I worked for Vista Chevrolet about 20 years ago. I sold a young single mother a car. She had saved for months for a down payment. I helped her find the perfect used car. She left the dealership happy and I felt good about helping her. The lot manager came out and put a hand on my shoulder and told me they would be reposessing the car within a week or two because she didn't get approved for a loan. They knew before she left the lot and still took her money. I quit the next day.
I learned how to play their game against them at an early age. I went in and pretended like I was ignorant, poor and incapable of getting a car loan, negotiated a below market price for the car and financed the car at highway robbery level interest rate through the dealer. I then came back the next day and wrote a check to pay off the lucrative loan and they were pissed. I paid not a dime of interest which is their bread and butter.
Must not have been too long ago. 15-20yrs ago there would be penalty for paying off loans with most lenders. Nowadays it's competitive enough where loans with that kind of conditions are rare.
One time after GM spun off GMAC as a separate company (I forget the new name) they had a deal where if you financed with them you would get $2,000 of the price of a new car. I asked them what the minimum was I had to finance. They said $5,000. So I wrote a check for x-5000, borrowed 5000, paid 1 months interest on the loan ($160 IIRC) and then paid it off. So basically notGMAC sold me $2,000 for $160. Id like to do that every day.
Back in 1999, I bought a used 1996 Dodge RAM from a Dodge dealer somewhere around Sacramento. A couple weeks later they tried this with me. I knew it was BS, so I said okay, just come get the truck. They refused, and insisted I sign new papers. I said no, come get the truck. This went back and forth several times over a few days and I said the same thing every time. They finally just gave up and I kept the truck with the original terms.
I'm glad you never backed down, and this video, along with my friend, has taught me a valuable lesson on dealership scams, especially if you do business on a Saturday.
@@adotintheshark4848 That's what I don't get. If you don't agree to the new deal, then you haven't agreed to any deal at all. How they can just take your money and your old car without an agreement is completely baffling. That's straight up theft or fraud in any other context.
What they probably did was made a second attempt with the bank and this time they bought the contract. The other thing dealers do is become your co-signer if they want the deal bad enough. They will sign behind you without you knowing. So if you don't make the payments they take the vehicle back and lose a lot of money.
A dealer in San Diego tried this with me when I was stationed there in 1996. It was for a brand new 1997 Jeep Wrangler and a month later they called me back to try to get me to sign “new paperwork” that had something in the 30% interest range. I laughed at them and went to base legal. Evidently, the JAG lawyers knew this dealer quite well. A few weeks later I was told to return the Jeep but beforehand, take it over to Fiesta Island and have a good time with it and that no matter what I did, it would be ok. Well you don’t tell an E-1 sailor that, we tore that thing up!!! Tore the front bumper plastic off, scratches all down the side, a small tree lodged in the skid plate, and no gas….the salesman almost fainted when he saw the Jeep as I’m pretty sure he got fired. Never heard anything about it again…
We had a similar situation in Fayetteville outside of Fort Bragg. Got up to our CSM and apparently he had been personally burned this way, so my soldier, me (SGT) our PSG (SFC), 1SG, CSM, and a Major I'd never met before went to the dealership. 1SG, CSM, and MAJ went into the office together, some words were said, and they came out with a new contract with very good terms.
This happened to me in 2019, the dealership called up a week after I signed the contract and said to come in that there was a problem with my financing, when I got there they said my interest rate was going to be 11 percent so I threw the keys on the desk and demanded my car back they ended up sticking with the original deal. I learned along time ago that you should never buy something your not willing to walk away from..
Yes the dealers make money off financing but are often reluctant to pass any of that savings onto the buyer. So for my last car I talked the dealer down to a better price telling them I would finance through them. Then a month later I found a much better rate through a credit union and refinanced out of dealer financing.
This happened to me at Acura of Columbus in 2005. Sales manager got really rude with me and told me "what I was going to do" after they told me my trade was gone. I hung up on them after I said I was going to hire an attorney. Somebody else called me back saying "please dont do that in a super soft nice voice". Ended up just using my own bank.
Another thing dealers will do is have a listening device at the salesperson's desk. He will say that he has to go see his boss about approval of the price. However, I noticed that I was waiting way too long. I suspected a listening device as they wanted to hear our discussion about the deal. To test it, I said " lets get out of here" Right after that the salesperson came running back. Watch what you say as they are listening.
I would guess that in may states, including my state of residence, NJ, that would be illegal. That being said, however, there was a dealer in my home town who not only bugged the salesmen's desks, but bugged HIS OWN BUSINESS PARTNER! When someone found the bug, he was tried and convicted on wiretapping charges, and lost not only that dealership (to his business partner), but in addition, two other dealerships that he also had a majority interest in because the auto makers granting those franchises would not have a convicted felon holding franchises for their brand of car. There are lines that he shouldn't have crossed (and it was alleged that one of those lines was a white one made of powder, on a mirror, but that was never proven).
You could use that to your advantage by "secretly" saying you won't pay over $X when they come back but could "afford" $Y if they offer that. That may make the car salesman offer $Y thinking that's your ceiling.
This is the kind of thing that's made me avoid dealerships. I pay cash for my cars--so I never have to worry about anything more than "Did I buy the right car?" I've been aware of some of the games dealerships play since I was a kid...and even if I decided to buy a car using financing, I'd get the financing through my credit union, not the dirty dealership. It amazes me sometimes, how car salesmen earned themselves a truly horrible reputation, but don't seem to care about it enough to change their behavior. I suspect that, just like politicians, many/most of them are sociopaths.
Every time that I have purchased a car through a dealership, I let them arrange financing through the dealership and let them "rip me off" on interest rate but then negotiate the price of the car. They are willing to lower the price because they are getting the money back through the interest rate. Then I go to the DMV and take care of business. Then I go to my credit union and refinance the car to a lower interest rate. I pay off the dealership loan. That way they cannot come back and say that financing didn't go through. I sleep at night knowing that my relationship with them is over.
I thought in the case of a sub-prime loan, they put into the contract that you have to have it financed with the financing that they provide for X period of time. That ensures that they will get enough money off of the financing to make it worth their while.
A local dealer tried this crap on my son and daughter-in law. My son asked me what he should do, and I told him NOT to give then the additional $1,200.00 the dealer was demanding, and I would handle it. I went to the dealer, asked what was the original selling price of the car, and what was the out the door cash payoff. They were surprised, but gave me a figure. I took out my checkbook, wrote out a check for that amount, and told them to give me a "paid in full' receipt. I later told my son he could make his monthly car payments to me, (with 0% financing charge). Bottom line; before shopping for a car, save up any down payment you might need, get pre-approved for an Auto Loan from your bank or credit union, and never do a "trade in", (sell your old car yourself after taking delivery of it's replacement). When the dealer starts talking "finance", give them the name and phone number of YOUR lender.
@@dixietarian; in my youth I worked around a lot of car lots, and with their pricing structure, you lose money if you do a trade in. Yes, they offer you more for your car than you could usually sell it for on the open market, but that difference is more than made up for with their markup of the car they're selling you. Try this, ask for their very bottom price, but tell them you have no trade-in. Once you get them down to the very lowest out-the-door price, tell them you changed your mind, and want to trade in your old car. I guarantee you that out-the-door price will no longer be honored. Now, what is the "tax write-off" you're speaking of?
I work at a Ford dealer inspecting and repairing the trade ins. We don't touch them till the financing has gone through because a few times we have done all the needed repairs, brakes, tires etc. and the deal falls through. Customer gets his car back all fixed up.
I was working at a Southern California Mazda/Mitsubishi dealership that was also a Yugo dealer. They sold one Yugo and the financing fell through, so the man brought it back, no problem. The dealership decided that THEY'D carry the paper (at close to 0% interest) so they wouldn't have to take back what nobody in their right mind would have bought in the first place.
@@mrlucky5025 Ah yes, man goes into the parts shop and says "I'd like a muffler for my Yugo" and the guy behind the counter says "Sounds like a fair swap".
I remember this happen to the first time I bought a car as an adult. Being from smaller town, went to larger dealership. When they tried the yo-yo move, I decided "nope I'm not going to play that." I told them to come pick the car up. I didn't have a trade-in that had to be dealt with, and told them I refuse to assume the liability of driving a car that I no longer owned nor was financing to own. The salesperson, and one of his co-workers had to drive to pick the car up. It was Memorial Day weekend. Found out later from a friend who knew the car, that the salesperson got stopped at a DUI checkpoint, and blew past 0.08.
Hell! The rural dealers are ALWAYS cheaper and more honest. Smaller customer base, I walked out on a city dealer and save 2 or 3 grand buying it at a rural dealer. It alos had a LOT less mileage. Clearly it was the second car that the wife used. It was pristine too. I saw it before the detailed anything. It popped up an the website on my phone as I was sitting as the desk listening to the sales managers BS. I showed to the person I was with and we stepped away for a minute and agreed we would check it out even though it was a over an hours drive. We had allocated all afternoon anyway.
@@toriless I bought my last truck at a rural dealership a year ago. Didn't absolutely need it but did want a better tow vehicle to enjoy the last couple summers before my eldest goes off to college. I didn't get a better deal but they didn't gouge me and they treated me - and more importantly, my wife - a whole lot better. The trucks are usually my wife's DD, not mine. I only drive them for dump runs, towing duties and when we're out and about as a family. Should probably talk to her, and not down at her, if you want the sale...
I "yo-yo'd" a crappy dealership once. My mom got taken advantage of by a dealership that lied about her income to get a ridiculous loan for a ridiculous car. Thankfully, it happened on the Saturday before NYE so I was able to drive 2 hours from Indianapolis to South Bend, show the financing institution a tax return of my mom's, and get them to ask the dealership for income verification. If it weren't for the influence of your videos, I probably wouldn't have known to do that. Your channel is a treasure! I think I even messaged you about it on FB at the time, but just as a rant (not for help, as I know you're in Michigan and I'm in Indiana).
Most banks take it upon themselves to ask for income verification at the slightest hint that someone is inflating their income. A lot of banks just require it of everyone. That dealership likely has a cozy relationship with a shady bank that specializes in high risk lending. You'd be surprised how many customers ask you to do this though. I never understood it, and I never would do it.
@@Rowgue51 Both my car purchases I had to submit copies of a pay stub as proof of income before they'd even finish the loan paperwork to do the sale...actually had to arrange to do a small down payment to hold the first car I ever bought for a week or so because I was still waiting for my first "real job" pay stub and the hiring offer letter wasn't sufficient proof. Seems reasonable and only took a couple hours to process.
There was a car dealer group in the Atlanta area that was doing the 'not paying off loans of traded in cars' trick. Eventually the car finance companies cut them off and they were closed the next day.
Read up on Bill Heard dealerships. 1st "punishment" they got was to sell a few of their dealerships. In every market they were the #1 source of calls to 911. Finally taken completely down by the Feds. Probably not as common these days with things like Yelp.
I've never traded in a car that I still owed money on and it never even occurred to me that someone would do that. I mean it's obvious that people do it now that I think about it but, yeah, I guess my car buying habits are pretty frugal.
I sold cars in the early 90s. We had a couple guys that specialized in selling cars to people in “special financing” deals. Every single one would be sent home with a car. Every single one would be called back a few days later to say the financing fell through and they needed more money. Every one. Looking back it was kind if sickening.
There is a dealer in the area where I live where they advertise a new car at a very low price. When you call them about it they will say the car is still there and will be there when I come down to look at it. However, the car never existed in the first place and they only push on you a more expensive car. 10 years later I saw another car at the same dealer with the same low low price. I called and grilled the guy and got him to admit the car does not exist.
Sometimes the car exists but the price they advertise is "after special offers" and you have to qualify for literally every discount they could possibly get. So unless you're active military, who is also an active first responder, who also has an 800 credit score, who is trading in the same brand and also has a family member that works for the company (and sometimes more), you're not going to get the advertised price. But because there might be like, six people in the entire country that qualify, they can advertise for that price.
A dealer pulled this BS on my dad, they had a really sweet deal on their website, we went there and they said the car is out as a loaner but look at these other pricier cars, we asked why its advertised on the site as being available? we laughed so hard at them and left. Things like this is why I never buy new I always do private deals because regular people have less motive to rip you off.
This practice is so scandalous. This happened to my fiancee a couple of years back. Her trade-in was already paid off, and of course buy the time she was notified that they were taking the car back her trade-in was supposedly sold already and they left her completely empty handed. Downright despicable.
I had a dealership nightmare back in 2014. I paid cash for a 2006 Mercedes s600 and when I went to have it registered discovered it had a lean against the title for $8500. I contacted the dealer who told me that the dealership was in a lawsuit with the original owner who took out the loan on the car the same day they traded it in to cover the down payment on the new one. I fought with the dealer for 18 months while they kept sending me 30 day temporary tags every month and a couple $50 prepaid gas cards each time and covered the Benz with their dealers insurance until the state finally threatened to take their dealers license away prompting the dealer to offer me a full refund for the car back. Yea while it was a nightmare i basically drove that v12 Benz for almost 2 years without having to pay for insurance or gas and got every dime back I’d paid for it.
There are several things that make zero sense about that story. I'm guessing what they told you was just entirely made up, because it just can't happen the way they told you it did. Banks are not that stupid.
So where are the cops rushing in to seize all the assets and property under Civil Asset Forfeiture from this dealership? Since clearly their money is from criminal activity. What a system inflicted on us.
I bought my last car on a Saturday. The dealers are perfectly capable of running this thing called a ‘credit report’ at any time. They did not have to take my word for it.
@@jilbertb That too! No excuse for a dealership saying that they don’t know if our credit is good/bad. I’d chalk this up to a shady dealer. Sketchy financing, not paying off trade, etc. They deserved their $225k penalty. Despite the hassle and probable damage to their credit, I hope the customers feel they were made whole.
Many times credit is marginal. I worked at a dealership in 2000. We’d float poor credit buyers in cars all the time while the finance office tried to actually get them a deal with a lender. If you don’t send them out in a car that day, someone else will. People with bad credit will sign anything. I’m not saying that it’s right, just explaining that it did actually happen. I’d imagine the internet might make the process quicker today.
It's not just the credit report, it's finding a source for the financing. If your credit report is poor/marginal, they don't know if anyone will actually take the loan until business starts on Monday. What this means is they shouldn't be acting like everything is good to go on Sat.
@@mrlt1151 Makes sense in 2000. I assume that’s mostly a non-issue anymore with the immediate availability of electronic credit reports. What did the dealership do if the loan could not be secured back in the day?
Something similar happened to a coworker about twenty years ago. He went into a reputable dealership to purchase a used truck. He traded in his sedan for a nice truck (signed all of the paperwork) and left the dealership. Less than a week later the dealership called and asked him to return the truck because of financing troubles. My coworker even said himself that his credit was less than stellar and he was surprised that he got financing at all. He returned the truck only to find out that his sedan had been sold. The dealership did, however, get him financed on another truck. He left satisfied. I worked at a large car dealership that was in my family for many years. A young couple came in to purchase a new but modest vehicle. The sales manager told me to put their trade in the back because he wasn’t sure if the financing would go through. Sure enough, it didn’t. The young couple came back a couple of days later to retrieve their old car. It was a simple as that.
