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Nickdawgy Visits Another Car Dealer... But This Time, His Brother-In-Law Is Buying

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Nickdawgy Visits Another Car Dealer... But This Time, His Brother-In-Law Is Buying

Old 10-14-13, 06:23 PM
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Nickdawgy Visits Another Car Dealer... But This Time, His Brother-In-Law Is Buying

So in the spirit of the old 20% threads of the past, I bring you another thread about a car. This time it's my brother-in-law. Yes, the same BIL from the old threads. Before anyone starts asking why is he buying a new car when he doesn't work and lives with you, let me explain he just got a nice retroactive check from the Army and is now getting disability for the rest of his life, enough to live on comfortably, which means his own place.

So we all win.

Anyhow, here's what happened at the dealer:

We went down to the Hyundai (we previously checked Toyota, Ford, Nissan, and Kia) dealer and he found a car he liked, which was a 2013 Sonata Hybrid. A nice looking car. I believe the sticker price was $31k for fully loaded.

Anyhow, here's my questions. His credit isn't that great, I think that he was getting 18% (Not quite my 20% but still frightening) and the payment was $619 (I told him it was too high but he said he could afford it easily) a month. He put $10k down, and they claimed he got an additional $2k in rebates.

So naturally the car comes with this BS paint protection and some other protectant/sealant that added up to an extra $1k. Then they wanted to add the extended warranty. They claimed his rate was originally 22% but they lowered it to 18% (so nice of them, lol) if he got the warranty. I told them it smelled fishy, and he wanted the warranty off. They said they would just raise the rate again to 22%. So I took him aside and said we will just cancel it later, and get the refund.

They didn't try to add GAP insurance because he put $12k down (the down payment plus the rebate) which was surprising because when I bought my Honda a few years ago, they added it regardless (I later removed it, along with the warranty).

So he signs the paperwork, and all is fine.

The next day they call him back and say he needs to come back down to re-sign the papers. I immediately thought it was the spot delivery scam (the Honda dealer tried this with my first Honda) and they would try and raise his rate. But they said they are lowering his monthly payments. I started to think they bumped him up another 12 months.

We both get there, and the finance manager tells us they lowered his payment to $504 a month. The length of the loan was still the same, and no extra down payment was needed. His new APR showed 11.5%.

After looking at the paperwork, I noticed they added some sort of lo-jack type security device that shows as $1000. The paper that he had to re-sign showed like $432 a month without the extras (warranty, security device) and $504 with them.

My question is, did they screw him over, or do him a favor? Can they raise his rate to 22% if he cancels the warranty and the security thing? I know 11.5% is still high, but it's better than 18% (or 20-22%). The payments are high as well, but he plans on paying off the car in a couple of years.

So sleazeball dealer or an actual nice one?
Old 10-14-13, 06:37 PM
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Re: Nickdawgy Visits Another Car Dealer... But This Time, His Brother-In-Law Is Buyin

Too bad he didn't get his financing through a bank or military credit union. You should never give the power to control interest or payments to the dealer I too was looking at a Hyundai recently (the Ellantra). Hyundai had 0.0% interest for 60 months but would not budge on the price of $19,900 (not if I wanted the 0%). I went through the credit union and got 2.5% and talked the car down to $16,000. Even though the interest was higher my payments would have been lower as was the ultimate price. I didn't end up getting the car yet however.
Old 10-14-13, 06:40 PM
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Re: Nickdawgy Visits Another Car Dealer... But This Time, His Brother-In-Law Is Buyin

He probably wouldn't have qualified for a loan at the credit union. I saw the paper the dealer gave him and it said TU has him at 504, and Experian at 562.

I'm definitely going through the credit union when I try for my next car but hopefully that won't happen for at least a year or more.
Old 10-14-13, 06:59 PM
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Re: Nickdawgy Visits Another Car Dealer... But This Time, His Brother-In-Law Is Buyin

Whoever the bank was probably would only approve the loan if the lojack was installed. We have that happen here (Ford) sometimes with credit challenged people.

