Financing denied. Yo Yo or Spot Delivery

[Jwb211]

Sound advice. But the dealer could care less. Once they get you to initially get your loan through them (really not them, 3rd party) they get a kickback. So you refinancing elsew

They could care less if you refinance later with another institution. They already got their kickback from their lender. My jeep dealer tried to talk me out of paying cash, "shaky economy etc etc". I said "why, so you can get a kickback"? He didn't answer.
But your advice is sound, nonetheless.

Thats not exactly true in every case. Sometimes the kickback is over the life of the loan. Some are “safe” after 3 months or they get a charge back. It just depends on the lending institution I suppose.

People with good credit and cash are not what dealers want. That’s not how they make money. For the most part they want people with shaky credit that make poor financial decisions. They can get more of those type of people to sign anything they put in front of them. That old ”what would you like your note to be?“ isn’t for nothing. $300 a month for that pickup? With a warranty on the windshield and wheels too?! Hell yeah I will sign a 60 month note at 7.9%! It only 300 bucks a month. They gladly pay 30k for a 10k truck.

Its always been bad but over the past few years there have been record numbers of bad car deals made and I personally believe it is a ticking timebomb.

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[Deleted member 59498]

Thats not exactly true in every case. Sometimes the kickback is over the life of the loan. Some are “safe” after 3 months or they get a charge back. It just depends on the lending institution I suppose.

People with good credit and cash are not what dealers want. That’s not how they make money. For the most part they want people with shaky credit that make poor financial decisions. They can get more of those type of people to sign anything they put in front of them. That old ”what would you like your note to be?“ isn’t for nothing. $300 a month for that pickup? With a warranty on the windshield and wheels too?! Hell yeah I will sign a 60 month note at 7.9%! It only 300 bucks a month. They gladly pay 30k for a 10k truck.

Its always been bad but over the past few years there have been record numbers of bad car deals made and I personally believe it is a ticking timebomb.

Yep I agree, predatory practice is much easier with someone with shaky credit. Dealer makes more money off someone who uses the dealer for financing and has shaky credit. Many times the person buying feels like the dealer is their friend and is helping them but not really. Not trying to sound like some expert on it but seen it before, I have been on the receiving end when I was younger. I bought a BMW motor cycle. They had approved me for 3% for 3 years or something like that 3 for 3 I think it was called, when I got to the dealer they said they did everything they could to get me the deal and it would be 6%. I was like oh man thanks for helping me! Live and learn, I am sure the dealer pocketed that 3%.

They make less money off people who come in with a check from my Credit Union or an approval letter. Don't run my credit, don't even try to negotiate a rate, even if they beat it by .5% I have no desire to leave my Credit Union.

 

[Geos7812]

This happened to me. Dealers aren’t financing companies. They do the bare minimum of underwriting and then tell you what they they think they can do. In my case there is a form that I signed that said if they can get me financed for under 21% that I have to take the car. They quoted me 4.5% and then on Monday when my loan was approved it came back at 6% and a shorter term. Complete scam but I signed it and no way to get out. I made a few payments and then refinanced it.

Geoff

 

[m3reno]

This happened to me also! Gave them my trade and got a great deal on a Jeep Patriot! A week later they called and said they made a mistake on the price. My old vehicle was sent to auction and they couldn't get it back and wanted me to sign the new paper work. I spoke with a lawyer and he told me it's called a yo-yo scam and that is illegal. I called the dealership and spoke with the manager and said I was going to expose them, so after a few minutes was told everything was fine.

 

[hiimmike]

Sound advice. But the dealer could care less. Once they get you to initially get your loan through them (really not them, 3rd party) they get a kickback. So you refinancing elsew

They could care less if you refinance later with another institution. They already got their kickback from their lender. My jeep dealer tried to talk me out of paying cash, "shaky economy etc etc". I said "why, so you can get a kickback"? He didn't answer.
But your advice is sound, nonetheless.

nope, there is a chargeback to protect the lender in an indirect deal. I was a consumer lender for 7 years and did many indirect deals. This is why I hate F&I guys, I’ve seen what they’ll do. I’ll give you two common examples that drive me crazy.

