Honda Car Forum

Anyone catch the 60 Minutes piece on Dealer Financing? The Finance
guy can add 1 - 3 percentage points (or more) to your loan and get a
check (dealer reserve) from the finance company for the extra profit.
3% could be a couple thousand dollars extra on a $20,000 car financed
for 60 months. I assume this is mostly done with people who don't
qualify for factory financing. Or maybe don't know they qualify for
factory financing. People with mediocre credit might qualify for
14.9% financing but be written up for 17.9%. One ex-employee said
they would bump people as much as they could. One lady got taken for
$7,000.

The finance guy would tell the customer he was getting the "best
possible" financing. The dealer they interviewed smiled a lot and
said customers know that everything is negotiable (again and again).
If they didn't get a better deal somewhere else then that was the
"best possible" deal there were going to get there. Not telling the
customer about the additional charge seemed quite ethical to him.

This has nothing to do with Honda dealers specifically, but you have
to be careful everywhere.

Do The Math Yourself,
Roadie Roger

I saw this 60 Minutes piece.

As much as I loathe car dealers, I thought the guy speaking for car dealers had
a point: People are free to arrange their own car financing. He has no
obligation to do the research for consumers. He's trying to make a living.

His comment that "the best deal" available was the "deal on which all parties
agreed" was slippery. Yet, only if people do not read and take their budgets
seriously would they go into a car dealership thinking the car dealer was trying
to give them a break.

As far as targeting minorities: This comes up with home loans, too. I don't
think it's entirely clear that minorities are paying higher rates because of
their skin color or because they simply do have lower credit worthiness, based
on income, past credit history, etc.

The "60 Minutes" piece didn't carry as much weight as I think its producers
hoped it would. At most, it was a "Consumer Reports" worthy report. Which is
saying a lot, actually. Just no legal scandal, IMO.

"Roadie Roger" <roadierogerbugsplat@earthlink.net> wrote
> Anyone catch the 60 Minutes piece on Dealer Financing? The Finance
> guy can add 1 - 3 percentage points (or more) to your loan and get a
> check (dealer reserve) from the finance company for the extra profit.
> 3% could be a couple thousand dollars extra on a $20,000 car financed
> for 60 months. I assume this is mostly done with people who don't
> qualify for factory financing. Or maybe don't know they qualify for
> factory financing. People with mediocre credit might qualify for
> 14.9% financing but be written up for 17.9%. One ex-employee said
> they would bump people as much as they could. One lady got taken for
> $7,000.
>
> The finance guy would tell the customer he was getting the "best
> possible" financing. The dealer they interviewed smiled a lot and
> said customers know that everything is negotiable (again and again).
> If they didn't get a better deal somewhere else then that was the
> "best possible" deal there were going to get there. Not telling the
> customer about the additional charge seemed quite ethical to him.
>
> This has nothing to do with Honda dealers specifically, but you have
> to be careful everywhere.

Honda dealer tried to charge me 10% interest on a car loan. I told them that I
should get a better rate. They bs me with bad credit score. I told them I was pre
approved for a car loan with much better rate from a bank. They then changed their
tune and offered me a better rate then the bank. The finance guy bs me for 2 hours.
I didn't tell him that I used to work in loan industry.

The finance guy from Mazda tried to con me. During negotiation, he agreed to the
rate I asked. He went to get approval from his boss. He came back with a payment,
not rate. I confronted him that the payments were much higher than the rate we
agreed. He walked away and came back with the right payments.

Car loans are very dirty. Two of my co-worker recently get bad deals. They don't
care after my friend confronted them with the bad deals they got. Those victims
won't know that that they got raped if my friend didn't tell them. The fed seems to
do little about car loans.

I used to work in a wholesales home mortgage company. We underwrote home loans. We
were the lender. The minority get hit hard with points from the brokers. The
processing department turned away loan application that had too much points.
Basically, we returned applications that clearly raped the applicants.

In the underwriting department, the minority get excessive special treatments. It
was grossly reverse prejudice there, really sickening to me. If you were a minority
and your loan application denied, the application had to go through 2 more
underwriting to try to approve the loan. If you were white, you only got 1 chance.

Here are the pieces about mortgage that you should know.

1. Points are percents of your loan. 1 point = 1% of you loan.

2. Brokers charge you points or application fee for your application. They send your
loan application to lenders. They get to choose whom your lender be. In a sense,
they'll give you their best deal, not your best deal.

3. You pay for all fees.

4. Brokers will pay your fees if and only if they get special deals from the lender.
Those loans where you don't pay any fee will end up costing you more in interest.
Brokers get a fat commission from those deals.

5. The higher the interest rate on your loan, the higher the points the lender give
the brokers.

6. Brokers get points from you and your lender. Don't be fooled when they say they
do you a favor.

7. Your credit score qualify you for a certain rate. There used to be 2 tiers. The
really high score qualify for the lowest rate. The rest get the lower rate. Few
people qualify for top tier rate.