You know the situation is bad when the arbitrator you hand picked hammers you that hard for what you did. Every time I've ever financed a car, the salesman has never failed to say, "congratulations, you're approved". And that's usually before we even finalize the deal. From now on, I'm going to make sure to get that in writing.
Steve didn't mention the NAME of the dealership but it's, *GREENWAY HYUNDAI ORLANDO* .. So for all the Floridians watching this Make sure you Remember that *Greenway Hyundai Orlando* Uses this Sick borderline Criminal Tactic on it's unsuspecting customers !!
“Even though they sold your trade in”… Simple! Since the deal isn’t “final”, call the folks you “sold” my trade in to and tell THEM the sale isn’t final. Bring my damn old car back!
@@sparkyUSA1976 I worked as a mechanic for a dealership most of my life. I traded a truck in for another. They had me go into the office to sign off on my trade in. A couple had already bought it, signed paperwork, and were ready to take it before I even signed it as sold OR had my new replacement. Not related, but another example of dealers shoving them through the system.
20 year dealer here. Definitely abusing several good faith practices. 1. Trade should be paid off in 10 days from dealer. 2. if trade was sold, better find a way to keep them in car they bought. 3. None of this should take 3 weeks. Dealers like that don't usually last long with social media. Just like everything , there are good dealers and some that shouldn't show there face in public. I love some of your topics, especially the auto related ones.
I was in the auto industry for 45 years. I bought, sold, repaired, and even taught school. You always arrange financing BEFORE you start looking. That way you know your financial limits and avoid buying something too expensive. Thankfully in the state I was raised in that kind of financial trickery is not permitted.
I have a positive story. I was buying my first new car, mid 1990s, and sure that I looked pretty clueless about the process. We talked about financing, the salesman said they could arrange it at the dealership. Then he told me that I should look into making the deal through a credit union. I did just that, he saved me money, and it was less for the dealership and salesman, I presume. I will never forget his kindness.
That has nothing to do with the case Lehto is talking about here. This is about a DEALER advising the Johnsons they were approved for a loan, and then THREE weeks later telling them the financing fell through. As you can see, Lehto has a huge problem with the dealer being transparent about the financing of the sale. I believe you're intending to give financial advise to whomever is looking to buy a car, in which case it's common sense advise
@@xr500t I didnt know you were with TH-cams comment policy department. I didn’t know someone can’t give good advice about financing on a video about car financing. Yeah two different things… not.
I started watching your channel on a business trip and continued since. I really liked my Business Law class during my MBA program and this show is exactly why, fun discussions about real-world cases around tort/UFC can be very interesting when done right, which is what you do, Steve. Thank you.
Be careful...Here's a "tactic" that was pulled on me and my mother when I was young and needed a co-signer...long story short, it turned out that my credit was so bad(yay divorce's!) that even her co-signing would not get me financing, but their scam was to somehow re-submit everything without my name on the paperwork. When we went to the credit union to see about having it all put into my name to relieve my mom of her financial responsibility we found out they had never heard of me, it was all in her name!
I don't believe that your story is possible. The entire point of a cosigner is to take responsibility for payment on the debt if the initial signor doesn't follow through on their obligation. The only way a cosigner wouldn't be sufficient would be if the cosigner also didn't have a sufficient finances. It sounds more like your mother was willing to take full financial responsibility and let you get away free and clear if things went badly.
@@finris1 well, you're wrong. It happened. WTF would I make up a story like this? It was simple, they just submitted it in my mother's name, omitted mine.
the paperwork my mother and I looked over had us both signed on it. My mom was too wise to not look something like that over. Single mom, professional nurse, budgeted to the penny. I suspect they simply took my name off or rewrote it without my name & bad credit. @@bch5513
Something similar happened to me when I was young and had no credit history. They put me as the cosigner and my mom as the main signer. I didn't notice till I paid it off and the title came with my mom's name on it.
This is exactly what happened to me and my wife shortly before we got married trying to buy a Pontiac G6 for her. We ended up driving it for just shy of 4 weeks before they came back and said Hey we don't have financing for you. What's hilarious is we went to another dealer and got a better deal on a brand new car Literally days after this so I have no clue how they couldn't find financing for us one another place was able to do it within hours
First thing I would do is check with the Financial Institution that financed it to begin with. This is why you should always use your own financing. The simple fact that a Car Vendor can “YoYo”you should STOP you from buying a car in that state.
I had a Kia dealership try to do this to me about 20 years ago in Prescott Valley, AZ. My husband basically “explained” to them that we weren’t bringing the car back and that we would get an attorney involved if necessary. We didn’t hear any more about it after that. (Of course the car turned out to be a piece of crap, but I have a Mazda now. zoom zoom) 😊
I've had bad business dealings with that particular Kia dealer a few times over the years, but never over a car. That is to say they are scum in every respect, not just the car lot.
This happened to a coworker of mine about 20 years ago. Traded in his small truck on a newer full size. Dealer let him leave with the new truck then 2 days later claimed financing fell through. He decided he wanted his old truck back but they claimed it was already sent to auction and there was nothing they could do (2 days had passed).Took weeks to resolve. I eventually saw him driving his old truck again so I assume there was something they could do.
All the cars I've bought have been in Washington State and they have had a strict law on the books for years prohibiting it. The dealerships have the ability to start loans all day and the weekend.
Dealerships shouldn't exist. They provide no value and they increase the cost of the car. They only stay in business because of outdated laws that say you can't buy directly from a manufacturer. This was a great video. I'll never finance a car through the dealership because of it.
I absolutely refuse to allow any dealership to finance my vehicle. I've always gone to my bank, told them what vehicle I'm wanting to buy and to cut the check. Then and only then do I go to the dealership and start talking numbers. Once I get them down to the price I want and they pass me off to the finance people, that's when I pull out my checkbook. I cannot tell you how many times I've pissed them off doing this because they'll give me a really good price, knowing they're going to screw me on the finance & fees. Last time I did this, they tried to say it "doesn't work like that and you can't do it." I shrugged, said have a good day and went to the next dealer.
They tried to do this to me today. Mind you I already had financing approved through my bank. They kept trying to get me to switch financing companies. What a miserable experience. They actually tried to get me to sign a form that this was possible. And to arbitration. I refused. I hate dealers.
I think it should be a law that all contracts must have full recipricocity. If the dealership has one or more terms under which they can take the car back, the customer needs an equal number of ways to cancel the sale and get their money back. Plus penalties on either side: You want your money back, they get the car and charge a penalty. They want the car back, they have to refund plus a penalty. It should not be legal to allow contracts that force people to, say, agree to future TOS updates or lose access to past functionality, or to make people give up their right to their day in court via forced arbitration. These things are predatory, and work to allow companies and large entities to protect themselves against those who already have little recourse.
years ago, i went to the local dodge dealer here in torrance, the car was a ford fushion. We agreed to a price and went to the office to close the deal. I told them i was not going to finance and pay with a check, And they can hold the car until the check cleared their bank. Both myself and the dealer used the same bank. Two days after the deal was made, i got a call that the check was bad. I knew this was wrong, i called my banker and got into a conference call with the dealer and my banker. I asked the banker has my check been presented to the bank. When he said no, no check for that amount had been presented and it would have easily cleared. Then dealer hung up. Turns out that the car I was buying, was a car that they needed to sell and finance to make any profit. Basically they are very dishonest
Something like this almost happened to my girlfriend once. She wanted to buy a used prius and a dealership in the region which had what she wanted. Initially we wanted to self finance, but for some reason the dealership said they had to do it which should have been the first red flag. A week later she got the call that there was a problem with the terms and they tried to push her into signing a contract changing everything. Afterwards we immediately went to our credit union, applied for a new car loan, and refinanced the old loan into the new one closing it out. They can't call back about financing problems if they have been fully paid off. Weirdly, the bank they chose STILL sends us letters years later. It's stupid and annoying. For my own experience, I was once in the market for a new car as well. I had done my research into the kind of car I wanted and what price I could afford. I went to a dealership telling them what I want and that I wanted to do a test drive. They said that I had to apply for a loan through them even though I told them that I have my own bank who I'd finance through. Reluctantly I went through the motions, was approved, and then I said, "OK, I want to test drive the car now" and then they explained that the dealership is split in two and that the loan application I filed was for this other half of the dealership and that if I wanted to test drive the car I'd have to do another loan application. Keeping in mind that this was mere MOMENTS after finishing one already and that they already knew exactly what I wanted. Since repeated loan applications damage credit I told them that I won't be doing that and left. Of course I understood that they knew multiple credit checks were bad. More likely than not, if I did the second check, it would have been declined or they'd at least say that it was. They'd then have used that to try and push me into a more expensive new car that I didn't want. Suffice to say their little scam didn't work. Of course, because they pulled my credit I had to wait a year for the credit pull to drop off my report and by then I had less of a need for one. That was my first and only experience trying to buy a car for myself at a dealership. The transaction should be simple: They should just list a price and expect the customer to pay that price. Customers should do their own financing. Unfortunately they use the financing front as a tool to scam customers in multiple ways. The dealership experience is why I would rather walk then buy a car if buying a car means having to deal with those people. In my opinion the dealership shouldn't even exist anymore. The car makers should be selling direct to consumer. Cut out the middle man who knows nothing better than how to scam people. Of course, for that to happen, laws would have to change that prohibit car makers from selling to anyone other than a dealership. If I ever need to buy a car I'd sooner import one from China than go to a car dealership.
@@kerryedavis That's a flawed argument, but let me give you a recent example: My girlfriend's car is a 2013 Prius which did have a warranty issue. Apparently the alternator can go back resulting in the car just not working. As a consequence when the electronics died she assumed it was the problem explained to her in a letter by Toyota. They said they'd fix it if her car died from that problem, but weirdly would not fix it before it dies which is concerning in and of itself. So anyway, she had to take it to a Toyota dealership by having it towed to them. Towing isn't cheap. If that was the problem towing would have been paid for, but it was just the secondary battery that needed to be replaced, which they charged significantly more for than anyone else would have charged and it's not like she could have taken it somewhere else. Now, if dealerships didn't exist at all? Well then I imagine that Toyota would have to reimburse her for warranty covered repaired through third party repair shops. Easier said than done given the risk of fraud, but usually the part to be replaced needs to be sent to Toyota anyway for confirmation since local dealerships are independently owned as well. If anything I expect even this would be cheaper. As a side note: The above incident happened during the recent polar vortex collapse which caused local temperatures to drop to negative 30 degrees F. Had she been stuck somewhere else when the problem happened it would have been preferable to have been able to take it to any repair shop and expect Toyota to cover the damages afterwards. Of course, if for whatever reason it just wouldn't work, OK, so we'd pay thousands less for cars, but would not be covered by warranty repairs that would likely cost less anyway. I don't see the downside there.
@@kerryedavis OK, let's give another example then. Refrigerators. They are pretty heavy and while you can buy them from a store those stores typically do not get involved in the warranty repairs. You also can't really be expected to personally ship them off to be repaired either. So what do you do? Normally this is contracted out to local repair persons. If there is a flaw in workmanship the repair costs are reimbursed. You are right of course that without a warranty they are less motivated to produce works of good quality. Even with a warranty that's a problem with companies who try to get out of it. My girlfriend recently purchased a large "portable" hybrid AC/Heater by Hisense from Walmart. Within days of the 90 day return period elapsing it developed a problem which could only be caused by a bad sensor and a bad water seal inside the unit. She filed a warranty claim since it includes documents which state a 3-year from purchase date warranty if bought from an authorized retailer and Hisense refused stating that "for that model" they have a contract to only warranty if sold at Lowes. Of course, their website indicates that Walmart is an authorized retailer and they are still selling it at Walmart. So she filed a complaint with the secretary of state office with all documentation proving date and location or purchase and warranty coverage and to date they never even responded to their inquity. They will likely jerk her around until long after the warranty expires so going forward she says she'll probably just buy one and return every 90 days just to make sure it can always be returned to the store for a refund which will ironically cost Hisense more money than just honoring their warranty. So trust me when I say that I understand the importance of having a warranty, but a car dealership isn't a prerequisite for a warranty existing. I can of course see a potential problem of car makers choosing not to honor warranties without dealerships, but if regulations can require dealerships to exist they can require warranties to be honored with stiff penalties.
I had a dealer call me back 3 months later after buying a new car from a ford dealer, they came asking me for more money because ford credit said they needed more... I said I'd call them directly because I need a bill showing that (I had a very high credit score during this transaction) Credit company said they didn't see anything like that, I called Ford directly and asked them as well. I called the dealer and said they needed to put me in touch with someone who could explain it to me why all of a sudden I'm supposed to write the dealer a check instead of the financer and why no one else can explain where this cost came from and why no one can explain whether this will show up on my finance payments or whatever. I think they just gave up at that point. I told them I don't have a problem paying if they could make me understand why I was paying it but right now it just sounds like some random person calling me and asking for money... They aren't family, they aren't my friends so I don't do that.
I had a buddy who had a 1982 Firebird (back in 1984). He went to look at a Monte Carlo SS and the salesman had him take the car home overnight. My buddy decided he preferred his Firebird and went to the dealer to return the car. As he was pulling onto the lot he saw his Firebird being loaded onto a car carrier. He demanded they take his car off the carrier and he left that dealer never to return. Had he gotten there a few minutes later his car would have been gone.
Good result. The fact the financing fell through 3 weeks late and not only screwed them out of any auto since their trade in was sold prior to repossession but left them with the loan for the now repossessed auto is BS. If the dealership was so upset, a ding to credit rating is enough, but depriving a person of auto transit in a place as auto centric as America due to something the purchaser didnt actual directly do is absurd. Hell, that loan should've been discharged immediately upon repossession.
The loan on the original car wasn't paid off. That was the loan they had to pay not the auto that was repoed. Still wrong since the dealership had sold the car.
I don't get it - how can they still expect payment from a repossessed car that was not financed? The loan didn't go through which was the foundation of the sell of the car, and now they have the car back.
@@WhiteG60 And, they can have the bank REPO the trade-in. The trade-ins new owner would also be in the pot. Soon enough somebody would get shot (hopefully the dealer).
This is why I went through my credit union. I found the car I wanted, negotiated the financing with the credit union, and they sent me a check. I walked into the dealership, handed them the check, and walked out with the keys. (skipping over the mountain of paperwork for brevity)
We just bought a used pickup this past fall. Got financing from our credit union. From the time the loan was approved, we had 30 days to find a vehicle, but we had started to look before we even applied for the loan, so that wasn’t a problem. It 🎉was so easy and trouble free, I feel bad for anyone financing through the dealer. I’m glad these folks got such a good result in the end.
Well, financing through a dealership isn't inherently bad, but you won't really know if there's going to be a problem until you have spent time there for a while. The 900ish cases that Steve mentioned is a lot, and more than I would have expected to occur. But the town I live in of about 50,000 people probably sells close to that amount of cars a month. So the times it does occur would be relatively small compared to the amount of cars sold nationwide. But I do agree that some regulations would help everyone stay above board. And, changing dealer practices to not sell cars until the financing is approved would help too.
Loan companies obviously cannot make open ended offers. But had you failed to find a suitable car within 30 days, I am fairly certain that they would have restarted the process, offering you another 30 days.