If he cancels the warranty and lojack then his rate may go up because of the bank indicating that these were conditions to the loan.

How many months did he sign for? 60 or 72?
Old 10-14-13, 07:04 PM
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Re: Nickdawgy Visits Another Car Dealer... But This Time, His Brother-In-Law Is Buyin

If the car war 31 with a 2k rebate and he put 12k. Then he should be financing around 20k I'm thinking. His payments should be closer to 400 for 60 or 340-370 for 72. A 500 credit score is tough, but 12k down makes a huge difference.
Old 10-14-13, 09:51 PM
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Re: Nickdawgy Visits Another Car Dealer... But This Time, His Brother-In-Law Is Buyin

Re-read the papers. If he has to keep the LoJack thing to keep the low interest rate, that should be stated somewhere in the contract.

Look it over carefully. Most states let you return a car and cancel the deal for a couple of days.
Old 10-15-13, 12:49 AM
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Re: Nickdawgy Visits Another Car Dealer... But This Time His Brother-In-Law Is Buying

Originally Posted by DarthVong View Post
If the car war 31 with a 2k rebate and he put 12k. Then he should be financing around 20k I'm thinking. His payments should be closer to 400 for 60 or 340-370 for 72. A 500 credit score is tough, but 12k down makes a huge difference.
I think it was closer to 32k after the stupid paint protection add on BS. I think his financing is 22ish. The tax was like 3k since LA county has a higher tax rate.

Originally Posted by Nick Danger View Post
Re-read the papers. If he has to keep the LoJack thing to keep the low interest rate, that should be stated somewhere in the contract.

Look it over carefully. Most states let you return a car and cancel the deal for a couple of days.
I'm almost positive that California doesn't let you return the car. I'm also pretty sure the contract doesn't state anything about the interest rate being raised if the extras are canceled. I think they added those on to make more money up front since they lowered the interest rate. I'm no expert on credit but a 11.5% isn't normal for a 500 score I'm assuming.

I mean it's a nicer car than my Honda, and bigger, plus he's paying about 40 less than I was paying. But he put down more than I did, and his rate is nearly half of what mine was. It seems like his payments should be even lower.

Oh and he's at 72 months.

Last edited by nickdawgy; 10-15-13 at 12:58 AM.
Old 10-15-13, 12:58 AM
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Re: Nickdawgy Visits Another Car Dealer... But This Time, His Brother-In-Law Is Buyin

I just looked it up, it was $32.6k for the car, then $2.8k for the warranty, $1k for the lo-jack thing, $2.6k in tax, and then the misc fees (document, electronic filing, registration, etc) were $500.

Financing was $26k and change.

There was $3k in rebates, not $2k, I was wrong. So $13k down. No GAP insurance.
Old 10-15-13, 01:42 AM
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Re: Nickdawgy Visits Another Car Dealer... But This Time, His Brother-In-Law Is Buyin

Originally Posted by nickdawgy View Post
He probably wouldn't have qualified for a loan at the credit union. I saw the paper the dealer gave him and it said TU has him at 504, and Experian at 562.

I'm definitely going through the credit union when I try for my next car but hopefully that won't happen for at least a year or more.
But you still want to know the best rate you can get going in or if you truly can't get financed outside of the dealership. It takes away the guessing game of what you could get, and removes their chance to add extra charges. You don't want the dealer to have that power.
Old 10-15-13, 01:54 AM
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Re: Nickdawgy Visits Another Car Dealer... But This Time, His Brother-In-Law Is Buyin

I'm thinking his one mistake was not threatening to get up and leave when the dealer threatened to raise his rate to 22% if he didn't get the warranty.

I mean the monthly payment showed at least an $80 difference without the warranty and lo-jack. Who knows, maybe since his credit was bad they would have said goodbye.

He originally tried for the model with the panoramic sunroof which was $1k more but they told him he wouldn't qualify for financing for it. Yet they add $4k in extras to the financing amount.

