So I just bought my first car...

machielsj · #1 (**permalink**) 02-20-2009, 08:54 AM

Ok, I was really impressed with myself when haggling for my first dealer purchased vehicle. I had expected to have to have my father co-sign, but it turns out my credit was awesome and I was approved without him. I end up getting 3300 dollars for my junker trade in (which I happen to know was sold the same night I turned it in) and a reasonable amount off the sticker with an upgraded warranty and the whole 9 yards. Anyway, I sign all the papers and had an apr of about 6.7 Its been about a week and the finance guy calls me back and says that my debt to income ratio is off and he either needs to bump up the interest rate or have my father co-sign. Is this legit? I sign the papers at 6.7 apr and not for anything else. Can I just take the car back and ask for my car back(with full knowledge they dont have it) or my 3300 dollar check?

disneysteve · #2 (**permalink**) 02-20-2009, 09:05 AM

That is a common scam. Take the car back and tell them you don't want it unless they agree to honor the original terms. Absolutely walk away if they refuse.

machielsj · #3 (**permalink**) 02-20-2009, 09:13 AM

Do I ask for a check for the agreed upon trade in? I know that the value of my trade in was grossly inflated in the silly numbers game they play. And at this point, what is the status of my previous car loan?

feh · #4 (**permalink**) 02-20-2009, 10:04 AM

You've got a signed contract at an agreed upon interest rate. Tell them to take a hike.

boosami · #5 (**permalink**) 02-20-2009, 10:12 AM

It's called a "Yo-Yo Financing Scam" and is used by shady car dealerships. It is ILLEGAL under most state law and under the Federal Truth in Lending Act. It is also illegal of them to have sold your trade-in before securing financing for your new car. You may need a lawyer to work all this out since it can't be undone by returning the car and getting the trade-in back.

I strongly urge you to at least talk to a lawyer who specializes in this kind of thing. If you cannot get a lawyer:
DO NOT go back and sign new paperwork with them.
DO talk to them and tell them they are breaking the law and you will be reporting them.
DO report them to the state Attorney General and the BBB.

Pitman · #6 (**permalink**) 02-20-2009, 10:14 AM

Quote:

Originally Posted by disneysteve

That is a common scam. Take the car back and tell them you don't want it unless they agree to honor the original terms. Absolutely walk away if they refuse.

Do exactly what DS just stated above, and I do mean exactly.

boosami · #7 (**permalink**) 02-20-2009, 10:17 AM

How do you know your car sold the same night you turned it in? This would be uncommon, and the dealer may be lying to give you no other way out than to renegotiate terms. Usually it takes some time to get the car property in the dealer inventory, and cleaned up and ready to be sold.

machielsj · #8 (**permalink**) 02-20-2009, 02:25 PM

I need to go back and carefully read the contract. I have no problem taking it back in and telling them to shove it, but I would like to go in knowing what to do about the trade in money. I know it was sold that night because the service manager is a good friend of mine.

GREENBACK · #9 (**permalink**) 02-20-2009, 02:35 PM

You're dealing with scumbag used car dealers that give the legit ones a bad rep.. I wouldn't give these idiots the time of day. I would report them and not even bother picking up the phone if they call. If you do answer tell them to read the contract they agreed on with you and hang up. I should say if there isn't something in that contract that would allow them to do this. Then follow the advice given above.

disneysteve · #10 (**permalink**) 02-20-2009, 03:28 PM

For future reference, this is why you arrange your financing BEFORE you go to the dealership.

I wonder if it is too late to finance elsewhere. Does anyone know if OP could still take a loan from the bank or CU if he already has the car?

humandraydel · #11 (**permalink**) 02-20-2009, 05:08 PM

Quote:

Originally Posted by disneysteve

For future reference, this is why you arrange your financing BEFORE you go to the dealership.

I wonder if it is too late to finance elsewhere. Does anyone know if OP could still take a loan from the bank or CU if he already has the car?

Of course he could refinance. It's just like buying a used car off of a lot - as long as the loan is for less than the value of the car and the borrower has good credit, a bank shouldn't have a problem lending.

Goldy1 · #12 (**permalink**) 02-21-2009, 01:42 PM

I have no advice but it is good to know this kind of thing occurs so I can be on the look out. Dont' people like this put themselves in our shoes? so scandoulous.

I hated the whole car buying process.

irmanator · #13 (**permalink**) 02-22-2009, 05:26 AM

Wondering how this turned out?

mommyof4 · #14 (**permalink**) 02-22-2009, 06:08 AM

Quote:

Originally Posted by irmanator

Wondering how this turned out?

I want to know, too.

Rainelli · #15 (**permalink**) 02-22-2009, 05:47 PM

disneysteve is right!it's the most common scam,believed it or not,later on it will be the pain on your neck,you better be careful in trusting a person with regards to handling this kind of thing.

tripods68 · #16 (**permalink**) 02-22-2009, 06:48 PM

I wouldn't call them as sofar SCAMBUG! They too are trying to make a living. The key is the renegotiation part.

You counter for a much lower renegotiated price. In other words, if their bumping the interest by 2% or $1200 interest cost during life of the financing terms. Use that amount to lower the agreed negotiated price.

In my particular case, they bumped my interest by 1% or $788.00 (5 year term). I asked them to redo the terms and they agreed from $31,500 less $788 = $30,712 new price so that I wouldn't walk away.
If they couldn't do this for you, do the same thing.

arthurb999 · #17 (**permalink**) 02-23-2009, 06:03 AM

Quote:

Originally Posted by tripods68

I wouldn't call them as sofar SCAMBUG! They too are trying to make a living. The key is the renegotiation part.

.

I strongly disagree with this statement. Making a living is one thing, not sticking to your word is another.

disneysteve · #18 (**permalink**) 02-23-2009, 07:44 AM

Quote:

Originally Posted by tripods68

I wouldn't call them as sofar SCAMBUG! They too are trying to make a living. The key is the renegotiation part.

Quote:

Originally Posted by arthurb999

I strongly disagree with this statement. Making a living is one thing, not sticking to your word is another.

I agree with Arthur. This shouldn't happen. You shouldn't have to go back and renegotiate the purchase price AFTER the contract is signed. It is a sleazy, deceptive practice.

tripods68 · #19 (**permalink**) 02-23-2009, 01:22 PM

Quote:

Originally Posted by disneysteve

I agree with Arthur. This shouldn't happen. You shouldn't have to go back and renegotiate the purchase price AFTER the contract is signed. It is a sleazy, deceptive practice.

I agree---it's sleazy!

GREENBACK · #20 (**permalink**) 02-23-2009, 02:24 PM

I'll say it again. They are scumbags taking advantage of an opportunity. What they are doing is illegal and they knew they had a "pigeon" they could run this one on. There is nothing honorable here. Somone who does this stuff for a living wouldn't be off on the #'s like they claim to be. If they are, then they are just idiots and should accept their error and learn from this.

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