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A word to the wise. I ran across a new dealer financing scam yesterday. Kia is offering a special incentive, 2.9% interest rate for 60 months. Since this was a better rate then I could get from my bank, I didn't even bother to apply at my local bank and didn't bring a copy of the Kia incentive offer with me. Well when I get to the dealership, they are trying to charge me 4.4% for 72 month financing. When I told I wanted the Kia incentive special, they play stupid and claim not to know what I'm talking about. My credit score is 800+, so I'm sure I qualify. They then show me the rates, 1.9% for 24 month, 2.9% for 36 months and 3.9% for 60 months and claim I must be mistaken. Since I didn't bring a copy of the Kia's offer, I stupidly believe them.
Well they were running financing through this company called First Niagara located in New York, NOT Kia Financial which is who is offering the rate incentive. In the future, make sure they are giving you the rates for who you think they are. It was really my fault for assuming they would just use Kia Financing by default.
The dealer makes extra money on that other financing through some deal they've setup with First Niagara bank. I think it's pretty common these days for dealers to push their own financing deals that they get a cut of.
Did you walk or did you go through with everything and find out later? It is pretty brazen to flat out pretend the other financing doesn't exist and suggest you are mistaken.
You could contact Kia directly and let them know what is happening, though I don't know to what degree they get involved with such things. Probably slap on the wrist if anything.
I wouldn't call it a "scam" at all - there's nothing nefarious about it - any good sized dealer will have finance plans from at least 4 or 5 lenders, and often far more. It's not uncommon for dealers to get more $$$ from a non affiliated lender who's trying to boost a portfolio w/some new business. FWIW, GMAC/Ally is notorious for supporting low rates by cutting the dealer margin... so dealers try to make $$ by using other financing.
Don't forget - all of this (even factory financing) is negotiable (even if doing so makes the F&I person's head explode).
If you've already done the deal, jump on the dealer NOW - this can be unwound if caught soon enough. Best of luck.
In all honesty you should have simply walked away until you could confirm the current incentive offers. Heck, they probably had computers at the dealer to look it up, or it could have been done on a smart phone. With that said, most incentive programs are regional, not national so it may have been the case that the rate you saw was not available at the dealer you were at. If you are very confident that it was, then I would contact Kia corporate and let them know that the dealer would not offer the correct Kia Financial financing even when requested. The dealer is ultimately under no obligation to use Kia Financing, but the dealer may get a nasty gram. If this just happened, then there may be time to unwind the deal, but that is all dependent on the contract and laws in your area.
This is why I had my financing set up BEFORE I went into the dealer. When I bought my Jeep, I went in with a check from my credit union. The dealer beat their financing, so I didn't use it. My rate now is 2.4% for 60/mo.
A car manufacturer may offer special financing program but not all dealership may participate in it.
Dealerships work with other financial instution for car finance as well and they do make money doing it. It's not really a scam that they didn't offer you what the rate you though you could get. If you would have played hardball, you could have tried to demand the rate or walk. The whole new car buying thing is very tricky unless you do it on a regular basis and if you think about it, who does?
In the future, remember car buying is a process of negotiation and everything is negotiable until both sides come to a compromise. If things aren't going the way you like, you can always walk out the door. The best deal you can get is the one that you didn't get by walking out and they don't call you back or sometime later.
Just an FYI.. They make you sit and wait all that time even after you agree to buy is a game that they play. You don't get to the Financial part until you are worn down to the point where you just want to get out of there. Until you sign off there, you can still walk.
Just an FYI.. They make you sit and wait all that time even after you agree to buy is a game that they play. You don't get to the Financial part until you are worn down to the point where you just want to get out of there. Until you sign off there, you can still walk.
Next time I have to purchase a car, I'm going to take all the paperwork home with me before signing so I can review it for 24 hours. Has anyone ever done this?
Next time I have to purchase a car, I'm going to take all the paperwork home with me before signing so I can review it for 24 hours. Has anyone ever done this?
Well, one typically does this (review) for even the smallest business/commercial transaction, so it shouldn't be a problem. What I always do (personal use auto) is ask for the entire paperwork bundle, paper, & pen - and sometimes a calculator, (As an aside - I had one F&I guy grab his calculator and tell me "the numbers were perfect". I laughed as I walked out the door) and take the time to go thru each & every entry. By the time I'm done they're ready to sign anything...
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