Even if he cancels the extras, it would just fall off the end of the loan, correct? No reduction in monthly payments?
Old 10-15-13, 09:44 AM
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Re: Nickdawgy Visits Another Car Dealer... But This Time, His Brother-In-Law Is Buyin

I hesitate to say this, but buying new when you have terrible credit seems like a terrible idea. Then again smart decisions don't seem to be big with your in-laws.

I actually feel like buying new is ALWAYS a big waste of money, but at least I can possibly see the argument if you're getting 0% financing or something.

I get it - we had Chapter 7 some years ago (wife stopped working to care for babies, loads of medical bills, house underwater, etc). Still, we have a longstanding relationship with out credit union and haven't had problems getting a car loan provided we cleared up non-medical collections on our credit.

I think I'm paying 12% on my car (2 yr old loaded Altima 2.5SL with ~38k). $18,500 out the door, tax, title, everything included. They had to drive 100 miles to drop it off to me though (I shop around HARD when I buy). When I was 18 I got a dealer loan on a used car (no credit to speak of) and it was atrocious. And if I didn't want it loaded/leather/etc I could probably have gotten one at $14k.

I really wanted a Hyundai Sonata Hybrid, knowing I was going to be commuting soon enough (I'm driving about 550 miles a week now) but I wasn't willing to pay the extra $10k-15k or so, plus interest which would make it far more than that. It was bad enough spending $18k, I wanted the 4-cylinder for mpg but couldn't get that with electronic stability control until the 2010 Altima. I should really have gotten a Camry or an Accord, but the Camry was too boring for me and I wasn't a huge fan of the Accord either. It was hard enough coming from a supercharged v6 to a 4-banger again.

Dealers are full of all sorts of crazy shenanigans. I get it with inlaws though. My wife's mom went out to get a new (used) car and bought the first car they offered her for about $2k-$3k over blue book retail. She didn't even try to negotiate. Didn't call anyone for any advice first either. And they got her to buy a warranty which we convinced her to try to return and save ~$2k ...but they talked her out of it by giving her some useless freebie like free oil changes or something (I don't remember how they talked her out of it).

Last edited by GreenMonkey; 10-15-13 at 09:50 AM.
Old 10-15-13, 10:00 AM
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Re: Nickdawgy Visits Another Car Dealer... But This Time, His Brother-In-Law Is Buyin

Originally Posted by nickdawgy View Post
Even if he cancels the extras, it would just fall off the end of the loan, correct? No reduction in monthly payments?
Correct.

Yeah they hosed him on those extras. If he would have tried to secure a loan outside the dealership he would have been better off. There's no magical wand we use to get you approved. I'm sure if he went to a credit union he could have gotten either a better rate or the same rate without all the extra bullshit.
Old 10-15-13, 10:06 AM
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Re: Nickdawgy Visits Another Car Dealer... But This Time, His Brother-In-Law Is Buyin

Originally Posted by GreenMonkey View Post
I hesitate to say this, but buying new when you have terrible credit seems like a terrible idea. Then again smart decisions don't seem to be big with your in-laws. .
Actually it's the best idea for people with bad credit. You have a better chance of getting approved at a lower rate than you would for a preowned.

Banks are looking at it as getting their money back if you default on the loan. It's more difficult with preowned because of that and book value of the preowned. Book value is the amount a lender will approve on a particular preowned car.

The absolute BEST way to get approved and improve your credit is a short term lease. Ford Credit will approve almost anyone in a lease with little to no money down and within 24 months you'll increase your credit score to be able to finance after at the 0% rate.
Old 10-15-13, 10:40 AM
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Re: Nickdawgy Visits Another Car Dealer... But This Time, His Brother-In-Law Is Buyin

Originally Posted by GreenMonkey View Post
I hesitate to say this, but buying new when you have terrible credit seems like a terrible idea.

Uh, this. He shouldn't be financing anything over $5K. I predict the car will back at the dealership within a year. You don't need to finance a $31K car to get good credit again. You'll just get robbed by the bank who finances you, and laughed at by the dealership.

