest in buying my own house or flat.

 

[amdhunter]

You're probably missing out on some great interest rates, then. A truly smart buyer gets pre-approved at his own bank or credit union before going in to buy a car. Then, when you are ready to buy (very important that the dealer knows this), you let them offer their contract terms. If it is out of whack with what your bank can do, let them know. It is a rare day when a person's own bank or CU can get better terms than a dealership can.

HELL YES TO THIS X 100. This is how I got $4000+ off the sticker price of my RX-8. Toyota could not beat the APR I told them Chase was giving me (total lie) and they had to lower the price of the car to keep my payments where I wanted them to be.

In the end I ended up getting a 5.9% rate, which is, by FAR, the highest APR I've paid in my life, but I got a sweet deal for my car. Many guys over at rx8club were like WTF when I posted how much I paid for my R3 -- which, by the way, is already 1/4th paid off.

Also, it's kinda weird that I pay Toyota Financial Services for a Mazda...lol

 

[MJinZ]

HELL YES TO THIS X 100. This is how I got $4000+ off the sticker price of my RX-8. Toyota could not beat the APR I told them Chase was giving me (total lie) and they had to lower the price of the car to keep my payments where I wanted them to be.

In the end I ended up getting a 5.9% rate, which is, by FAR, the highest APR I've paid in my life, but I got a sweet deal for my car. Many guys over at rx8club were like WTF when I posted how much I paid for my R3 -- which, by the way, is already 1/4th paid off.

Also, it's kinda weird that I pay Toyota Financial Services for a Mazda...lol

People used to pay General Motors (GMAC) for anything ranging from their Houses (no where near Michigan) to boats and cars (no where near domestic). So, it's not really out of the ordinary.

 

[microAmp]

No horror stories for or anyone I know but I did use my bank, Chase to get me a equal interest through dealer, even though I didn't do the pre-approval price but I knew my credit score was fine, even though I hadn't checked in a couple years but no reason for it drop massively either.

Just curious, if there is a rebate on a new vehicle, say $25k car with $2k rebate, you can negotiate a lower price on the vehicle, $22k for price, and use the rebate also right? For total price of $20k? I would assume yes but thought to ask.

 

[Dr. Detroit]

Jeezus - even before the internet existed I managed to not fuck myself when I bought my first brand new car. I was a few months past my 18th birthday and in the Army. I was ready to be raped.

I paid $10,600 for a brand new '93 Mazda Protege DX with AC & 5spd manual trans. I wanted a Escort 5dr hatch but they could not locate one with a manual trans with 250 miles.

Sticker on it was roughly $13,025. I was hoping to get the car down to 10,300 but negotiations stalled and I said fuck it and bought the damn car.

 

[smitbret]

HELL YES TO THIS X 100. This is how I got $4000+ off the sticker price of my RX-8. Toyota could not beat the APR I told them Chase was giving me (total lie) and they had to lower the price of the car to keep my payments where I wanted them to be.

In the end I ended up getting a 5.9% rate, which is, by FAR, the highest APR I've paid in my life, but I got a sweet deal for my car. Many guys over at rx8club were like WTF when I posted how much I paid for my R3 -- which, by the way, is already 1/4th paid off.

Also, it's kinda weird that I pay Toyota Financial Services for a Mazda...lol

I'm glad you get it. Most people don't. They read a buying guide off of Edmunds.com that was written by a guy who worked at a car dealership for three weeks and take it as gospel. There are so many different ways to make a great car deal, it's just stupid when I read things online that say things like, "negotiate the price of the car before you mention you have a trade" or "whatever you do, don't act like you want to buy the car right then."

Simple trick to make sure to get the runaround and leave with a bad taste in your mouth is to go in without knowing what you want, insist on getting rates you don't qualify for (my credit union is advertising 3.9%.... blah, blah), make unreasonably low offers on the car or truck, give them the impression you are not serious about buying a car and make sure you've memorized every trick that msn.com has taught you. Also, bring a bad attitude and make sure that everyone at the dealership knows how much better you are than they are. Only two things happen when a customer tells the dealership that they "know how to play this game and you won't put one over on me" and they're both bad for the customer. The dealership will either go to great lengths to put one over on the customer or they will give him bullshit numbers and the runaround.

