auto loan APR buydown? (insurance, vehicle, credit, best)
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Hello. I recently purchased a used vehicle from a dealership out of my county. I was offered a lower interest rate than what my credit union already had approved. Now I am being told that the dealerships finance officer can not find me a lender at the rate they offered me, and wants to disscuss a "Buy down" with my credit union. Says that it would be better for me to deal with a lender in my "area" (county).
Researching the definition of "Buydown," I discovered that to use this tool for an auto loan is NOT in my best interest. The schematics are different for auto financing, than for a buydown on a mortgage, and is in the interest of the SELLER. Also, buydowns can be undisclosed. The unsuspecting buyer does not realize the offered interest rate and/or purchase price was due to one or more buydown tactics. Looking at the whole purchase process I experienced, I can pick out at least two possible buydown tactics used. Now I feel like I am being manipulated again, into another Buydown just to satisfy the Dealerships obligation to meet the offered interest rate.
Question(s): How do I turn this manipulation around? What are my rights, since I already have the vehicle in my possession, and putting miles on it? Can the dealership force me to accept a Buydown? Can I refuse, and force the dealership to take the car back and return my trade-in and $ down? (I had a trade-in vehicle, and put $ down on the purchase to lower the amount to be financed, and I added GAP and an extended warranty to the equation).
Help!
Did you already sign on the car at the lower rate from the dealership? This is a somewhat common tactic among dealerships - if you signed a contract for financing, it takes both parties to change its terms - I'd tell them I'm sticking to the contract and that they are out of luck. What are the terms - do they mention buy down discretion? Did the dealership give you the car without approved financing?
If I were you and the terms you have are similar, and you still are approved through your credit union, go get the loan from the credit union for the price of the car minus what you've paid so far. Don't deal with the dealership any more and threaten to sue for misleading business practices. You've already settled on the car, and paid at least some money on it, so get a check from the cu and cut your ties with the dealer - there are no fees to pay since the financing wth the dealer "never went through".
Hello Sayantsi,
I already signed a "Retail Installment Sale Contract-Simple Finance Charge" form with the Dealership. What do you mean by "mention buy down discretion?" The first time I ever heard the phrase was when the dealership finance officer mentioned it during a phone conversation. I have since read the fine print and there is no mention of the phrase "buy down." Now, it does state, "Changes may take the form of a larger or smaller final payment or, at our option, more or fewer payments of the same amount as your scheduled payment with a smaller final payment." I am not sure if this statement reflects a buy down tactic.
Approved financing? I guess it was not approved because they haven't found a lender yet?? Or was the "approval," the aforementioned contract that states the Federal Truth-in-Lending Disclosure, and breakdown of the amount financed?
I also noticed this contract allows for the SELLER to back out of the agreement, IF they choose. If after 10 days they cannot find a lender. But it says nothing about the Buyer's right to backout, because the Dealer can't meet its offer. I guess it is "assumed?"
Bummer for me -- the credit union's loan approval is for a NEW vehicle/ interest rate, and this purchase is a USED vehicle, (which I did mention this to the dealership). The interest rate would be higher on the used vehicle. I could afford the higher interest rate if I dropped the GAP $795. and Service $2000. insurances. To keep within my budget when adding these two ins.s the interest rate was increased and 60 mo. to a 66 mo. term. Now I am wondering if I drop them both, if I could renegotiate the original interest rate/60 mo. offer. Can only try, right? But if they can't find a lender, I guess it really doesn't matter.
I appreciate your input. Thank You,
Shiba
Well, I renegotiated with the WONDERFUL Loan Agent at my Credit Union and she got me 5.5% for 60 months, with $1000. down and $1000. trade-in. I have successfully joined the proud owners of Subaru vehicles. Thank you everyone for your guidance.
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Buy down discretion?