1) Customer calls us and asks us our rate, we give them our standard rate. Customer goes to the dealer and the dealer bumps them 3% above what we tell the dealer the customer is approved for. Now the dealer has made that extra interest in up front profit while the financial institution hopes the customer takes the full term to pay off the loan so we can recoup the upfront money we paid the dealer for the loan. The customer hen comes in pissed off at us because we told them they were approved for a lower rate. There is protection to the financial institution though, I’m the indirect contract, if a customer pays off a loan within 90 days (every contract is different but I assure you there is one), then the lender can issue a chargeback for the full amount of funds paid to the dealer. I assure you the dealership does indeed take the money away from the F&I guy if this happens. The dealer can also be nice (but they very rarely were) and tell the customer they’re approved at the exact rate we approved them for. Since there is no bump in interest, the lender will then give the dealer a flat fee of like $250, which is nothing compared to a few thousand, hence why they rarely do it. No way to make 6 figures as an F&I guy by doing flat fee deals. They will take the rate that they can bump the highest and tell you you’re approved for that.

2) F&I guys sells GAP insurance on a loan where the customer has 20%+ down and sell it for $700-$1000. We sold GAP for $295 and covered up to 125% LTV. That’s more pure profit in a dealers bank. Generally, if you finance for 5 years and have 10% down, you shouldn’t be upside down on your vehicle but these sleezeballs know it and don’t care.

 

[hiimmike]

Anyone want loan advice, I’m happy to give you my life experience to ponder.

 

[Jwb211]

Yep I agree, predatory practice is much easier with someone with shaky credit. Dealer makes more money off someone who uses the dealer for financing and has shaky credit. Many times the person buying feels like the dealer is their friend and is helping them but not really. Not trying to sound like some expert on it but seen it before, I have been on the receiving end when I was younger. I bought a BMW motor cycle. They had approved me for 3% for 3 years or something like that 3 for 3 I think it was called, when I got to the dealer they said they did everything they could to get me the deal and it would be 6%. I was like oh man thanks for helping me! Live and learn, I am sure the dealer pocketed that 3%.

They make less money off people who come in with a check from my Credit Union or an approval letter. Don't run my credit, don't even try to negotiate a rate, even if they beat it by .5% I have no desire to leave my Credit Union.

No kidding. The first car of the lot I bought was at 19 or 20. I didn’t know any better or have anyone for guidance at that point in life. I did not have a clue what I was signing and was frankly just in awe they were going to let me get It. A new (demo) red Trans Am. Holy hell did they screw me to the wall! I got smart...er after a few years and refinanced with a bank and paid it off probably for the second time lol. Looking back on it years later, I bet they were high fiving and laughing their asses off when I drove off. I found the paperwork several years ago and I don’t remember the interest rate now but WOW! It was astronomical. Ignorance is bliss and when I drove off in that car I was king of the world in my mind. Sadly grown folks stil do it every day.

My brother and I had lunch with a relative a month or two ago. He had just picked up a new truck. About 80something k worth. He had just bought a new one less than a year earlier. We were asking him about the deal in conversation. Curious how they were valuing trades ect. Come to find out he sold the old truck to his buddy who is a wholesaler for payoff. Payoff was about 15k under trade in. We both commented at damn near the same time about him at least getting the tax credit by doing an in and out. Then we got this blank look from him and realized he had never thought to do that or possibly didn’t know what it was and his buddy didn’t mention it. His buddy didn’t mention it because he would get title faster not doing it and didn’t care about saving him money. So while this family member has access to credit he doesn’t have money per say. On the way back we were doing the math and realized he left 7.5-8k out there in tax credit and then took a beating selling to his buddy. So in one deal he lost ~23k on top of whatever they got him for on the new truck. Some people never learn and knowing him he will do it again the next time.

 

[Deleted member 59498]

On my last deal in March, my Finance guy was like I am not even going to try and sell you on these things but I will give you a great deal on 6y 60k bumper to bumper for great price if interested. I was like hell yeah that is a good deal. So getting some gray in the hair has its advantages in some instances!

 

[Catdom]

nope, there is a chargeback to protect the lender in an indirect deal. I was a consumer lender for 7 years and did many indirect deals. This is why I hate F&I guys, I’ve seen what they’ll do. I’ll give you two common examples that drive me crazy.