@@wilsjane that’s exactly how the process worked. But the interest rate was locked for the first 30 days, and at the time, would have gone up slightly after that.
Never use the in house financing , if you can possibly avoid it . Also , never trade your old vehicle , if possible . Sell it private party and get the true value out of it . No sense letting the dealer screw you on both ends of the process . I understand these may not be realistic options for some , but , better to have as much control as possible in any financial dealings . The more you leave to chance , the more you will get taken . The dealers in my town are straight stereotypical crooks . Not one that wouldn't brag about screwing their own parents on a deal . Just in case you believe I am exaggerating , our PD purchased a vehicle from one of these outfits , for use as a DARE vehicle . A week later the vehicle was discovered to have been stolen . It all got hushed up real quick , but , it was a a hell of a mess .
The key here is the dealership, not "financing through a dealership." The last two vehicles I've purchased were done through two different dealerships. One was a used that we negotiated for as "Factory Certified", which extended the warranty in our favor by a couple years *after* the terms of loan were complete. That one was 3%. For a used vehicle. The other one was 3.25% for a new lease, a few years after the first one. No hassles, no yo-yo, no nosebleed interest rates, no massive downpayments, no stupid sales tricks. The key here is to research the dealership you're purchasing from. If they've got some reports out there for shenanigans, move on to the next dealership.
Had that happen to me..Got the truck on a Thursday took the truck on a road trip over the weekend put over a thousand miles on the truck. I was really disappointed with the trucks performance. On Monday when I got home from work my answering machine had been blown up. I was I so happy to tell the dealer nope no thanks get my trade in ready I'm gonna come pick it up..They wanted another thousand down and I said nope no way. I was surprised they didn't see that they lost way more than a thousand in depreciation just from the 1k miles if put on it. Oh well.
A similar thing happened to my sister a decade ago. My sister refused to go back in and the car dealer repossessed the vehicle. She sued them, the case went to jury trial, and she won.
This happened to me with my first car in Canada over 10 years ago. Tldr- I bought back my dad's exact car he sold when I was born so he could afford a trailer for me and my mother. He was 19. He sold his 1972 delta 88 Oldsmobile with a 455bigblock V8. I found this exact car restored same numbers Everything at a classic reseller. Over a month went by I bought the damn car OUTRIGHT. Transferred the cash that day. Didn't matter, they still tried taking it back claiming my credit failed. There was no credit involved, they had every penny. In the end I moved took the car across the country and said file a report, I'd LOVE to be paid in court. They tried, they failed I won 1200$ ontop of keeping the car. They tried saying my credit failed, they tried saying they didn't actually have the title. They tried saying a lot of shit. Turns out, they bought the car from someone who never paid off the restoring costs to the shop that did the work. The shop had a lean or what ever you call it. The shop owned the car pretty much and the dealership was in hot water for selling a stolen car. Not. My. Problem.
I worked at a dealership for a few months and learned some nasty, nasty things. We called them "unwinds" and would call the owner and ask them to come back to have something fixed. The way it was explained to me is they would submit many contracts to a bank and just "hope" some would stick. Should be illegal.
i apologize for the long text and spelling. But i have a big issue. About 2 mnths ago i purchased a 2022 ford 150 lariat with 875miles ( currently it has 3,000) from a big known dealer here in texas. ( autonation) Anyways, i was approved through chase. Even the dealer self told me i was approved through chase . When signing contract the document specified my lender was chase auto finance. I traded in a 2020 ford f150 with 50k miles. I havent been able to make a payment on the truck because chase auto finance cannot find my loan and they keep saying i dont have a loan with them. I keep calling chase and they keep telling me the same thing. And not to mentioned i already got 3 letters saying i wasnt approved. But the dealer says i was approved by chase. Anyways chase cant find my info. The dealer already sold my trade in 2 weeks after purchasing the 2022. Im just confused why would they say chase approved my loan and put in contract and just let go of a truck for 2 mnths with out telling me anything. Im the one reaching out . Im worried im about to get fucked over. And they sold my trade in. So i want to make sure i lawyer up. Because that was their mistake. Has anyone had this happen ? Any advise? In those two mnths the dealer never reached out to me sayi wasnt approved and to return the truck And they havent done it yet. Im confuswd on whats going on never had this happen before. Thats a pretry big mistake on their part and a big problem. Why would they let me drive off the lot and had chase in the contract with chase being my lender and chase cant find my info or account. And to top it off i had to call the dealer various times to see whats going on bc i wanted to make the first payment. Its been two mnths. What can i do? If the worst happens and they ask for the truck back after its been 2mnths? What about my trade in? Please advise
The excuse that the dealerships use of oh we can't see credit or get ahold of the finance co. to get an approval, is pure unadulterated B.S. I grew up in the car business. I've been that sales manager, You can pull some ones credit 24/7/365 there are no "down hours" (I'm still in finance btw.) Also they can run the application against the underwriting guidelines to see if it will get accepted. In the case that you can't get an immediate approval, especially with the higher risk lenders they often have someone available to talk to on Saturdays and Sundays. The way this finally got resolved I would say was a proper result.
The one time a dealership tried all that on me, I just asked them to call me a taxi, and that my attorney would contact them in the morning. I drove off in a very nice Camero for the original cars price. About a 7k difference.
Spot delivery. It's evil. Tell the dealership you will come back if or when the financing goes through. Otherwise, get your own financing through your bank or credit union.
Oh the stories I could tell... I've been made to sign people up knowing they couldn't borrow $5 with a $10 deposit for the sole reason that the desk managers needed one more deal to hit a cash bonus on a particular Saturday. I finally got out of the car business the day after the guy in the office beside me was on Dateline.
in my area we refer to deals where the financing isn't approved prior to delivery as "spot deliveries". Whenever we do a spot delivery we ALWAYS see the customer's credit beforehand. Yes, the majority of the time everything works out fine but if for whatever reason the dealership can't get the loan approved they know within a day or so, NOT THREE WEEKS. There are A LOT of dealerships out there that operate like the one in this NPR story and State Attorney Generals need to go after them. I was a finance manager at several dealerships for over 20 yrs and whenever I am asked for advice about the finance side of buying a car I always recommend that buyers get their own financing arranged ahead of time. If the dealership can get you better terms then great, go for it but if they can't get you a better deal you proceed with your own financing.
This is why you get "pre-approved" with independent financing PRIOR to talking to the dealer. Dealerships are more about selling financing than vehicles anyway; so they're under incentive to get the "best" financing (for THEM). Even if the terms offered by the corporate finance company (GMAC for a Chevrolet dealership, for example) seem attractive, there will still be some language in the sales contract and financing agreement that say, to the effect, that the financing isn't complete until the loan is SOLD to another company, which, typically, it is (GMAC would be the servicing company, but you'll see that the vehicle's title is with SOMEONE ELSE, like Western States Finance, for example). Even on the "up and up", vehicle loans are sold, often several times during the lifetime of the loan (it's called "paper"), and to the borrower, it's transparent, as they simply send their payments to the servicing company. This can have its own complications when the servicing company FAILS to forward your payments, or, when the loan is paid off (usually via re-finance or trade-in), a dispute as to the payoff amount arises.
This happened to me when I bought my very first car in the 90's. All of a sudden 4 or 5 days later I get a call that the 7 or 8% interest that I had signed for jumped to like 45% interest. I looked at them like they were nuts and said I will return the car and you give me my trade. When I went in to return all of a sudden they offered 20% interest as "good news" and I told them we had a deal and either I walk out with the original deal or my old car. So I drove off with my old car and went to a dealer 15 minutes away. I got the exact same car for 250 bucks less at the same low interest the first dealer originally offered.
I don't know the details, but it seems to me that the dealer might have kept some money that was overlooked, like a down payment, a financing fee, or something. That would explain why they were happy to give the old car back, as they made a few hundred or a thousand while effectively still having the same car to sell as they started with.
I drove a new Nissan Rougue for a month before the dealer came back, said they needed me to bring in 5000 grand and sign a new deal, I refused, luckily I got my trade in back but it’s just crazy that I can drive a car for over 30 days and then bring it back because the deal had changed!
Leaves me continually greatful for the fact I've always been a member of a nice credit union thanks to my parents employment while I was growing up. Got pre-approved so they basically gave me a check that was good up to so much money that I would hand to the dealer I was basically paying cash and didn't have to mess with them trying to sell me financing
Us too I haven't bought a car with a dealership loan in almost 20 years because of this crap. The first car I bought my self back in 2000 they did this yoyo thing with and I didn't know any better so payed the higher payment because I really needed a car. I also live in Florida like the couple in the story there is a lot of fraud in Florida so I'm not shocked this happens.
This is why transactions should be separated. Get your loan at your bank or credit union. Sell your trade in at one dealership. Buy your car at another dealership. They can't pull any tricks if you treat these things as three separate transactions. No questions about how much you can afford per month (for an undefined number of years). No haggling that the trade in is worth less if you get a better price on the new car. No four square gimmicks. Just fair and straightforward business.
It would be more understandable for the dealer if they held the trade-in until the deal is final. I agree with Steve: the dealer that sold the trade-in should have to make it up to the buyers. I’m glad there was a happy ending for the family in Orlando.
I bet the trade was sitting there on the lot but they told the buyer they sold it. If they had sold it to anybody else that risked a complaint with DMV for not providing a title.
Don't trade in your old car, sell it out right and get your own financing (or pay with cash). I always work deals out the door, not one penny more, if it's not the amount we agreed on, I walk. There are plenty of places to buy cars.
Had a similar thing happen to me with Overseas Military Car Sales. But ironically, it was a zero-down, no trade-in deal and I had contacted them a week earlier because I was unhappy with the car. They refused to fix the issue so when they called me I said, "I'm not signing a damn thing, you can have the car back" and it was like the deal never happened. Except then they were stuck with a unsatisfactory vehicle and I reported them through the chain of command and the salesman was fired. In total, I bought three vehicles from them in the years I served overseas and that was the only one that went "bad".
I worked at a small used car dealer in Eastern Washington state from 1994-1996 as a “lot boy” - but I was “good with computers”, so I was tapped to pull credit checks, set up paperwork, install software, etc. - I saw exactly ONE deal pulled back because of this issue in that time - and it was because a salesman (when the owner was gone) ignored the credit report and filled everything out anyway. The owner was pretty upset come Monday…..when I threw the sale guy under that particular bus, which he very much deserved to be under.
This happened to me when I was twenty-two years old and it upset me and my family. I can't remember exactly what the reason was that I had to find another cosigner with better credit... So at first my father had co-signed for me I'm two weeks later I got the yo-yo call and had to go back in there with my brother which had perfect credit.. they tried to get more of a down payment added me I told him I wasn't going for that I think they just wanted to screw me out of the thousand dollars that I had already put down.. it was a used car at a Toyota dealership here in fort Pierce Florida.. years later I had received word that the sales manager ended up going to jail over some shady crap that he was doing at that dealership screwing people over. I heard that from a friend of mine who got a brand new car at the same dealership.. we're going to high school together..... But anyways he got a call after 2 weeks of owning a vehicle I can't remember exactly what his deal was I'm sure it was for more money
Great Stuff! There were several "red flags" in the story that let you know that the dealer was crooked. Dumping the trade and not paying it off was a big one. The main thing to learn from this is to arrange your financing before you go shopping.
My wife and I had a dealership try this on a 1 y/o used car. We brought the car back to them and dropped it off. Argued with the finance guy and the general manager for 20 min and walked out. We went to a larger dealership 45 min away and drove off in a brand new version of the same car with the same options, and they honored the original terms. They, of course, didn't tell me bringing the car back was an option, I just happened to know that.
Excellent video as always I just wish the punitive damages would have been much larger. With this tactic Being so prevalent as you stated, the amount awarded should have been at least one Million. This would definitely set an example to any and all other unscrupulous dealers.
THANK YOU! I plan on buying a used vehicle in the next few months and you really TAUGHT me so much in your video! I watch them all the time! Keep up the GREAT WORK PLEASE!
I got screwed over with Wells Fargo like this, I made them put in my finance deal that I CAN take the car out of the country. A few weeks later they said they never received my title via certified mail (Flat out lie) I resubmitted but they wanted the car back. They said the only way I could not have it repossessed was to go to a branch and re sign the paper work before close of the business day. They thought they had me because the closest one to were I got the car on the east coast was hundreds of miles away. But they didn’t know I was on leave at my dad place on the other side of the country who happens to live 400 meters from one of their branches and since I was on the west coast, it was relatively early. Next they screwed me over when they placed a block on the car to leave the country (when I was getting stationed overseas). I got close to half my deposit back from them directly and still kept my car since I refinanced with my bank. This was right before WF got their comeuppance.
Yep. I worked for the company that converted Wells Fargo to Flagstar Bank. They were stealing money from people's accounts, too. Trying to claim they got lost in transfer to Flagstar Bank. Before the transfers take place it sends a notice, no notice was sent on those. Then all of it is audited. They straight-out took the money. They were committing all sorts of crimes. Many they never got in trouble for. We literally caught them in the midst of it, but Flagstar didn't want to get in the news with the take over and get flooded by concerned customers because of Wells Fargo's unethical practices. Wells Fargo were supposed to vacate their facilities by a certain date and time. When we got there they were supposed to already be gone. It took them over five hours to leave until the point we went in and removed them. They were apparently shredding and burning tons of documents. The place was a disaster. Literally every Wells Fargo bank we converted had dangling live wires, all the outlets were busted, roofs leaked, everything was in disrepair. They spent a bunch of money updating the lobbies and teller areas, pretty much just the areas that the customers would see and the rest of the building were complete building safety, fire safety, and employee safety violations. You could tell that some people in Wells Fargo had been embezzling money for some time because NONE of their locations were up-to-date even on basic things like electric wiring, etc. So someone had to have paid off the inspectors, etc., to even pass inspection. They even tried to stop us from entering an area they had tried to secure, but we literally had to push their people out of the way and start taking their stuff and chucked it out in the dumpster.
Happened to me once on a lease, completed on a Sunday. They called on Tuesday and claimed my trade-in had been sold. (It hadn't.) I refused to negotiate and they miraculously found my trade-in later that day. 😆
I did auto loans for 5 years at a medium sized credit union....and I can tell you this happens all the time. Even with the big, franchised dealerships. That same scenario plays out over and over again. Most of it comes down to GREED on the dealership's part and many of them know exactly what they are doing. I've seen very very few do "the right thing" and eat the difference in cost. On the flip side, it's usually the consumers with horrible credit that feel they are entitled to drive $50k+ vehicles when none of their income and credit supports this. Combine the greed of the dealership, commissioned salesmen, and terrible credit across the board, this is why its so common, imho.
It's unfortunate that cars have gotten so expensive that the average person can't save up enough money to simply pay cash for it...that pretty much negates any ability of the dealership to employ a sneaky tactic like this. My wife and I are fortunate to be able to do this (good thing we prefer economy cars, lol) and it does make the car buying process a whole lot less stressful
It's not so much the cars as it is wages not keeping up with general cost of living. There are a handful of sub-$20k new cars out there now and they're so, so much better on the whole than most of the cars on sale in, say, 1990. They're especially better by most metrics than a ~$7k car from 1990. Don't get me wrong, car prices are still seeing bloat. The average sale price is probably higher adjusted for inflation than it was 20+ years ago. But the biggest issue is almost everything getting more expensive at a greater rate than what most people get paid.