Never underestimate how badly the dealership wants to sell you a car. The person that walks in and says "I want to buy this car (pointing at a car) today and I heard you were the best place to buy it from" will get treated like royalty. Wanna make sure you pay as little as possible? Be friendly, share stories about your kids and most of all, just refuse to leave until the numbers are where you think they should be. You want to buy a car, they want to sell you a car. If the dealership makes just $1 on a brand new car, they will be happy to sell it to you for just $1 profit if they like you. Give them all of the information they need to put it together, keep a smile on your face and just don't leave until you get the numbers you want.

I'm ranting now, my apologies. It's a slow day at the dealership.

 

[Pariah]

Don't have any nightmare stories to report. First car I financed I got a 7.5% rate from the dealership. A couple weeks later after I signed all the paperwork and had the car, I got a letter from the credit union the loan was through that they had reviewed my credit again, and dropped my rate to 5.5%.

Current car I have is financed with a 0% APR loan. Pay cash for a car with an interest free loan? No thanx.

 

[LTC8K6]

GMAC is now financing Chrysler/Dodge/Jeep...

 

[amdhunter]

...it's just stupid when I read things online that say things like, "negotiate the price of the car before you mention you have a trade"

Heh, when the salesman I dealt with took me out to see my car, I walked over to my GLi and threw the paperwork in. He was dumbfounded. He asked if it was my car, I said yeah - I just wanted the RX-8 for shits n giggles.

Guy looked pissed and told me how he could have worked a deal on a trade in and I could have made a killing...lol

He looked super duper disappointed that I didn't even mention I had a car. :awe: For some reason, dealerships saw big dollar signs with my GLi.

 

[StageLeft]

First moved to the US and had zero credit history and needed a car badly, I came very close to buying a cavalier at 60 months on 10.5% interest. And I had no money with which to even buy a junker, so I was in a desperate spot. Thankfully a friend lent me his bike for several months so I rode around the Alabama sun with that, then later that year bought an old beater with cash, thankful to this day I didn't buy that POS Cavalier.

 

[StageLeft]

I find out in two weeks time if I have become chartered. If so, then I will get a good pay rise and to reward myself I will be buying a new car.

I'm looking at a second-hand BMW M3 or Audi RS4. My car is worth about £7k and I will be borrowing about £23k. Looking on the 'net I can get a personal loan from a bank for about 8% APR. Finance through a dealer is running at about 13% according to websites, although I agree with you that I need to check this out with a dealer to see if they can beat 8% APR.

I've had two loans so far through HSBC and Alliance and Leicester; both loans are paid off now and I always met the monthly repayments on time, so I assume my credit rating must be pretty good. I also have and I have had various contracts for my mobile phone, which again I've always paid on time.

I do not have a mortgage (I rent a room at the moment), very little outgoings (and debt) since I'm single with quite a bit of disposable income. I have no interest in buying my own house or flat.

Well, this all sounds like a terrible idea. If you're entertaining the idea of borrowing that much cash at such a high interest rate it shows you have little to no cash on the side, which doesn't gel well with buying a used M3 or RS4, does it? Hopefully you realize that even if the M3 is problem-free maintenance on it is quite dear. And the RS4, forget it.

just refuse to leave until the numbers are where you think they should be.

The problem with this approach is that if i sit in a dealership for 3 hours i've wasted 3 hours whereas the dealership has wasted only 12 minutes--the time they actually spent on me, the rest being filler while the sales manager is working on other sh*t. When I got our last car two months ago I told the guy at the get go I had a hardstop in about an hour and had to leave. He moved fast and I did leave at that hour point and went back later. It's well known that dealerships love to keep people sitting in that chair bored/stressing for as long as possible. The only way to take that away from them is to just leave.