1) Customer calls us and asks us our rate, we give them our standard rate. Customer goes to the dealer and the dealer bumps them 3% above what we tell the dealer the customer is approved for. Now the dealer has made that extra interest in up front profit while the financial institution hopes the customer takes the full term to pay off the loan so we can recoup the upfront money we paid the dealer for the loan. The customer hen comes in pissed off at us because we told them they were approved for a lower rate. There is protection to the financial institution though, I’m the indirect contract, if a customer pays off a loan within 90 days (every contract is different but I assure you there is one), then the lender can issue a chargeback for the full amount of funds paid to the dealer. I assure you the dealership does indeed take the money away from the F&I guy if this happens. The dealer can also be nice (but they very rarely were) and tell the customer they’re approved at the exact rate we approved them for. Since there is no bump in interest, the lender will then give the dealer a flat fee of like $250, which is nothing compared to a few thousand, hence why they rarely do it. No way to make 6 figures as an F&I guy by doing flat fee deals. They will take the rate that they can bump the highest and tell you you’re approved for that.

2) F&I guys sells GAP insurance on a loan where the customer has 20%+ down and sell it for $700-$1000. We sold GAP for $295 and covered up to 125% LTV. That’s more pure profit in a dealers bank. Generally, if you finance for 5 years and have 10% down, you shouldn’t be upside down on your vehicle but these sleezeballs know it and don’t care.

So I was wrong about dealers getting a kickback for convincing a buyer to finance rather than pay cash?

 

[Deleted member 59498]

Maybe cash is good now with interest rates going up? But I don't think they have gone up that much. You can make a lot more money with your cash than purchasing a car. I got 2.29%. Which is basically free to me. I can make more than that in just simple gov bonds, paying cash for a car is a bad investment to me.

Also cash gives you no more strength in buying than a preapproval makes no difference to dealers. I always snicker when people say well I will pay cash and get a better deal. No.

 

[Some Random Guy]

Maybe cash is good now with interest rates going up? But I don't think they have gone up that much. You can make a lot more money with your cash than purchasing a car. I got 2.29%. Which is basically free to me. I can make more than that in just simple gov bonds, paying cash for a car is a bad investment to me.

Also cash gives you no more strength in buying than a preapproval makes no difference to dealers. I always snicker when people say well I will pay cash and get a better deal. No.

Pure ROI, this is true. Some of us are looking to make other financial moves which changes the game. For instance, if I were looking to buy my first house I may want to keep my debt below 8% of my gross income to maximize mortgage qualification.
So you’re right, but more plans/variables may complicate things.

 

[dahacker]

Apparently I’m financing with Chrysler Capital to get some kind of $1000 discount. I’m well qualified and can refinance with Navy Federal at 2.49%, if necessary. Any gotchas with Chrysler Capital initial loan terms/process I should watch out for?

What are Chrysler Capital rates right now? This isn’t something it seems they publish.

 

[Jwb211]

Apparently I’m financing with Chrysler Capital to get some kind of $1000 discount. I’m well qualified and can refinance with Navy Federal at 2.49%, if necessary. Any gotchas with Chrysler Capital initial loan terms/process I should watch out for?

What are Chrysler Capital rates right now? This isn’t something it seems they publish.

It has been a little over a month ago but I was originally told my financing would be through them at 2.0%. Don’t know if rates have moved since or of any downfalls since it never happened. I would assume they would be a pretty legit lender. The deal with Navy does not sound like a bad fallback in the event something goes south. A CU in town is or was offering 1.9 for 60 and 2.3 for 72.

 

[JABCAT]

Apparently I’m financing with Chrysler Capital to get some kind of $1000 discount. I’m well qualified and can refinance with Navy Federal at 2.49%, if necessary. Any gotchas with Chrysler Capital initial loan terms/process I should watch out for?

What are Chrysler Capital rates right now? This isn’t something it seems they publish.

Apply with Chrysler Capital directly on their website and they’ll tell you what your rate & term is.

“apparently I’m financing…” is not a good way to go into this.

 

[ogo]

Apparently I’m financing with Chrysler Capital to get some kind of $1000 discount. I’m well qualified and can refinance with Navy Federal at 2.49%, if necessary. Any gotchas with Chrysler Capital initial loan terms/process I should watch out for?

What are Chrysler Capital rates right now? This isn’t something it seems they publish.

Agree with what others have said. Apply on the website to see what's being offered.
I saw in another post you are getting your Wrangler from Koons in VA. I'll be doing the same thing.
The $1000 is a dealer incentive if you finance through Chrysler Financial with Koons. Nothing stopping you from getting pre-approved for other rates.

Depending on the length of the loan you are financing for, a rate that's 1% lower could easily save that $1000 incentive over the course of the loan.

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