Also it has alot to do with migrating to a financing based economy. Once we did that, prices of houses, cars, etc all could drift upward because people could still "afford the payments". If everyone still had to save and pay cash, prices would not have climbed so high.
Paying cash doesn't stop it. Graff in Michigan is notorious for pulling this with cars sold for cash as-is, they're currently trying to force me to return a car I bought for cash in May of last year and it's the second time they've tried with me. They leave cars on their website for up to a year and will try to claw them back if they get somebody interested for more money.
There was a car dealership in Philadelphia named Gary Barbera Jeep dodge and Chrysler. They were spotting cars and then without contacting the customer the dealership was repossessing the car on their own. The repo company was zip tie the screen doors so they couldn’t be stopped. The dealership was in huge trouble. This happened years ago and was all over the news.
As a law enforcement officer, I can tell you I have never encountered an honest used car dealer that carries the note. The list of scams they run is pretty astounding.
Used car dealerships prey on those with a thin credit rating. They will gladly sell them a car with ridiculous terms because it's all the buyer can get. If the buyer misses a payment (and chances are they will sooner or later because the terms are so bad), the lot takes the car back, the buyer is screwed and the lot resells the car to another unfortunate person and the cycle gets repeated all over again. And about that car-usually its a jalopy with a lot gone wrong or about to go wrong.
@@adotintheshark4848 I've seen dealers sell a car as many as five times before ever sending the dmv paperwork in. That means seven unreported down payments.
I suspect you have an interesting point of view on car dealerships being a law enforcement officer. I wonder if they're at least more reluctant to pull tricks on you, or if they're so brazen they just don't care what you do. I've dealt with a total of one salesperson I think was honest. Bought two cars from her and would have bought a 3rd but she'd quit the business.
I had something similar happen a long time ago in GA. The dealer called a month later and said something similar. I told them I wanted my trade in back and they said they sold it. I went to the dealer and saw the sales slip on my trade in called my bank and they said it was paid off. I said thanks a lot, threw them the keys to the car and walked back to the base. I was VERY upside down on my trade because I was stupid and became debt free in an instant. After a few calls, I went to the base JAG office with everything and the wing commander blacklisted the dealer, I was not the only one who had that issue. I got a lawyer to cover myself and the dealer backed down because my lawyer planned to bankrupt them since they were blacklisted by the military and lost about 80% of their business. It sucked that I was out $800 for the lawyer but I helped to crush a shady dealer and got my trade in paid off.
Had a dealer try this on me. Once. Insurance called me at work after 3 weeks, asking who was holding the title so they could insert the lein holder. I stopped by the dealer on my way home after work to get the info. Dealership had no-one stating they were STILL trying to find someone to buy the paper. State law says they cannot sell my trade (still parked out back) until the dealer has finalized the signed contract. I tossed them the keys, took out my spare set for the trade, walked out back and took my trade back. They got their brand new car back with 250 miles on it and a scratch down the side already... to probably sell as a used unit. Never heard from them again.
I operated a small used car dealership from 2015 until last year in Shawnee, Oklahoma. We always recommended to our customers to check with their bank of credit union for financing to save money. For credit challenged customers, we'd do a retail installment contract and attempt to assign in (frees up money so we can buy more inventory). Anytime that we could not find someone to buy the note, they had to stay on our books and make the payments to us since we signed the agreement with them. I think it is wild that what happened in this situation is even possible, let alone a common practice.
@@jupitercyclops6521 Most people aren't going to be up to selling a late model used car private party because very few buyers can come up with >$10,000 in cash and accepting any other kind of payment is fraught with risk. What we do is get our car appraised by CarMax before we go to the dealer, then if the dealer can't at least match that price we'll just sell it to CarMax.
As a retired Marine, I've noted this usually only happens to people who can't afford their own financing, I ran into it a couple times, and many Marines that worked for me experienced it.
@Robert Aitchison That sounds like a good idea if you're going to take that route.. As far as the funds go, that's another good point to an extent. I can't argue with the " most people" part, however a lot of people have credit to get a loan through a credit union or their bank. I get that it is an added hassle that many don't want to mess with. To me it's an extra hassle working it out in a trade. Try 4his experiment next time you're buying a new car Find out the value of your car like you mentioned, then tell the salesman you aren't trading in your car. Negotiate a price for new car, then tell them you changed your mind & see what they'll give you. Of course times have changed . Used cars are in demand I wouldn't be suprissed if a person would get a good deal on trade ins. To each hus/ her own. Either way, price on vehicles are crazy high compared to avg household income. Wouldn't you say? Anyways, PEACEE
I’ve had this happen to me, all three times that I bought vehicles in Minnesota: Carmax, Toyota, and Ford. I received several calls, starting about a week later, all stating that my financed terms were incorrect and that my interest rate was too low, so I needed to return to refinance. Same call, three different dealerships, over a span of six or so years. Each time, I ignored them and made the payment that my paperwork stated from the initial financing. After they cashed the first check, it seems, they stopped calling.
I had something like this happen many years ago. I returned the car to the dealer and got my old car back. It was 2 weeks after I had "bought" the car and they still had my old one. Luckily I didn't put any cash down on it.
I definitely have left of dealership once with a car and the understanding that of the financing fell through, I'd have to return it. It went through. It was no problem so I've never thought about what could have happened... Scary
This is super interesting. Some years back I moved to the US, and as I'd only been there a month or two when I went car shopping I found a car I liked, on a Saturday. I tried to get it, and unfortunately they couldn't arrange a financing agreement on the weekend for me. They took the details, etc. They did call back Monday, and I got approved for a deal, however the car had been sold in th emeantime. The dealership were up front with me, and friendly and honest. They told me they couldn't hold the car, as they didn't know how likely it was I would get the deal. However, the story in this video is a demonstration of the issues the deslership had; they can't the full checks on the weekend. Still though, from my perspective, that seems insane. Many years before my car purchainsg stories I used to sell TVs in the UK, where we did financing. I could run those through (for thousands of pounds sometimes, certainly more money than cheap cars), and we'd get the final approval immediately, and initally it was all done over the phone.
This happened to me over 30 years ago. We went to the dealership, bought a new car (actually it was sold to us, if you can understand that nuance), discussed the financing, signed everything, then drove it home. I'm making up these numbers since I don't recall exactly, but let's use sale price $12,000, cash down payment, $2,000, $10k financed at 8% over 5 years at $150/mo. That was on Saturday. On Tuesday of the next week, "the" call. No financing available at those terms. I protested loudly enough that they dropped the demand for more money, adjusted the sales price to $10k, raised the interest rate to 15%, and left the monthly payment at the same amount. I do not know if they lost money on us or not, but we got the car with the same cash outlay.
This happened to me and a girlfriend many years ago. It was a dealership that advertised "guaranteed financing" or you'd get the car free or something like that. When they yo-yo called us they said the only lender they could get to approve us wanted an extra 4 grand down. That's how these fuckers get out of their "guarantee": "Oh we got you financed, but if you don't want to pay this ridiculous fee to get approved that's on you" Scumbags.
The first car I purchased in conjunction with my wife two decades ago, it was the weekend and I told the dealer on the phone that we were interested and would be there on Monday. They said we should come in now. I said I can’t right now. So they said it might sell by then. I clearly remember my reply to that being, “Sucks to me, then, doesn’t it.” It was still there on Monday. We purchased it because my wife wanted it. I did not like the seller’s pushiness.
Yes it does. Last two cars we bought we've just paid cash. Well, one of them we financed because it's hard to turn down 0%. But we had the money to pay cash and would have if we could have gotten a better overall deal by passing on the 0% financing.
9:50 With the way the financing system works now being all computerized you can submit the loan application and get a hard answer right away, like in minutes.
Way back when I was young (late '70s, early 80s) I had this happen to me a couple of times. I bought my first car at age 19, had been working for one year, and my mother had cosigned the loan. My father passed away when I was 16, my mother inherited his car, which was basically junk, and I drove that until I decided to buy a better car. The paperwork went through, and I drove away with the car. A few days later, the dealership called and said they needed to talk to me, something about being able to "save me some money" I went down to the dealership to find out what was going on. Basically they told me that the loan did not go through, and that it would need to be refinanced for a shorter time, with higher payments. I told them I could not afford the higher payments, to basically F themselves, take the car back, and give me my old car back. But apparently they did not want the car back. Eventually everything got worked out, with the original loan terms. That was my first experience with a dealer, and it was a bad one. My guess is that most people's first (and probably all) experiences with dealers are bad. About 4 years later, the same thing happened AGAIN. I had paid off the first car, and decided to trade it in on another car. Everything went through, and I drove away in a beautiful 1975 Camaro. A couple days later, the dealer called, and again told me there was a problem with the loan. I was PISSED. I went back to the dealership with a couple of friends, threw the keys to the Camaro down on their desk, and demanded my other car back. We sat around for what seemed like forever, and finally the manager came out, apologized profusely, and told me everything was ok. I never heard from them again, paid off the car, and kept it for over 10 years. In my mid 30s I decided to buy a new car. But that time I did things differently. I went to the credit union (I'd had a government job since age 18 and had good credit) and not only secured financing from them, but even got assistance in buying the car. Basically they made the deal, all I had to do was go to the dealer, sign the title/registration paperwork, and pick up the car. I learned another lesson there. Never buy a new car. It took 5 years of high payments and insurance to pay off that car, and I went without almost everything else to do it. I kept it for 12 years, and since then I have only bought used cars from private sellers for cash. New cars are probably the worst investment you can possibly make, and if you are going to buy a used car, buying it from a dealer is the worst mistake you can make. Oh, and to me, good credit is anything over 800. My credit score is currently 837. And that is living on retirement, just a hair under $50,000 net income a year, with NO outstanding loans. No car loans, house is paid for, I do use credit cards but pay them off in full each month. I'm nearing 64, and have never been late with a payment on anything in my life.
Cars aren't an "investment", because an investment is expected to increase in value. No one _expects_ a car to increase in value, but that it should lose insignificant value as soon as you take it off the lot, and continue to do so thereafter
@@Londubh That is true of new and late model "computer cars" But not the case with 1970s and earlier "real" cars, which are steadily increasing in value. I own 2 1960s cars, one 1970s car and one 1970s truck. All bought used. And all are now worth more than what I paid for them. But that's about where it ends. Computer cars will never increase in value. Something like a 1957 Chevy or a 1965 Mustang will always continue to increase in value, and are excellent investments.
@@geraldscott4302 even those lost significant value as soon as you drove them off the lot. The fact that they _later_ became collector's items has no bearing on the fact that anything you get from a dealer isn't an investment.
@@Londubh Newer cars will never be an investment. Classic cars are an investment because they are desirable, for a lot of different reasons, style, performance, probably most of all because they have no computerized parts. They are 100% mechanical with a rudimentary electrical (not electronic) system. Some new vehicles have performance, but they certainly don't have style, and are pretty much just computers on wheels. I seriously doubt that they will ever reach a point where they start to increase in value. For one thing, besides all the computerized junk, they just aren't built well enough to last that long. There are tens of thousands of 100+ year old Model Ts out there still running like new. Pretty much all the newer crap will get scrapped in less than 20 years.
I had this happen to me a few years ago in Oklahoma. They called me a month after the fact (I had already spent about 1000 on the car in tires/ oil change/transmission flush). They tried to jack up the terms(I have great credit) so I showed back up with cash to pay the car in full. Suddenly they didn’t want me to pay in full as they wanted to make the money on the interest. It took them 5 hours to decide to let me pay cash
This happened to me. A week later I had to get my dad to co sign. They said the couldn't get the financing and the new financing would be alot more. My dad made it lower than original loan. When you have the car you want to keep it . Funny thing you can't cancel contract on your end. Get your own financing first.
A dealership in Beaverton, OR did similar to this to me. My mistakes were shopping alone, on a Friday night, walked onto the lot wearing a knee brace, no trade in, and no prior planning.
This yoyo stuff is so ridiculous. This happened to me when I was a teenager trying to buy a car. It was so damn annoying because I had a job and it was so confusing because I thought I had bought the car for like a week.
I worked for Vista Chevrolet about 20 years ago. I sold a young single mother a car. She had saved for months for a down payment. I helped her find the perfect used car. She left the dealership happy and I felt good about helping her. The lot manager came out and put a hand on my shoulder and told me they would be reposessing the car within a week or two because she didn't get approved for a loan. They knew before she left the lot and still took her money. I quit the next day.
I learned how to play their game against them at an early age. I went in and pretended like I was ignorant, poor and incapable of getting a car loan, negotiated a below market price for the car and financed the car at highway robbery level interest rate through the dealer. I then came back the next day and wrote a check to pay off the lucrative loan and they were pissed. I paid not a dime of interest which is their bread and butter.
Must not have been too long ago. 15-20yrs ago there would be penalty for paying off loans with most lenders. Nowadays it's competitive enough where loans with that kind of conditions are rare.
@@mithicash1444 I was thinking the same thing. There was a time when paying the entirety of the interest was pretty much part of the contract.
One time after GM spun off GMAC as a separate company (I forget the new name) they had a deal where if you financed with them you would get $2,000 of the price of a new car. I asked them what the minimum was I had to finance. They said $5,000. So I wrote a check for x-5000, borrowed 5000, paid 1 months interest on the loan ($160 IIRC) and then paid it off.
So basically notGMAC sold me $2,000 for $160. Id like to do that every day.
I always ask if the is a penalty for paying off a loan early. I deal with a credit union for all my purchases.
Back in 1999, I bought a used 1996 Dodge RAM from a Dodge dealer somewhere around Sacramento. A couple weeks later they tried this with me. I knew it was BS, so I said okay, just come get the truck. They refused, and insisted I sign new papers. I said no, come get the truck. This went back and forth several times over a few days and I said the same thing every time. They finally just gave up and I kept the truck with the original terms.
Yeah I would do the same thing.
You want the truck. You come and get it. You are the one who screwed up the loan.
If you'd taken the truck back and they laid the new terms on you and you refused, they'd keep the truck and your down payment.
I'm glad you never backed down, and this video, along with my friend, has taught me a valuable lesson on dealership scams, especially if you do business on a Saturday.
@@adotintheshark4848 That's what I don't get. If you don't agree to the new deal, then you haven't agreed to any deal at all. How they can just take your money and your old car without an agreement is completely baffling. That's straight up theft or fraud in any other context.
What they probably did was made a second attempt with the bank and this time they bought the contract. The other thing dealers do is become your co-signer if they want the deal bad enough. They will sign behind you without you knowing. So if you don't make the payments they take the vehicle back and lose a lot of money.
When Steve read that they were awarded $225,000, it brought a huge smile to my face.
That's nothing
Me, too. At least she was made whole.
A dealer in San Diego tried this with me when I was stationed there in 1996. It was for a brand new 1997 Jeep Wrangler and a month later they called me back to try to get me to sign “new paperwork” that had something in the 30% interest range. I laughed at them and went to base legal. Evidently, the JAG lawyers knew this dealer quite well. A few weeks later I was told to return the Jeep but beforehand, take it over to Fiesta Island and have a good time with it and that no matter what I did, it would be ok. Well you don’t tell an E-1 sailor that, we tore that thing up!!! Tore the front bumper plastic off, scratches all down the side, a small tree lodged in the skid plate, and no gas….the salesman almost fainted when he saw the Jeep as I’m pretty sure he got fired. Never heard anything about it again…
Dude! Story of the century! Congratulations!