8. Direct loan application to a lender get you decent rate, better than average
brokers. The best rate is from a dedicated broker, hard to come by.

9. The best deal you get is what your broker offer you, not the lender. Your chance
of getting a best deal is slim.




Caroline wrote:

> As far as targeting minorities: This comes up with home loans, too. I don't
> think it's entirely clear that minorities are paying higher rates because of
> their skin color or because they simply do have lower credit worthiness, based
> on income, past credit history, etc.

It works both ways.... I have perfect credit and when purchasing a vehicle
from Chevy, I told them I didn't want their GMAC financing as my bank had a
better rate than 4.4% they were offering (i lied)... The sales guy went
and hung out with the sales manager so I opened my book. (Always take
reading material). He came back in about 5-10 mins and asked if I would go
with GMAC if they matched the made up number I came up with of 3.5% for 60
months. I reluctantly agreed.. HAHAHAHA and signed immediately!

So when Chevy was offering the $3500 rebates or $1000 rebate and the
financing of 3.5%... I got both! $3500 and 3.5% But you have to be a
stone faced liar... which I can do, no problem. I know its all a game, and
this time the consumer won!

But, yes, you have to know what the numbers should look like before you walk
into a dealership.

Keith



"Sean Dinh" <seannydinh@znet.com> wrote in message
news:40733A8A.37851BDC@znet.com...
> Honda dealer tried to charge me 10% interest on a car loan. I told them
that I
> should get a better rate. They bs me with bad credit score. I told them I
was pre
> approved for a car loan with much better rate from a bank. They then
changed their
> tune and offered me a better rate then the bank. The finance guy bs me for
2 hours.
> I didn't tell him that I used to work in loan industry.
>
> The finance guy from Mazda tried to con me. During negotiation, he agreed
to the
> rate I asked. He went to get approval from his boss. He came back with a
payment,
> not rate. I confronted him that the payments were much higher than the
rate we
> agreed. He walked away and came back with the right payments.
>
> Car loans are very dirty. Two of my co-worker recently get bad deals. They
don't
> care after my friend confronted them with the bad deals they got. Those
victims
> won't know that that they got raped if my friend didn't tell them. The fed
seems to
> do little about car loans.
>
> I used to work in a wholesales home mortgage company. We underwrote home
loans. We
> were the lender. The minority get hit hard with points from the brokers.
The
> processing department turned away loan application that had too much
points.
> Basically, we returned applications that clearly raped the applicants.
>
> In the underwriting department, the minority get excessive special
treatments. It
> was grossly reverse prejudice there, really sickening to me. If you were a
minority
> and your loan application denied, the application had to go through 2 more
> underwriting to try to approve the loan. If you were white, you only got 1
chance.
>
> Here are the pieces about mortgage that you should know.
>
> 1. Points are percents of your loan. 1 point = 1% of you loan.
>
> 2. Brokers charge you points or application fee for your application. They
send your
> loan application to lenders. They get to choose whom your lender be. In a
sense,
> they'll give you their best deal, not your best deal.
>
> 3. You pay for all fees.
>
> 4. Brokers will pay your fees if and only if they get special deals from
the lender.
> Those loans where you don't pay any fee will end up costing you more in
interest.
> Brokers get a fat commission from those deals.
>
> 5. The higher the interest rate on your loan, the higher the points the
lender give
> the brokers.
>
> 6. Brokers get points from you and your lender. Don't be fooled when they
say they
> do you a favor.
>
> 7. Your credit score qualify you for a certain rate. There used to be 2
tiers. The
> really high score qualify for the lowest rate. The rest get the lower
rate. Few
> people qualify for top tier rate.
>
> 8. Direct loan application to a lender get you decent rate, better than
average
> brokers. The best rate is from a dedicated broker, hard to come by.
>
> 9. The best deal you get is what your broker offer you, not the lender.
Your chance
> of getting a best deal is slim.
>
>
>
>
> Caroline wrote:
>
> > As far as targeting minorities: This comes up with home loans, too. I
don't
> > think it's entirely clear that minorities are paying higher rates
because of
> > their skin color or because they simply do have lower credit worthiness,
based
> > on income, past credit history, etc.
>

In article <3fc2f65c.0404060959.6093f14f@posting.google.com >,
roadierogerbugsplat@earthlink.net (Roadie Roger) wrote:

> Anyone catch the 60 Minutes piece on Dealer Financing? The Finance
> guy can add 1 - 3 percentage points (or more) to your loan and get a
> check (dealer reserve) from the finance company for the extra profit.

This isn't news. That 60 Minutes thinks it is, is why I stopped
watching 60 Minutes about 20 years ago.

Anyway, take my advice to heart: buy the car from one guy in one
transaction, and buy the money from someone else in a completely
separate and unrelated transaction.

In other words, don't use the car salesman or dealership to arrange the
financing. Arrange it yourself.

That's not so hard, is it? I've been telling people this for many, many
years.