His Debt To Credit Ratio on a $31K car will keep him in the low 500's much longer than if he were to finance a $5K car over say, 36 months.
Old 10-15-13, 10:41 AM
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Re: Nickdawgy Visits Another Car Dealer... But This Time, His Brother-In-Law Is Buyin

I think he should've bought something a wee bit cheaper.
Old 10-15-13, 10:44 AM
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Re: Nickdawgy Visits Another Car Dealer... But This Time, His Brother-In-Law Is Buyin

$2800 for the extended warranty is flat out theft on the part of the dealer. If you really wanted you could get it at least half, but what's the point? Doesn't Hyundai already offer a 5 year warranty on new cars? I think the battery system is warrantied for 10 years and the battery itself for life.

Last edited by Kdogg; 10-15-13 at 11:00 AM.
Old 10-15-13, 11:13 AM
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Re: Nickdawgy Visits Another Car Dealer... But This Time, His Brother-In-Law Is Buyin

Originally Posted by Kdogg View Post
$2800 for the extended warranty is flat out theft on the part of the dealer. If you really wanted you could get it at least half, but what's the point? Doesn't Hyundai already offer a 5 year warranty on new cars? I think the battery system is warrantied for 10 years and the battery itself for life.
I can only speak for Ford but a 7 year 125000 mile ESP runs around 1400.00. Also the Hybrid battery has a 10 year 100000 mile warranty.
Old 10-15-13, 11:15 AM
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Re: Nickdawgy Visits Another Car Dealer... But This Time, His Brother-In-Law Is Buyin

Originally Posted by DVD Polizei View Post
Uh, this. He shouldn't be financing anything over $5K. I predict the car will back at the dealership within a year. You don't need to finance a $31K car to get good credit again. You'll just get robbed by the bank who finances you, and laughed at by the dealership.

His Debt To Credit Ratio on a $31K car will keep him in the low 500's much longer than if he were to finance a $5K car over say, 36 months.
True he's going to have to take that loan to term otherwise he's going to be very upside down if he tries to trade out of it.

But the other problem with a $5k car is he would've been at 24% with a secondary lender with payment of around $230.00 with around 2300 in interest. For a car with little to no warranty at or around 100000 miles on it (average)

Last edited by DarthVong; 10-15-13 at 11:21 AM.
Old 10-15-13, 11:29 AM
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Re: Nickdawgy Visits Another Car Dealer... But This Time, His Brother-In-Law Is Buyin

Originally Posted by EddieMoney View Post
I think he should've bought something a wee bit cheaper.
fiscally irresponsible people will continue to be fiscally irresponsible.
Old 10-15-13, 11:55 AM
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Re: Nickdawgy Visits Another Car Dealer... But This Time, His Brother-In-Law Is Buyin

I'm impressed that Nickdawgy took all the shit people gave him here, and applied it to future situations.
Old 10-15-13, 02:28 PM
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Re: Nickdawgy Visits Another Car Dealer... But This Time, His Brother-In-Law Is Buyin

Originally Posted by DarthVong View Post
Correct.

Yeah they hosed him on those extras. If he would have tried to secure a loan outside the dealership he would have been better off. There's no magical wand we use to get you approved. I'm sure if he went to a credit union he could have gotten either a better rate or the same rate without all the extra bullshit.
Yeah, I guess he thought the dealer would be able to approve him more than the credit union or anywhere else would.

Originally Posted by DVD Polizei View Post
Uh, this. He shouldn't be financing anything over $5K. I predict the car will back at the dealership within a year. You don't need to finance a $31K car to get good credit again. You'll just get robbed by the bank who finances you, and laughed at by the dealership.

His Debt To Credit Ratio on a $31K car will keep him in the low 500's much longer than if he were to finance a $5K car over say, 36 months.
The car definitely won't end up back at the dealer, at least not anytime soon. Maybe if he trades it in in 4-5 years. He told me his plan is to pay it off within three years, and he now has the income to do so. He said he is going to pay at least $1k a month on it.