Zap! First thing I thought of when started watching this video. Pull a Heisenberg.
This is the best short story Ive heard all month.
We had a similar situation in Fayetteville outside of Fort Bragg. Got up to our CSM and apparently he had been personally burned this way, so my soldier, me (SGT) our PSG (SFC), 1SG, CSM, and a Major I'd never met before went to the dealership. 1SG, CSM, and MAJ went into the office together, some words were said, and they came out with a new contract with very good terms.
@@Casperski1312 🤪🤪🤪🤪 People believing internet stories!!
🤪🤪🤪🤪🤪🤪🤪
This happened to me in 2019, the dealership called up a week after I signed the contract and said to come in that there was a problem with my financing, when I got there they said my interest rate was going to be 11 percent so I threw the keys on the desk and demanded my car back they ended up sticking with the original deal. I learned along time ago that you should never buy something your not willing to walk away from..
They try to make you feel like they are in charge, but if you don't pay, they don't eat. The customer is always in charge.
@@dsbennett No, if you back out of the deal they don't meet their quotas. You only lose if you aren't willing to walk away.
So if you find a mind blowing deal no one in their right mind would pass on, don't buy it?
a long time ago
not along
@@marcjtdc oh you got me, I didn't check before I posted. You must feel very good about yourself 😅😅
This sounds to me like a good reason to arrange financing with your credit union BEFORE you go look for a car.
just pay cash and bypass all the BS
@@alanm2842 Can't, you'll get pulled over before you even get there and the cops will take it.
Yup, or pay cash. I like mortgages and have a couple, but my wife and I have never had a car loan
Yes the dealers make money off financing but are often reluctant to pass any of that savings onto the buyer. So for my last car I talked the dealer down to a better price telling them I would finance through them. Then a month later I found a much better rate through a credit union and refinanced out of dealer financing.
Interest rates are almost always higher. That's what steers people to dealer financing.
This happened to me at Acura of Columbus in 2005.
Sales manager got really rude with me and told me "what I was going to do" after they told me my trade was gone.
I hung up on them after I said I was going to hire an attorney. Somebody else called me back saying "please dont do that in a super soft nice voice".
Ended up just using my own bank.
Another thing dealers will do is have a listening device at the salesperson's desk. He will say that he has to go see his boss about approval of the price. However, I noticed that I was waiting way too long. I suspected a listening device as they wanted to hear our discussion about the deal. To test it, I said " lets get out of here" Right after that the salesperson came running back. Watch what you say as they are listening.
Interesting. Thanks for the info
Do they have eavesdropping laws in your state?
I would guess that in may states, including my state of residence, NJ, that would be illegal. That being said, however, there was a dealer in my home town who not only bugged the salesmen's desks, but bugged HIS OWN BUSINESS PARTNER! When someone found the bug, he was tried and convicted on wiretapping charges, and lost not only that dealership (to his business partner), but in addition, two other dealerships that he also had a majority interest in because the auto makers granting those franchises would not have a convicted felon holding franchises for their brand of car. There are lines that he shouldn't have crossed (and it was alleged that one of those lines was a white one made of powder, on a mirror, but that was never proven).
You could use that to your advantage by "secretly" saying you won't pay over $X when they come back but could "afford" $Y if they offer that. That may make the car salesman offer $Y thinking that's your ceiling.
This is good advice *EVERYWHERE,* not just in car dealerships.
This is the kind of thing that's made me avoid dealerships. I pay cash for my cars--so I never have to worry about anything more than "Did I buy the right car?" I've been aware of some of the games dealerships play since I was a kid...and even if I decided to buy a car using financing, I'd get the financing through my credit union, not the dirty dealership.
It amazes me sometimes, how car salesmen earned themselves a truly horrible reputation, but don't seem to care about it enough to change their behavior. I suspect that, just like politicians, many/most of them are sociopaths.
Every time that I have purchased a car through a dealership, I let them arrange financing through the dealership and let them "rip me off" on interest rate but then negotiate the price of the car. They are willing to lower the price because they are getting the money back through the interest rate. Then I go to the DMV and take care of business. Then I go to my credit union and refinance the car to a lower interest rate. I pay off the dealership loan. That way they cannot come back and say that financing didn't go through. I sleep at night knowing that my relationship with them is over.
I did that with my last car purchase. I refinanced with the credit union and ended up with the same payments but a year shorter loan.
Just don't do that with a $150,000 Cadillac Escalade-V or GM will rescind your warranty 🤣
Now we know why they yo-yo.
Beware that some dealer financing will not allow you to just pay off the car without paying extra fees and added interest. It's in the contract.
I thought in the case of a sub-prime loan, they put into the contract that you have to have it financed with the financing that they provide for X period of time. That ensures that they will get enough money off of the financing to make it worth their while.
A local dealer tried this crap on my son and daughter-in law. My son asked me what he should do, and I told him NOT to give then the additional $1,200.00 the dealer was demanding, and I would handle it. I went to the dealer, asked what was the original selling price of the car, and what was the out the door cash payoff. They were surprised, but gave me a figure. I took out my checkbook, wrote out a check for that amount, and told them to give me a "paid in full' receipt. I later told my son he could make his monthly car payments to me, (with 0% financing charge). Bottom line; before shopping for a car, save up any down payment you might need, get pre-approved for an Auto Loan from your bank or credit union, and never do a "trade in", (sell your old car yourself after taking delivery of it's replacement). When the dealer starts talking "finance", give them the name and phone number of YOUR lender.
You're a good dad.
If you sell your car instead of trading it in you will get less for it AND lose the tax write-off.
@@dixietarian; in my youth I worked around a lot of car lots, and with their pricing structure, you lose money if you do a trade in. Yes, they offer you more for your car than you could usually sell it for on the open market, but that difference is more than made up for with their markup of the car they're selling you. Try this, ask for their very bottom price, but tell them you have no trade-in. Once you get them down to the very lowest out-the-door price, tell them you changed your mind, and want to trade in your old car. I guarantee you that out-the-door price will no longer be honored. Now, what is the "tax write-off" you're speaking of?
I work at a Ford dealer inspecting and repairing the trade ins. We don't touch them till the financing has gone through because a few times we have done all the needed repairs, brakes, tires etc. and the deal falls through. Customer gets his car back all fixed up.
So what is the problem
@@george2113 read this again but slowly
So it's you guys who don't look at the cars before you buy it
sounds like you work for a dealer that does things the right way.
Why would you repair a trade in before taking legal possession of it?
I was working at a Southern California Mazda/Mitsubishi dealership that was also a Yugo dealer. They sold one Yugo and the financing fell through, so the man brought it back, no problem. The dealership decided that THEY'D carry the paper (at close to 0% interest) so they wouldn't have to take back what nobody in their right mind would have bought in the first place.
I recall the old joke about the street gang who drove Yugos. They had to have push-by shootings.
@@mrlucky5025 the rear window defrosters were there to keep your hands warm while you pushed it
@@mikeoxlong1266 True, but it quits working at the first sign of frost.
@@mrlucky5025 Ah yes, man goes into the parts shop and says "I'd like a muffler for my Yugo" and the guy behind the counter says "Sounds like a fair swap".
@@jaysdood Also, filling the tank ups the resale value by %100.
I remember this happen to the first time I bought a car as an adult. Being from smaller town, went to larger dealership. When they tried the yo-yo move, I decided "nope I'm not going to play that." I told them to come pick the car up. I didn't have a trade-in that had to be dealt with, and told them I refuse to assume the liability of driving a car that I no longer owned nor was financing to own. The salesperson, and one of his co-workers had to drive to pick the car up. It was Memorial Day weekend. Found out later from a friend who knew the car, that the salesperson got stopped at a DUI checkpoint, and blew past 0.08.
😄
@@mvpfocus Not everyone provides a down payment. Especially young people buying their first car as an adult.
@@mvpfocus I've never put money down on a loan. I also have great credit
Hell! The rural dealers are ALWAYS cheaper and more honest. Smaller customer base, I walked out on a city dealer and save 2 or 3 grand buying it at a rural dealer. It alos had a LOT less mileage. Clearly it was the second car that the wife used. It was pristine too. I saw it before the detailed anything. It popped up an the website on my phone as I was sitting as the desk listening to the sales managers BS. I showed to the person I was with and we stepped away for a minute and agreed we would check it out even though it was a over an hours drive. We had allocated all afternoon anyway.
@@toriless I bought my last truck at a rural dealership a year ago. Didn't absolutely need it but did want a better tow vehicle to enjoy the last couple summers before my eldest goes off to college. I didn't get a better deal but they didn't gouge me and they treated me - and more importantly, my wife - a whole lot better. The trucks are usually my wife's DD, not mine. I only drive them for dump runs, towing duties and when we're out and about as a family. Should probably talk to her, and not down at her, if you want the sale...
I "yo-yo'd" a crappy dealership once. My mom got taken advantage of by a dealership that lied about her income to get a ridiculous loan for a ridiculous car. Thankfully, it happened on the Saturday before NYE so I was able to drive 2 hours from Indianapolis to South Bend, show the financing institution a tax return of my mom's, and get them to ask the dealership for income verification.
If it weren't for the influence of your videos, I probably wouldn't have known to do that. Your channel is a treasure!
I think I even messaged you about it on FB at the time, but just as a rant (not for help, as I know you're in Michigan and I'm in Indiana).
Most banks take it upon themselves to ask for income verification at the slightest hint that someone is inflating their income. A lot of banks just require it of everyone. That dealership likely has a cozy relationship with a shady bank that specializes in high risk lending.
You'd be surprised how many customers ask you to do this though. I never understood it, and I never would do it.
Interesting! Also from Indy. I wonder if it’s a dealer that I’ve had issues with as well.
@@Rowgue51 Both my car purchases I had to submit copies of a pay stub as proof of income before they'd even finish the loan paperwork to do the sale...actually had to arrange to do a small down payment to hold the first car I ever bought for a week or so because I was still waiting for my first "real job" pay stub and the hiring offer letter wasn't sufficient proof. Seems reasonable and only took a couple hours to process.
There was a car dealer group in the Atlanta area that was doing the 'not paying off loans of traded in cars' trick. Eventually the car finance companies cut them off and they were closed the next day.
The Toyota dealer was doing that and he wound up committing suicide.
Read up on Bill Heard dealerships. 1st "punishment" they got was to sell a few of their dealerships. In every market they were the #1 source of calls to 911. Finally taken completely down by the Feds. Probably not as common these days with things like Yelp.
The State of Georgia or the feds should have shut them down, likely years earlier.
@@TheOwlGuy777
Good. One less thief.
I've never traded in a car that I still owed money on and it never even occurred to me that someone would do that.
I mean it's obvious that people do it now that I think about it but, yeah, I guess my car buying habits are pretty frugal.
I sold cars in the early 90s. We had a couple guys that specialized in selling cars to people in “special financing” deals. Every single one would be sent home with a car. Every single one would be called back a few days later to say the financing fell through and they needed more money. Every one. Looking back it was kind if sickening.
There is a dealer in the area where I live where they advertise a new car at a very low price. When you call them about it they will say the car is still there and will be there when I come down to look at it. However, the car never existed in the first place and they only push on you a more expensive car. 10 years later I saw another car at the same dealer with the same low low price. I called and grilled the guy and got him to admit the car does not exist.
Sometimes the car exists but the price they advertise is "after special offers" and you have to qualify for literally every discount they could possibly get. So unless you're active military, who is also an active first responder, who also has an 800 credit score, who is trading in the same brand and also has a family member that works for the company (and sometimes more), you're not going to get the advertised price. But because there might be like, six people in the entire country that qualify, they can advertise for that price.
that's called bait and switch.
@@kenbrown2808 And it's illegal. Sears used to do it on auto parts for decades.
A dealer pulled this BS on my dad, they had a really sweet deal on their website, we went there and they said the car is out as a loaner but look at these other pricier cars, we asked why its advertised on the site as being available? we laughed so hard at them and left. Things like this is why I never buy new I always do private deals because regular people have less motive to rip you off.
Get the Vin # next time...
It might help!
This practice is so scandalous. This happened to my fiancee a couple of years back. Her trade-in was already paid off, and of course buy the time she was notified that they were taking the car back her trade-in was supposedly sold already and they left her completely empty handed. Downright despicable.
I had a dealership nightmare back in 2014. I paid cash for a 2006 Mercedes s600 and when I went to have it registered discovered it had a lean against the title for $8500. I contacted the dealer who told me that the dealership was in a lawsuit with the original owner who took out the loan on the car the same day they traded it in to cover the down payment on the new one. I fought with the dealer for 18 months while they kept sending me 30 day temporary tags every month and a couple $50 prepaid gas cards each time and covered the Benz with their dealers insurance until the state finally threatened to take their dealers license away prompting the dealer to offer me a full refund for the car back. Yea while it was a nightmare i basically drove that v12 Benz for almost 2 years without having to pay for insurance or gas and got every dime back I’d paid for it.
There are several things that make zero sense about that story. I'm guessing what they told you was just entirely made up, because it just can't happen the way they told you it did. Banks are not that stupid.
@@Rowgue51 what’s not to understand, I paid cash for a car from a dealer that had a lien on it, and the dealership refused to pay it off.
🤣🤣🤣🤣🤣 THOSE are the stories that I like to hear!
What a nightmare. A free 2 year lease with gas and insurance paid …oh no …so terrible.
So where are the cops rushing in to seize all the assets and property under Civil Asset Forfeiture from this dealership? Since clearly their money is from criminal activity.
What a system inflicted on us.
I bought my last car on a Saturday. The dealers are perfectly capable of running this thing called a ‘credit report’ at any time. They did not have to take my word for it.
And I can show them my credit reports....right on my phone!
@@jilbertb That too! No excuse for a dealership saying that they don’t know if our credit is good/bad. I’d chalk this up to a shady dealer. Sketchy financing, not paying off trade, etc. They deserved their $225k penalty. Despite the hassle and probable damage to their credit, I hope the customers feel they were made whole.
Many times credit is marginal. I worked at a dealership in 2000. We’d float poor credit buyers in cars all the time while the finance office tried to actually get them a deal with a lender. If you don’t send them out in a car that day, someone else will. People with bad credit will sign anything. I’m not saying that it’s right, just explaining that it did actually happen. I’d imagine the internet might make the process quicker today.
It's not just the credit report, it's finding a source for the financing. If your credit report is poor/marginal, they don't know if anyone will actually take the loan until business starts on Monday.
What this means is they shouldn't be acting like everything is good to go on Sat.
@@mrlt1151 Makes sense in 2000. I assume that’s mostly a non-issue anymore with the immediate availability of electronic credit reports. What did the dealership do if the loan could not be secured back in the day?
Something similar happened to a coworker about twenty years ago. He went into a reputable dealership to purchase a used truck. He traded in his sedan for a nice truck (signed all of the paperwork) and left the dealership. Less than a week later the dealership called and asked him to return the truck because of financing troubles. My coworker even said himself that his credit was less than stellar and he was surprised that he got financing at all. He returned the truck only to find out that his sedan had been sold. The dealership did, however, get him financed on another truck. He left satisfied.