Keith J wrote:

> It works both ways.... I have perfect credit and when purchasing a vehicle
> from Chevy, I told them I didn't want their GMAC financing as my bank had a
> better rate than 4.4% they were offering (i lied)... The sales guy went
> and hung out with the sales manager so I opened my book. (Always take
> reading material).

A very good tactic. When I bought my Accord EX last summer, I talked
with the salesman for at least 1 1/2 hours after my test ride (which
lasted 45 minutes, BTW - it's his time!). I had numbers from the 'Net,
which they wouldn't even approach, so I thanked him for the test ride &
his time and left, saying I needed to check other dealers). Walking away
from the deal is a very powerful negotiating tool.

I got a call from him the next afternoon telling me his good friend the
sales manager had authorized him to meet the 'Net figures, which he did,
so I bought the car.

> He came back in about 5-10 mins and asked if I would go
> with GMAC if they matched the made up number I came up with of 3.5% for 60
> months. I reluctantly agreed.. HAHAHAHA and signed immediately!
>
> So when Chevy was offering the $3500 rebates or $1000 rebate and the
> financing of 3.5%... I got both! $3500 and 3.5% But you have to be a
> stone faced liar...

Fighting fire with fire - kudos to you for negotiating at their level.

Elmo P. Shagnasty wrote:

> In article <3fc2f65c.0404060959.6093f14f@posting.google.com >,
> roadierogerbugsplat@earthlink.net (Roadie Roger) wrote:
>
>
>>Anyone catch the 60 Minutes piece on Dealer Financing? The Finance
>>guy can add 1 - 3 percentage points (or more) to your loan and get a
>>check (dealer reserve) from the finance company for the extra profit.
>
>
> This isn't news. That 60 Minutes thinks it is, is why I stopped
> watching 60 Minutes about 20 years ago.
>
> Anyway, take my advice to heart: buy the car from one guy in one
> transaction, and buy the money from someone else in a completely
> separate and unrelated transaction.
>
> In other words, don't use the car salesman or dealership to arrange the
> financing. Arrange it yourself.

Doesn't it depend on who's offering the best deal?

roadierogerbugsplat@earthlink.net (Roadie*Roger) wrote:

>This has nothing to do with Honda
>dealers specifically, but you have to be
>careful everywhere.

In my search for a Hyndai for my in-laws in Vegas, (I'm in L.A.) Metro
Hyundai told me there would be $l,800. in fees, not including the sales
tax! When I asked him to itemize these "fees", the first one was window
etching for $375. I had to ask him twice if it was required by law. It
isn't. The cops are doing it for free there. The second charge was for
'transportation' from the auction. The salesman had already admitted it
was a car bought at that dealer and then traded in for the newer style
Sonata.

Needless to say, I moved on from that transaction and found a nice car
for thousands less than what that dealer was willing to do.

>I guess it
>Do The Math Yourself,

That's why every car deal I do is with money I've secured away from the
dealer.
A lease? Never!

"Gus" <GusPod@optOFFline.XXXX.net> wrote in message
news:ZeOcc.3303$Po2.975922@news4.srv.hcvlny.cv.net ...
> Keith J wrote:
>
> > It works both ways.... I have perfect credit and when purchasing a
vehicle
> > from Chevy, I told them I didn't want their GMAC financing as my bank
had a
> > better rate than 4.4% they were offering (i lied)... The sales guy
went
> > and hung out with the sales manager so I opened my book. (Always take
> > reading material).
>
> A very good tactic. When I bought my Accord EX last summer, I talked
> with the salesman for at least 1 1/2 hours after my test ride (which
> lasted 45 minutes, BTW - it's his time!). I had numbers from the 'Net,
> which they wouldn't even approach, so I thanked him for the test ride &
> his time and left, saying I needed to check other dealers). Walking away
> from the deal is a very powerful negotiating tool.
>
> I got a call from him the next afternoon telling me his good friend the
> sales manager had authorized him to meet the 'Net figures, which he did,
> so I bought the car.
>
> > He came back in about 5-10 mins and asked if I would go
> > with GMAC if they matched the made up number I came up with of 3.5% for
60
> > months. I reluctantly agreed.. HAHAHAHA and signed immediately!
> >
> > So when Chevy was offering the $3500 rebates or $1000 rebate and the
> > financing of 3.5%... I got both! $3500 and 3.5% But you have to be a
> > stone faced liar...
>
> Fighting fire with fire - kudos to you for negotiating at their level.
>

I suggest bringing a PDA with a loan calculator program on it when dealing
with the finance department. When I bought my civic with Honda financing,
1.9% promotion, the payment looked high, I calculated the numbers and the
monthly payment was about 20 dollars high. I asked the finance guy what the
discrepency was and he said "Oh, that's insurance in case something happens
when you die so your family wont have to pay for it." I said "No thanks!"
What a little sneak! I was bitter, this guy tried to stick me with omething
without my knowledge!

> 14.9% financing but be written up for 17.9%. One ex-employee said
> they would bump people as much as they could. One lady got taken for
> $7,000.

so? dont finance at the dealer. get pre-approved at a real bank.