Originally Posted by EddieMoney View Post
I think he should've bought something a wee bit cheaper.
He was looking at the smaller Elantra, but he wanted bigger and fully loaded. Hey, it's not my money, so I couldn't really sway him.

Originally Posted by Kdogg View Post
$2800 for the extended warranty is flat out theft on the part of the dealer. If you really wanted you could get it at least half, but what's the point? Doesn't Hyundai already offer a 5 year warranty on new cars? I think the battery system is warrantied for 10 years and the battery itself for life.
The thing that made me mad about the warranty is the finance manager gave him the whole peace of mind speech, you know the "you have a lot of electronics in the car, if they break it'll be pricey, and this will help..."

He also told him he'd knock off $500 if he bought it now. Then added it back on the next day when he told him he lowered his payments, along with the security thing.

Originally Posted by Deftones View Post
fiscally irresponsible people will continue to be fiscally irresponsible.
Well I learned my lesson, so that's not necessarily true. This is his first new car and high payment, so lets hope he learns his.

Originally Posted by mndtrp View Post
I'm impressed that Nickdawgy took all the shit people gave him here, and applied it to future situations.
I tried to take the stuff I learned here and help him. I'm still trying. I used to think people were picking on me with the "you got raped" comments, but lets face it, I did. I'm just glad I paid off the car before I took the full brunt of the pounding

Now I told him we should head to the dealer, and try and remove the lo-jack thing, and the warranty. I didn't see anything in the contract about raising the rate if the options were canceled.

What sort of resistance should we expect? Should we bargain with them and say we will leave it on if they lower the price? Should I ask for anything extra? Is it even possible to cancel the lo-jack thing? It hasn't been installed yet.
Old 10-15-13, 06:17 PM
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Re: Nickdawgy Visits Another Car Dealer... But This Time, His Brother-In-Law Is Buyin

I'm more surprised that $32k is the sticker price for a loaded Sonata. That sounds more in line with the Elantra. Has Hyuandi really gone up in appreciation that much to warrant that kind of price for a new one?

If it's any difference, I'm not sure of the amount (YMMV), but I know lojack gets a larger discount than a standard anti-theft device on your insurance. Whether or not it offsets the cost I have no idea as I've never had it, but my agent emphasized that when I was car shopping a couple of years ago.
Old 10-15-13, 06:20 PM
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Re: Nickdawgy Visits Another Car Dealer... But This Time, His Brother-In-Law Is Buyin

Please tell me that you didn't co-sign for him.
Old 10-15-13, 06:27 PM
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Re: Nickdawgy Visits Another Car Dealer... But This Time, His Brother-In-Law Is Buyin

Originally Posted by My Other Self View Post
I'm more surprised that $32k is the sticker price for a loaded Sonata.
Elantra is the smaller/cheaper car here, comparable to a Civic. The Sonata is comparable to an Accord. I think you are confusing the two cars. While I think it's absurd to pay $32k for a Sonata, I can see how that can be done if you get all the options. There's no way you could get an Elantra to $32k. Just looking at their site, the most I can get the MSRP on one is about $25k.
Old 10-15-13, 06:31 PM
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Re: Nickdawgy Visits Another Car Dealer... But This Time, His Brother-In-Law Is Buyin

Originally Posted by Deftones View Post
Elantra is the smaller/cheaper car here, comparable to a Civic. The Sonata is comparable to an Accord. I think you are confusing the two cars. While I think it's absurd to pay $32k for a Sonata, I can see how that can be done if you get all the options. There's no way you could get an Elantra to $32k. Just looking at their site, the most I can get the MSRP on one is about $25k.
I know Hyundai has changed their image in recent years but I can't get over that kind of price for a Sonata. I did confuse it with the Elantra. For some reason I thought the Sonata was their second-tier sedan.

Couldn't he have gotten a Genesis close for that price? At least those look sporty. Maybe I'm just completely out of touch with Hyundais new pricing models.

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