I worked at a large car dealership that was in my family for many years. A young couple came in to purchase a new but modest vehicle. The sales manager told me to put their trade in the back because he wasn’t sure if the financing would go through. Sure enough, it didn’t. The young couple came back a couple of days later to retrieve their old car. It was a simple as that.
You know the situation is bad when the arbitrator you hand picked hammers you that hard for what you did.
Every time I've ever financed a car, the salesman has never failed to say, "congratulations, you're approved". And that's usually before we even finalize the deal. From now on, I'm going to make sure to get that in writing.
Steve didn't mention the NAME of the dealership but it's, *GREENWAY HYUNDAI ORLANDO* ..
So for all the Floridians watching this Make sure you Remember that
*Greenway Hyundai Orlando*
Uses this Sick borderline Criminal Tactic on it's unsuspecting customers !!
“Even though they sold your trade in”… Simple! Since the deal isn’t “final”, call the folks you “sold” my trade in to and tell THEM the sale isn’t final. Bring my damn old car back!
@@sparkyUSA1976 I worked as a mechanic for a dealership most of my life. I traded a truck in for another. They had me go into the office to sign off on my trade in. A couple had already bought it, signed paperwork, and were ready to take it before I even signed it as sold OR had my new replacement. Not related, but another example of dealers shoving them through the system.
20 year dealer here. Definitely abusing several good faith practices. 1. Trade should be paid off in 10 days from dealer. 2. if trade was sold, better find a way to keep them in car they bought. 3. None of this should take 3 weeks.
Dealers like that don't usually last long with social media. Just like everything , there are good dealers and some that shouldn't show there face in public. I love some of your topics, especially the auto related ones.
I was in the auto industry for 45 years. I bought, sold, repaired, and even taught school. You always arrange financing BEFORE you start looking. That way you know your financial limits and avoid buying something too expensive. Thankfully in the state I was raised in that kind of financial trickery is not permitted.
I have a positive story. I was buying my first new car, mid 1990s, and sure that I looked pretty clueless about the process. We talked about financing, the salesman said they could arrange it at the dealership. Then he told me that I should look into making the deal through a credit union. I did just that, he saved me money, and it was less for the dealership and salesman, I presume.
I will never forget his kindness.
That has nothing to do with the case Lehto is talking about here. This is about a DEALER advising the Johnsons they were approved for a loan, and then THREE weeks later telling them the financing fell through. As you can see, Lehto has a huge problem with the dealer being transparent about the financing of the sale.
I believe you're intending to give financial advise to whomever is looking to buy a car, in which case it's common sense advise
@@xr500t I didnt know you were with TH-cams comment policy department. I didn’t know someone can’t give good advice about financing on a video about car financing. Yeah two different things… not.
@@rafaeltorre1643 now you know, please obey the community guidelines.
@@xr500t But if the buyer had arranged financing BEFORE going to the dealer ship it likely wouldnt have fallen through. Hence the need for the advice.
I started watching your channel on a business trip and continued since. I really liked my Business Law class during my MBA program and this show is exactly why, fun discussions about real-world cases around tort/UFC can be very interesting when done right, which is what you do, Steve. Thank you.
Be careful...Here's a "tactic" that was pulled on me and my mother when I was young and needed a co-signer...long story short, it turned out that my credit was so bad(yay divorce's!) that even her co-signing would not get me financing, but their scam was to somehow re-submit everything without my name on the paperwork. When we went to the credit union to see about having it all put into my name to relieve my mom of her financial responsibility we found out they had never heard of me, it was all in her name!
I don't believe that your story is possible. The entire point of a cosigner is to take responsibility for payment on the debt if the initial signor doesn't follow through on their obligation. The only way a cosigner wouldn't be sufficient would be if the cosigner also didn't have a sufficient finances.
It sounds more like your mother was willing to take full financial responsibility and let you get away free and clear if things went badly.
@@finris1 well, you're wrong. It happened. WTF would I make up a story like this? It was simple, they just submitted it in my mother's name, omitted mine.
@@kileloftiswhat was on YOUR paperwork you signed from them?
the paperwork my mother and I looked over had us both signed on it. My mom was too wise to not look something like that over. Single mom, professional nurse, budgeted to the penny. I suspect they simply took my name off or rewrote it without my name & bad credit. @@bch5513
Something similar happened to me when I was young and had no credit history. They put me as the cosigner and my mom as the main signer. I didn't notice till I paid it off and the title came with my mom's name on it.
one more call like this and Im cancelling my insurance and bouncing this vehicle off of every car on your lot with it !
This is exactly what happened to me and my wife shortly before we got married trying to buy a Pontiac G6 for her. We ended up driving it for just shy of 4 weeks before they came back and said Hey we don't have financing for you. What's hilarious is we went to another dealer and got a better deal on a brand new car Literally days after this so I have no clue how they couldn't find financing for us one another place was able to do it within hours
First thing I would do is check with the Financial Institution that financed it to begin with. This is why you should always use your own financing. The simple fact that a Car Vendor can “YoYo”you should STOP you from buying a car in that state.
I had a Kia dealership try to do this to me about 20 years ago in Prescott Valley, AZ. My husband basically “explained” to them that we weren’t bringing the car back and that we would get an attorney involved if necessary. We didn’t hear any more about it after that. (Of course the car turned out to be a piece of crap, but I have a Mazda now. zoom zoom) 😊
I've had bad business dealings with that particular Kia dealer a few times over the years, but never over a car. That is to say they are scum in every respect, not just the car lot.
"explained" 😄 Love it
Excellent video. I had no idea scummy car deals like this were rampant. We’re about to buy two cars. THANK YOU! You have my sincere gratitude.
This happened to a coworker of mine about 20 years ago. Traded in his small truck on a newer full size. Dealer let him leave with the new truck then 2 days later claimed financing fell through. He decided he wanted his old truck back but they claimed it was already sent to auction and there was nothing they could do (2 days had passed).Took weeks to resolve. I eventually saw him driving his old truck again so I assume there was something they could do.
You can bet they were lying about it already being sent.
He should've told them the new truck was also sent off to auction. Too bad!
There's typically a 7-day hold as these transactions can be rolled back (by the consumer).
@@zuipraxbingo!
All the cars I've bought have been in Washington State and they have had a strict law on the books for years prohibiting it. The dealerships have the ability to start loans all day and the weekend.
Time to name and shame dealers who do this...
EXACTLY.
Kind of hard, exactly how many do not do this as a practise is vanishingly small.
Greenway Hyundai Orlando
@@audguy 👍
Dealerships shouldn't exist. They provide no value and they increase the cost of the car. They only stay in business because of outdated laws that say you can't buy directly from a manufacturer.
This was a great video. I'll never finance a car through the dealership because of it.
I absolutely refuse to allow any dealership to finance my vehicle. I've always gone to my bank, told them what vehicle I'm wanting to buy and to cut the check. Then and only then do I go to the dealership and start talking numbers. Once I get them down to the price I want and they pass me off to the finance people, that's when I pull out my checkbook. I cannot tell you how many times I've pissed them off doing this because they'll give me a really good price, knowing they're going to screw me on the finance & fees. Last time I did this, they tried to say it "doesn't work like that and you can't do it." I shrugged, said have a good day and went to the next dealer.
They tried to do this to me today. Mind you I already had financing approved through my bank. They kept trying to get me to switch financing companies. What a miserable experience. They actually tried to get me to sign a form that this was possible. And to arbitration. I refused. I hate dealers.
I think it should be a law that all contracts must have full recipricocity. If the dealership has one or more terms under which they can take the car back, the customer needs an equal number of ways to cancel the sale and get their money back. Plus penalties on either side: You want your money back, they get the car and charge a penalty. They want the car back, they have to refund plus a penalty. It should not be legal to allow contracts that force people to, say, agree to future TOS updates or lose access to past functionality, or to make people give up their right to their day in court via forced arbitration. These things are predatory, and work to allow companies and large entities to protect themselves against those who already have little recourse.
So, you don't think others should have the right to enter a contract that doesn't have "full recipricocity" in every aspect?
@@Moosetick2002 Ummm, no. We don't.
@@Moosetick2002 Contracts of adhesion should not be treated the same as fully negotiated contracts.
One easy thing on this would be to prohibit car dealers from selling the trade in until the new car deal is 100% finalized.
years ago, i went to the local dodge dealer here in torrance, the car was a ford fushion. We agreed to a price and went to the office to close the deal. I told them i was not going to finance and pay with a check, And they can hold the car until the check cleared their bank. Both myself and the dealer used the same bank. Two days after the deal was made, i got a call that the check was bad. I knew this was wrong, i called my banker and got into a conference call with the dealer and my banker. I asked the banker has my check been presented to the bank. When he said no, no check for that amount had been presented and it would have easily cleared. Then dealer hung up. Turns out that the car I was buying, was a car that they needed to sell and finance to make any profit. Basically they are very dishonest
Something like this almost happened to my girlfriend once. She wanted to buy a used prius and a dealership in the region which had what she wanted. Initially we wanted to self finance, but for some reason the dealership said they had to do it which should have been the first red flag. A week later she got the call that there was a problem with the terms and they tried to push her into signing a contract changing everything.
Afterwards we immediately went to our credit union, applied for a new car loan, and refinanced the old loan into the new one closing it out. They can't call back about financing problems if they have been fully paid off. Weirdly, the bank they chose STILL sends us letters years later. It's stupid and annoying.
For my own experience, I was once in the market for a new car as well. I had done my research into the kind of car I wanted and what price I could afford. I went to a dealership telling them what I want and that I wanted to do a test drive. They said that I had to apply for a loan through them even though I told them that I have my own bank who I'd finance through. Reluctantly I went through the motions, was approved, and then I said, "OK, I want to test drive the car now" and then they explained that the dealership is split in two and that the loan application I filed was for this other half of the dealership and that if I wanted to test drive the car I'd have to do another loan application. Keeping in mind that this was mere MOMENTS after finishing one already and that they already knew exactly what I wanted. Since repeated loan applications damage credit I told them that I won't be doing that and left.
Of course I understood that they knew multiple credit checks were bad. More likely than not, if I did the second check, it would have been declined or they'd at least say that it was. They'd then have used that to try and push me into a more expensive new car that I didn't want. Suffice to say their little scam didn't work. Of course, because they pulled my credit I had to wait a year for the credit pull to drop off my report and by then I had less of a need for one.
That was my first and only experience trying to buy a car for myself at a dealership. The transaction should be simple: They should just list a price and expect the customer to pay that price. Customers should do their own financing. Unfortunately they use the financing front as a tool to scam customers in multiple ways. The dealership experience is why I would rather walk then buy a car if buying a car means having to deal with those people. In my opinion the dealership shouldn't even exist anymore. The car makers should be selling direct to consumer. Cut out the middle man who knows nothing better than how to scam people. Of course, for that to happen, laws would have to change that prohibit car makers from selling to anyone other than a dealership.
If I ever need to buy a car I'd sooner import one from China than go to a car dealership.
@@kerryedavis That's a flawed argument, but let me give you a recent example: My girlfriend's car is a 2013 Prius which did have a warranty issue. Apparently the alternator can go back resulting in the car just not working. As a consequence when the electronics died she assumed it was the problem explained to her in a letter by Toyota. They said they'd fix it if her car died from that problem, but weirdly would not fix it before it dies which is concerning in and of itself.
So anyway, she had to take it to a Toyota dealership by having it towed to them. Towing isn't cheap. If that was the problem towing would have been paid for, but it was just the secondary battery that needed to be replaced, which they charged significantly more for than anyone else would have charged and it's not like she could have taken it somewhere else.
Now, if dealerships didn't exist at all? Well then I imagine that Toyota would have to reimburse her for warranty covered repaired through third party repair shops. Easier said than done given the risk of fraud, but usually the part to be replaced needs to be sent to Toyota anyway for confirmation since local dealerships are independently owned as well. If anything I expect even this would be cheaper.
As a side note: The above incident happened during the recent polar vortex collapse which caused local temperatures to drop to negative 30 degrees F. Had she been stuck somewhere else when the problem happened it would have been preferable to have been able to take it to any repair shop and expect Toyota to cover the damages afterwards.
Of course, if for whatever reason it just wouldn't work, OK, so we'd pay thousands less for cars, but would not be covered by warranty repairs that would likely cost less anyway. I don't see the downside there.
@@kerryedavis OK, let's give another example then. Refrigerators. They are pretty heavy and while you can buy them from a store those stores typically do not get involved in the warranty repairs. You also can't really be expected to personally ship them off to be repaired either. So what do you do? Normally this is contracted out to local repair persons. If there is a flaw in workmanship the repair costs are reimbursed.
You are right of course that without a warranty they are less motivated to produce works of good quality. Even with a warranty that's a problem with companies who try to get out of it.
My girlfriend recently purchased a large "portable" hybrid AC/Heater by Hisense from Walmart. Within days of the 90 day return period elapsing it developed a problem which could only be caused by a bad sensor and a bad water seal inside the unit. She filed a warranty claim since it includes documents which state a 3-year from purchase date warranty if bought from an authorized retailer and Hisense refused stating that "for that model" they have a contract to only warranty if sold at Lowes. Of course, their website indicates that Walmart is an authorized retailer and they are still selling it at Walmart. So she filed a complaint with the secretary of state office with all documentation proving date and location or purchase and warranty coverage and to date they never even responded to their inquity. They will likely jerk her around until long after the warranty expires so going forward she says she'll probably just buy one and return every 90 days just to make sure it can always be returned to the store for a refund which will ironically cost Hisense more money than just honoring their warranty.
So trust me when I say that I understand the importance of having a warranty, but a car dealership isn't a prerequisite for a warranty existing. I can of course see a potential problem of car makers choosing not to honor warranties without dealerships, but if regulations can require dealerships to exist they can require warranties to be honored with stiff penalties.
I had a dealer call me back 3 months later after buying a new car from a ford dealer, they came asking me for more money because ford credit said they needed more... I said I'd call them directly because I need a bill showing that (I had a very high credit score during this transaction) Credit company said they didn't see anything like that, I called Ford directly and asked them as well. I called the dealer and said they needed to put me in touch with someone who could explain it to me why all of a sudden I'm supposed to write the dealer a check instead of the financer and why no one else can explain where this cost came from and why no one can explain whether this will show up on my finance payments or whatever. I think they just gave up at that point. I told them I don't have a problem paying if they could make me understand why I was paying it but right now it just sounds like some random person calling me and asking for money... They aren't family, they aren't my friends so I don't do that.
I had a buddy who had a 1982 Firebird (back in 1984). He went to look at a Monte Carlo SS and the salesman had him take the car home overnight. My buddy decided he preferred his Firebird and went to the dealer to return the car. As he was pulling onto the lot he saw his Firebird being loaded onto a car carrier. He demanded they take his car off the carrier and he left that dealer never to return. Had he gotten there a few minutes later his car would have been gone.
i've come to the conclusion ANY time you finance a purchase you WILL BE SCREWED. that's how financing seems to work.
Good result. The fact the financing fell through 3 weeks late and not only screwed them out of any auto since their trade in was sold prior to repossession but left them with the loan for the now repossessed auto is BS. If the dealership was so upset, a ding to credit rating is enough, but depriving a person of auto transit in a place as auto centric as America due to something the purchaser didnt actual directly do is absurd. Hell, that loan should've been discharged immediately upon repossession.
The loan on the original car wasn't paid off. That was the loan they had to pay not the auto that was repoed. Still wrong since the dealership had sold the car.
I'm wondering if the presented evidence finance fell through or if they just said it did?
I don't get it - how can they still expect payment from a repossessed car that was not financed? The loan didn't go through which was the foundation of the sell of the car, and now they have the car back.
@@WhiteG60 And, they can have the bank REPO the trade-in. The trade-ins new owner would also be in the pot. Soon enough somebody would get shot (hopefully the dealer).
This is why I went through my credit union. I found the car I wanted, negotiated the financing with the credit union, and they sent me a check. I walked into the dealership, handed them the check, and walked out with the keys. (skipping over the mountain of paperwork for brevity)
We just bought a used pickup this past fall. Got financing from our credit union. From the time the loan was approved, we had 30 days to find a vehicle, but we had started to look before we even applied for the loan, so that wasn’t a problem. It 🎉was so easy and trouble free, I feel bad for anyone financing through the dealer. I’m glad these folks got such a good result in the end.
Well, financing through a dealership isn't inherently bad, but you won't really know if there's going to be a problem until you have spent time there for a while.
The 900ish cases that Steve mentioned is a lot, and more than I would have expected to occur. But the town I live in of about 50,000 people probably sells close to that amount of cars a month. So the times it does occur would be relatively small compared to the amount of cars sold nationwide.
But I do agree that some regulations would help everyone stay above board. And, changing dealer practices to not sell cars until the financing is approved would help too.
Loan companies obviously cannot make open ended offers. But had you failed to find a suitable car within 30 days, I am fairly certain that they would have restarted the process, offering you another 30 days.
@@wilsjane that’s exactly how the process worked. But the interest rate was locked for the first 30 days, and at the time, would have gone up slightly after that.
Never use the in house financing , if you can possibly avoid it .
Also , never trade your old vehicle , if possible .
Sell it private party and get the true value out of it .
No sense letting the dealer screw you on both ends of the process .
I understand these may not be realistic options for some , but , better to have as much control as possible in any financial dealings .
The more you leave to chance , the more you will get taken .
The dealers in my town are straight stereotypical crooks .
Not one that wouldn't brag about screwing their own parents on a deal .
Just in case you believe I am exaggerating , our PD purchased a vehicle from one of these outfits , for use as a DARE vehicle .
A week later the vehicle was discovered to have been stolen .
It all got hushed up real quick , but , it was a a hell of a mess .
The key here is the dealership, not "financing through a dealership." The last two vehicles I've purchased were done through two different dealerships. One was a used that we negotiated for as "Factory Certified", which extended the warranty in our favor by a couple years *after* the terms of loan were complete. That one was 3%. For a used vehicle. The other one was 3.25% for a new lease, a few years after the first one.
No hassles, no yo-yo, no nosebleed interest rates, no massive downpayments, no stupid sales tricks. The key here is to research the dealership you're purchasing from. If they've got some reports out there for shenanigans, move on to the next dealership.
Had that happen to me..Got the truck on a Thursday took the truck on a road trip over the weekend put over a thousand miles on the truck. I was really disappointed with the trucks performance. On Monday when I got home from work my answering machine had been blown up. I was I so happy to tell the dealer nope no thanks get my trade in ready I'm gonna come pick it up..They wanted another thousand down and I said nope no way. I was surprised they didn't see that they lost way more than a thousand in depreciation just from the 1k miles if put on it. Oh well.
A similar thing happened to my sister a decade ago. My sister refused to go back in and the car dealer repossessed the vehicle. She sued them, the case went to jury trial, and she won.
Usually repo and from failed payments, one of my cars was repo'd and then sent to my state. It had EVERY option. Fully loaded
@@toriless Your post makes no sense whatsoever.
This happened to me with my first car in Canada over 10 years ago.
Tldr- I bought back my dad's exact car he sold when I was born so he could afford a trailer for me and my mother. He was 19.
He sold his 1972 delta 88 Oldsmobile with a 455bigblock V8.
I found this exact car restored same numbers Everything at a classic reseller. Over a month went by I bought the damn car OUTRIGHT.
Transferred the cash that day.
Didn't matter, they still tried taking it back claiming my credit failed.
There was no credit involved, they had every penny.
In the end I moved took the car across the country and said file a report, I'd LOVE to be paid in court.
They tried, they failed I won 1200$ ontop of keeping the car.
They tried saying my credit failed, they tried saying they didn't actually have the title.
They tried saying a lot of shit.
Turns out, they bought the car from someone who never paid off the restoring costs to the shop that did the work.
The shop had a lean or what ever you call it.
The shop owned the car pretty much and the dealership was in hot water for selling a stolen car.
Not. My. Problem.
I worked at a dealership for a few months and learned some nasty, nasty things. We called them "unwinds" and would call the owner and ask them to come back to have something fixed. The way it was explained to me is they would submit many contracts to a bank and just "hope" some would stick. Should be illegal.
i apologize for the long text and spelling. But i have a big issue. About 2 mnths ago i purchased a 2022 ford 150 lariat with 875miles ( currently it has 3,000) from a big known dealer here in texas. ( autonation)
Anyways, i was approved through chase. Even the dealer self told me i was approved through chase . When signing contract the document specified my lender was chase auto finance. I traded in a 2020 ford f150 with 50k miles. I havent been able to make a payment on the truck because chase auto finance cannot find my loan and they keep saying i dont have a loan with them. I keep calling chase and they keep telling me the same thing. And not to mentioned i already got 3 letters saying i wasnt approved. But the dealer says i was approved by chase. Anyways chase cant find my info. The dealer already sold my trade in 2 weeks after purchasing the 2022. Im just confused why would they say chase approved my loan and put in contract and just let go of a truck for 2 mnths with out telling me anything. Im the one reaching out . Im worried im about to get fucked over. And they sold my trade in. So i want to make sure i lawyer up. Because that was their mistake. Has anyone had this happen ? Any advise? In those two mnths the dealer never reached out to me sayi wasnt approved and to return the truck And they havent done it yet. Im confuswd on whats going on never had this happen before. Thats a pretry big mistake on their part and a big problem. Why would they let me drive off the lot and had chase in the contract with chase being my lender and chase cant find my info or account. And to top it off i had to call the dealer various times to see whats going on bc i wanted to make the first payment. Its been two mnths.
What can i do? If the worst happens and they ask for the truck back after its been 2mnths? What about my trade in?
Please advise
The excuse that the dealerships use of oh we can't see credit or get ahold of the finance co. to get an approval, is pure unadulterated B.S. I grew up in the car business. I've been that sales manager, You can pull some ones credit 24/7/365 there are no "down hours" (I'm still in finance btw.) Also they can run the application against the underwriting guidelines to see if it will get accepted. In the case that you can't get an immediate approval, especially with the higher risk lenders they often have someone available to talk to on Saturdays and Sundays. The way this finally got resolved I would say was a proper result.
The one time a dealership tried all that on me, I just asked them to call me a taxi, and that my attorney would contact them in the morning.
I drove off in a very nice Camero for the original cars price. About a 7k difference.
Spot delivery. It's evil. Tell the dealership you will come back if or when the financing goes through. Otherwise, get your own financing through your bank or credit union.
Oh the stories I could tell... I've been made to sign people up knowing they couldn't borrow $5 with a $10 deposit for the sole reason that the desk managers needed one more deal to hit a cash bonus on a particular Saturday. I finally got out of the car business the day after the guy in the office beside me was on Dateline.
This is why I only pay cash for cars, the newest cars I've ever bought were eight years old but you lose a lot more on newer cars anyway.
in my area we refer to deals where the financing isn't approved prior to delivery as "spot deliveries". Whenever we do a spot delivery we ALWAYS see the customer's credit beforehand. Yes, the majority of the time everything works out fine but if for whatever reason the dealership can't get the loan approved they know within a day or so, NOT THREE WEEKS. There are A LOT of dealerships out there that operate like the one in this NPR story and State Attorney Generals need to go after them. I was a finance manager at several dealerships for over 20 yrs and whenever I am asked for advice about the finance side of buying a car I always recommend that buyers get their own financing arranged ahead of time. If the dealership can get you better terms then great, go for it but if they can't get you a better deal you proceed with your own financing.
This is why you get "pre-approved" with independent financing PRIOR to talking to the dealer. Dealerships are more about selling financing than vehicles anyway; so they're under incentive to get the "best" financing (for THEM). Even if the terms offered by the corporate finance company (GMAC for a Chevrolet dealership, for example) seem attractive, there will still be some language in the sales contract and financing agreement that say, to the effect, that the financing isn't complete until the loan is SOLD to another company, which, typically, it is (GMAC would be the servicing company, but you'll see that the vehicle's title is with SOMEONE ELSE, like Western States Finance, for example). Even on the "up and up", vehicle loans are sold, often several times during the lifetime of the loan (it's called "paper"), and to the borrower, it's transparent, as they simply send their payments to the servicing company. This can have its own complications when the servicing company FAILS to forward your payments, or, when the loan is paid off (usually via re-finance or trade-in), a dispute as to the payoff amount arises.
This happened to me when I bought my very first car in the 90's. All of a sudden 4 or 5 days later I get a call that the 7 or 8% interest that I had signed for jumped to like 45% interest. I looked at them like they were nuts and said I will return the car and you give me my trade. When I went in to return all of a sudden they offered 20% interest as "good news" and I told them we had a deal and either I walk out with the original deal or my old car. So I drove off with my old car and went to a dealer 15 minutes away. I got the exact same car for 250 bucks less at the same low interest the first dealer originally offered.
Wow thats shady. They knew you were likely to fall for that, since it was your first car.
I don't know the details, but it seems to me that the dealer might have kept some money that was overlooked, like a down payment, a financing fee, or something.
That would explain why they were happy to give the old car back, as they made a few hundred or a thousand while effectively still having the same car to sell as they started with.
I drove a new Nissan Rougue for a month before the dealer came back, said they needed me to bring in 5000 grand and sign a new deal, I refused, luckily I got my trade in back but it’s just crazy that I can drive a car for over 30 days and then bring it back because the deal had changed!
Leaves me continually greatful for the fact I've always been a member of a nice credit union thanks to my parents employment while I was growing up. Got pre-approved so they basically gave me a check that was good up to so much money that I would hand to the dealer I was basically paying cash and didn't have to mess with them trying to sell me financing
Us too I haven't bought a car with a dealership loan in almost 20 years because of this crap. The first car I bought my self back in 2000 they did this yoyo thing with and I didn't know any better so payed the higher payment because I really needed a car. I also live in Florida like the couple in the story there is a lot of fraud in Florida so I'm not shocked this happens.
This is why transactions should be separated. Get your loan at your bank or credit union. Sell your trade in at one dealership. Buy your car at another dealership. They can't pull any tricks if you treat these things as three separate transactions. No questions about how much you can afford per month (for an undefined number of years). No haggling that the trade in is worth less if you get a better price on the new car. No four square gimmicks. Just fair and straightforward business.
It would be more understandable for the dealer if they held the trade-in until the deal is final. I agree with Steve: the dealer that sold the trade-in should have to make it up to the buyers.
I’m glad there was a happy ending for the family in Orlando.
I bet the trade was sitting there on the lot but they told the buyer they sold it. If they had sold it to anybody else that risked a complaint with DMV for not providing a title.
I’m a big fan of happy endings. 😊
Don't trade in your old car, sell it out right and get your own financing (or pay with cash). I always work deals out the door, not one penny more, if it's not the amount we agreed on, I walk. There are plenty of places to buy cars.
Had a similar thing happen to me with Overseas Military Car Sales. But ironically, it was a zero-down, no trade-in deal and I had contacted them a week earlier because I was unhappy with the car. They refused to fix the issue so when they called me I said, "I'm not signing a damn thing, you can have the car back" and it was like the deal never happened. Except then they were stuck with a unsatisfactory vehicle and I reported them through the chain of command and the salesman was fired. In total, I bought three vehicles from them in the years I served overseas and that was the only one that went "bad".
I worked at a small used car dealer in Eastern Washington state from 1994-1996 as a “lot boy” - but I was “good with computers”, so I was tapped to pull credit checks, set up paperwork, install software, etc. - I saw exactly ONE deal pulled back because of this issue in that time - and it was because a salesman (when the owner was gone) ignored the credit report and filled everything out anyway. The owner was pretty upset come Monday…..when I threw the sale guy under that particular bus, which he very much deserved to be under.
This happened to me when I was twenty-two years old and it upset me and my family. I can't remember exactly what the reason was that I had to find another cosigner with better credit... So at first my father had co-signed for me I'm two weeks later I got the yo-yo call and had to go back in there with my brother which had perfect credit.. they tried to get more of a down payment added me I told him I wasn't going for that I think they just wanted to screw me out of the thousand dollars that I had already put down.. it was a used car at a Toyota dealership here in fort Pierce Florida.. years later I had received word that the sales manager ended up going to jail over some shady crap that he was doing at that dealership screwing people over. I heard that from a friend of mine who got a brand new car at the same dealership.. we're going to high school together..... But anyways he got a call after 2 weeks of owning a vehicle I can't remember exactly what his deal was I'm sure it was for more money
Its weird this a problem in Florida.
Greedy republicans have really screwed Floridans
I bet the car dealership would try to get the arbitration overturned.... The family deserved every penny...
Great Stuff! There were several "red flags" in the story that let you know that the dealer was crooked. Dumping the trade and not paying it off was a big one. The main thing to learn from this is to arrange your financing before you go shopping.
My wife and I had a dealership try this on a 1 y/o used car. We brought the car back to them and dropped it off. Argued with the finance guy and the general manager for 20 min and walked out. We went to a larger dealership 45 min away and drove off in a brand new version of the same car with the same options, and they honored the original terms. They, of course, didn't tell me bringing the car back was an option, I just happened to know that.
Excellent video as always
I just wish the punitive damages would have been much larger. With this tactic Being so prevalent as you stated, the amount awarded should have been at least one Million.
This would definitely set an example to any and all other unscrupulous dealers.
THANK YOU! I plan on buying a used vehicle in the next few months and you really TAUGHT me so much in your video! I watch them all the time! Keep up the GREAT WORK PLEASE!
I got screwed over with Wells Fargo like this, I made them put in my finance deal that I CAN take the car out of the country. A few weeks later they said they never received my title via certified mail (Flat out lie) I resubmitted but they wanted the car back. They said the only way I could not have it repossessed was to go to a branch and re sign the paper work before close of the business day. They thought they had me because the closest one to were I got the car on the east coast was hundreds of miles away. But they didn’t know I was on leave at my dad place on the other side of the country who happens to live 400 meters from one of their branches and since I was on the west coast, it was relatively early. Next they screwed me over when they placed a block on the car to leave the country (when I was getting stationed overseas). I got close to half my deposit back from them directly and still kept my car since I refinanced with my bank. This was right before WF got their comeuppance.
Yep. I worked for the company that converted Wells Fargo to Flagstar Bank. They were stealing money from people's accounts, too. Trying to claim they got lost in transfer to Flagstar Bank. Before the transfers take place it sends a notice, no notice was sent on those. Then all of it is audited. They straight-out took the money. They were committing all sorts of crimes. Many they never got in trouble for. We literally caught them in the midst of it, but Flagstar didn't want to get in the news with the take over and get flooded by concerned customers because of Wells Fargo's unethical practices. Wells Fargo were supposed to vacate their facilities by a certain date and time. When we got there they were supposed to already be gone. It took them over five hours to leave until the point we went in and removed them. They were apparently shredding and burning tons of documents. The place was a disaster. Literally every Wells Fargo bank we converted had dangling live wires, all the outlets were busted, roofs leaked, everything was in disrepair. They spent a bunch of money updating the lobbies and teller areas, pretty much just the areas that the customers would see and the rest of the building were complete building safety, fire safety, and employee safety violations. You could tell that some people in Wells Fargo had been embezzling money for some time because NONE of their locations were up-to-date even on basic things like electric wiring, etc. So someone had to have paid off the inspectors, etc., to even pass inspection. They even tried to stop us from entering an area they had tried to secure, but we literally had to push their people out of the way and start taking their stuff and chucked it out in the dumpster.
NEVER FINANCE AT THE DEALERSHIP! Arrange for it beforehand at a bank or even better, a credit union.
Happened to me once on a lease, completed on a Sunday. They called on Tuesday and claimed my trade-in had been sold. (It hadn't.) I refused to negotiate and they miraculously found my trade-in later that day. 😆
I did auto loans for 5 years at a medium sized credit union....and I can tell you this happens all the time. Even with the big, franchised dealerships. That same scenario plays out over and over again. Most of it comes down to GREED on the dealership's part and many of them know exactly what they are doing. I've seen very very few do "the right thing" and eat the difference in cost. On the flip side, it's usually the consumers with horrible credit that feel they are entitled to drive $50k+ vehicles when none of their income and credit supports this. Combine the greed of the dealership, commissioned salesmen, and terrible credit across the board, this is why its so common, imho.
It's unfortunate that cars have gotten so expensive that the average person can't save up enough money to simply pay cash for it...that pretty much negates any ability of the dealership to employ a sneaky tactic like this. My wife and I are fortunate to be able to do this (good thing we prefer economy cars, lol) and it does make the car buying process a whole lot less stressful
It's not so much the cars as it is wages not keeping up with general cost of living. There are a handful of sub-$20k new cars out there now and they're so, so much better on the whole than most of the cars on sale in, say, 1990. They're especially better by most metrics than a ~$7k car from 1990.
Don't get me wrong, car prices are still seeing bloat. The average sale price is probably higher adjusted for inflation than it was 20+ years ago. But the biggest issue is almost everything getting more expensive at a greater rate than what most people get paid.
Also it has alot to do with migrating to a financing based economy. Once we did that, prices of houses, cars, etc all could drift upward because people could still "afford the payments".
If everyone still had to save and pay cash, prices would not have climbed so high.
Buy newer used with a warranty and pay cash .
Paying cash doesn't stop it. Graff in Michigan is notorious for pulling this with cars sold for cash as-is, they're currently trying to force me to return a car I bought for cash in May of last year and it's the second time they've tried with me. They leave cars on their website for up to a year and will try to claw them back if they get somebody interested for more money.
@@Hevach say they can have it for a higher price. Make it like twice what you paid.
There was a car dealership in Philadelphia named Gary Barbera Jeep dodge and Chrysler. They were spotting cars and then without contacting the customer the dealership was repossessing the car on their own. The repo company was zip tie the screen doors so they couldn’t be stopped. The dealership was in huge trouble. This happened years ago and was all over the news.
there still there
@@bobb9922 they still are there, Barbera owns it and is the face of it but he can’t run any of it
As a law enforcement officer, I can tell you I have never encountered an honest used car dealer that carries the note. The list of scams they run is pretty astounding.
Used car dealerships prey on those with a thin credit rating. They will gladly sell them a car with ridiculous terms because it's all the buyer can get. If the buyer misses a payment (and chances are they will sooner or later because the terms are so bad), the lot takes the car back, the buyer is screwed and the lot resells the car to another unfortunate person and the cycle gets repeated all over again. And about that car-usually its a jalopy with a lot gone wrong or about to go wrong.
@@adotintheshark4848 I've seen dealers sell a car as many as five times before ever sending the dmv paperwork in. That means seven unreported down payments.
I suspect you have an interesting point of view on car dealerships being a law enforcement officer. I wonder if they're at least more reluctant to pull tricks on you, or if they're so brazen they just don't care what you do. I've dealt with a total of one salesperson I think was honest. Bought two cars from her and would have bought a 3rd but she'd quit the business.
I had something similar happen a long time ago in GA. The dealer called a month later and said something similar. I told them I wanted my trade in back and they said they sold it. I went to the dealer and saw the sales slip on my trade in called my bank and they said it was paid off. I said thanks a lot, threw them the keys to the car and walked back to the base. I was VERY upside down on my trade because I was stupid and became debt free in an instant.
After a few calls, I went to the base JAG office with everything and the wing commander blacklisted the dealer, I was not the only one who had that issue. I got a lawyer to cover myself and the dealer backed down because my lawyer planned to bankrupt them since they were blacklisted by the military and lost about 80% of their business. It sucked that I was out $800 for the lawyer but I helped to crush a shady dealer and got my trade in paid off.
Had a dealer try this on me. Once. Insurance called me at work after 3 weeks, asking who was holding the title so they could insert the lein holder. I stopped by the dealer on my way home after work to get the info. Dealership had no-one stating they were STILL trying to find someone to buy the paper. State law says they cannot sell my trade (still parked out back) until the dealer has finalized the signed contract. I tossed them the keys, took out my spare set for the trade, walked out back and took my trade back. They got their brand new car back with 250 miles on it and a scratch down the side already... to probably sell as a used unit. Never heard from them again.
I operated a small used car dealership from 2015 until last year in Shawnee, Oklahoma. We always recommended to our customers to check with their bank of credit union for financing to save money. For credit challenged customers, we'd do a retail installment contract and attempt to assign in (frees up money so we can buy more inventory). Anytime that we could not find someone to buy the note, they had to stay on our books and make the payments to us since we signed the agreement with them. I think it is wild that what happened in this situation is even possible, let alone a common practice.
Just one more reason NOT to finance you car at the stealership.
And not to trade in your old car
@@jupitercyclops6521 Most people aren't going to be up to selling a late model used car private party because very few buyers can come up with >$10,000 in cash and accepting any other kind of payment is fraught with risk.
What we do is get our car appraised by CarMax before we go to the dealer, then if the dealer can't at least match that price we'll just sell it to CarMax.
As a retired Marine, I've noted this usually only happens to people who can't afford their own financing, I ran into it a couple times, and many Marines that worked for me experienced it.
@Robert Aitchison
That sounds like a good idea if you're going to take that route..
As far as the funds go, that's another good point to an extent.
I can't argue with the " most people" part, however a lot of people have credit to get a loan through a credit union or their bank.
I get that it is an added hassle that many don't want to mess with.
To me it's an extra hassle working it out in a trade.
Try 4his experiment next time you're buying a new car
Find out the value of your car like you mentioned, then tell the salesman you aren't trading in your car.
Negotiate a price for new car, then tell them you changed your mind & see what they'll give you.
Of course times have changed .
Used cars are in demand I wouldn't be suprissed if a person would get a good deal on trade ins.
To each hus/ her own.
Either way, price on vehicles are crazy high compared to avg household income.
Wouldn't you say?
Anyways,
PEACEE
I’ve had this happen to me, all three times that I bought vehicles in Minnesota: Carmax, Toyota, and Ford. I received several calls, starting about a week later, all stating that my financed terms were incorrect and that my interest rate was too low, so I needed to return to refinance.
Same call, three different dealerships, over a span of six or so years. Each time, I ignored them and made the payment that my paperwork stated from the initial financing. After they cashed the first check, it seems, they stopped calling.
I had something like this happen many years ago. I returned the car to the dealer and got my old car back. It was 2 weeks after I had "bought" the car and they still had my old one. Luckily I didn't put any cash down on it.
I definitely have left of dealership once with a car and the understanding that of the financing fell through, I'd have to return it. It went through. It was no problem so I've never thought about what could have happened... Scary
This is super interesting. Some years back I moved to the US, and as I'd only been there a month or two when I went car shopping I found a car I liked, on a Saturday. I tried to get it, and unfortunately they couldn't arrange a financing agreement on the weekend for me. They took the details, etc. They did call back Monday, and I got approved for a deal, however the car had been sold in th emeantime. The dealership were up front with me, and friendly and honest. They told me they couldn't hold the car, as they didn't know how likely it was I would get the deal.
However, the story in this video is a demonstration of the issues the deslership had; they can't the full checks on the weekend. Still though, from my perspective, that seems insane. Many years before my car purchainsg stories I used to sell TVs in the UK, where we did financing. I could run those through (for thousands of pounds sometimes, certainly more money than cheap cars), and we'd get the final approval immediately, and initally it was all done over the phone.
This happened to me over 30 years ago. We went to the dealership, bought a new car (actually it was sold to us, if you can understand that nuance), discussed the financing, signed everything, then drove it home. I'm making up these numbers since I don't recall exactly, but let's use sale price $12,000, cash down payment, $2,000, $10k financed at 8% over 5 years at $150/mo. That was on Saturday. On Tuesday of the next week, "the" call. No financing available at those terms. I protested loudly enough that they dropped the demand for more money, adjusted the sales price to $10k, raised the interest rate to 15%, and left the monthly payment at the same amount. I do not know if they lost money on us or not, but we got the car with the same cash outlay.
This happened to me and a girlfriend many years ago. It was a dealership that advertised "guaranteed financing" or you'd get the car free or something like that. When they yo-yo called us they said the only lender they could get to approve us wanted an extra 4 grand down. That's how these fuckers get out of their "guarantee": "Oh we got you financed, but if you don't want to pay this ridiculous fee to get approved that's on you"
Scumbags.
The first car I purchased in conjunction with my wife two decades ago, it was the weekend and I told the dealer on the phone that we were interested and would be there on Monday. They said we should come in now. I said I can’t right now. So they said it might sell by then.
I clearly remember my reply to that being, “Sucks to me, then, doesn’t it.” It was still there on Monday. We purchased it because my wife wanted it.
I did not like the seller’s pushiness.
This is why I hate borrowing money. Being debt-free feels soooooo good.
Yes it does. Last two cars we bought we've just paid cash. Well, one of them we financed because it's hard to turn down 0%. But we had the money to pay cash and would have if we could have gotten a better overall deal by passing on the 0% financing.
9:50 With the way the financing system works now being all computerized you can submit the loan application and get a hard answer right away, like in minutes.
Way back when I was young (late '70s, early 80s) I had this happen to me a couple of times. I bought my first car at age 19, had been working for one year, and my mother had cosigned the loan. My father passed away when I was 16, my mother inherited his car, which was basically junk, and I drove that until I decided to buy a better car. The paperwork went through, and I drove away with the car. A few days later, the dealership called and said they needed to talk to me, something about being able to "save me some money" I went down to the dealership to find out what was going on. Basically they told me that the loan did not go through, and that it would need to be refinanced for a shorter time, with higher payments. I told them I could not afford the higher payments, to basically F themselves, take the car back, and give me my old car back. But apparently they did not want the car back. Eventually everything got worked out, with the original loan terms. That was my first experience with a dealer, and it was a bad one. My guess is that most people's first (and probably all) experiences with dealers are bad.
About 4 years later, the same thing happened AGAIN. I had paid off the first car, and decided to trade it in on another car. Everything went through, and I drove away in a beautiful 1975 Camaro. A couple days later, the dealer called, and again told me there was a problem with the loan. I was PISSED. I went back to the dealership with a couple of friends, threw the keys to the Camaro down on their desk, and demanded my other car back. We sat around for what seemed like forever, and finally the manager came out, apologized profusely, and told me everything was ok. I never heard from them again, paid off the car, and kept it for over 10 years.
In my mid 30s I decided to buy a new car. But that time I did things differently. I went to the credit union (I'd had a government job since age 18 and had good credit) and not only secured financing from them, but even got assistance in buying the car. Basically they made the deal, all I had to do was go to the dealer, sign the title/registration paperwork, and pick up the car. I learned another lesson there. Never buy a new car. It took 5 years of high payments and insurance to pay off that car, and I went without almost everything else to do it. I kept it for 12 years, and since then I have only bought used cars from private sellers for cash.
New cars are probably the worst investment you can possibly make, and if you are going to buy a used car, buying it from a dealer is the worst mistake you can make. Oh, and to me, good credit is anything over 800. My credit score is currently 837. And that is living on retirement, just a hair under $50,000 net income a year, with NO outstanding loans. No car loans, house is paid for, I do use credit cards but pay them off in full each month. I'm nearing 64, and have never been late with a payment on anything in my life.
Cars aren't an "investment", because an investment is expected to increase in value. No one _expects_ a car to increase in value, but that it should lose insignificant value as soon as you take it off the lot, and continue to do so thereafter
@@Londubh That is true of new and late model "computer cars" But not the case with 1970s and earlier "real" cars, which are steadily increasing in value. I own 2 1960s cars, one 1970s car and one 1970s truck. All bought used. And all are now worth more than what I paid for them. But that's about where it ends. Computer cars will never increase in value. Something like a 1957 Chevy or a 1965 Mustang will always continue to increase in value, and are excellent investments.
@@geraldscott4302 even those lost significant value as soon as you drove them off the lot. The fact that they _later_ became collector's items has no bearing on the fact that anything you get from a dealer isn't an investment.
@@Londubh Newer cars will never be an investment. Classic cars are an investment because they are desirable, for a lot of different reasons, style, performance, probably most of all because they have no computerized parts. They are 100% mechanical with a rudimentary electrical (not electronic) system. Some new vehicles have performance, but they certainly don't have style, and are pretty much just computers on wheels. I seriously doubt that they will ever reach a point where they start to increase in value. For one thing, besides all the computerized junk, they just aren't built well enough to last that long. There are tens of thousands of 100+ year old Model Ts out there still running like new. Pretty much all the newer crap will get scrapped in less than 20 years.
Boomer easy life
I had this happen to me a few years ago in Oklahoma. They called me a month after the fact (I had already spent about 1000 on the car in tires/ oil change/transmission flush). They tried to jack up the terms(I have great credit) so I showed back up with cash to pay the car in full. Suddenly they didn’t want me to pay in full as they wanted to make the money on the interest. It took them 5 hours to decide to let me pay cash
This happened to me. A week later I had to get my dad to co sign. They said the couldn't get the financing and the new financing would be alot more. My dad made it lower than original loan. When you have the car you want to keep it . Funny thing you can't cancel contract on your end. Get your own financing first.
A dealership in Beaverton, OR did similar to this to me. My mistakes were shopping alone, on a Friday night, walked onto the lot wearing a knee brace, no trade in, and no prior planning.
This yoyo stuff is so ridiculous. This happened to me when I was a teenager trying to buy a car. It was so damn annoying because I had a job and it was so confusing because I thought I had bought the car for like a week.