How are some car dealerships able to make you a deal REGARDLESS of negative equity and credit issues?
But other dealerships won’t even give you the time of day? I have had this happen just about every time I have purchased a car. The dealership will run my credit and tell me my score is too low, and that I need to have $4,000 to $5,000 down before they can do anything. I may walk into another one that will tell me the same thing. I wait a few days or a week later, go into another dealership and they are able to put the deal together. Most of the dealerships use the same lenders, so what is the problem? For instance, in May of ‘05, I purchased an ‘06 Isuzu Ascender. I traded in a car that my aunt had leased in her name only. Until I purchased the Isuzu, I had not financed a car in my name since ‘96. Before I got the Isuzu, at least four other dealerships told me they couldn’t get me financed. I went to an Acura dealership the other day to see if I could trade in the Isuzu. They told me I had too much negative equity and my credit score is low. But I have paid my car on time.
They appraised the Isuzu at $14,000 but I owe like $23,000. That is a big difference, but I can guarantee if I go somewhere else they will be willing to give me more for the Isuzu. It has 18,000 miles and it is in good condition. It just puzzles me as to why I can walk into one dealership and get financed regardless, and the others tell me no. Anybody ever had this experience or can you give me any insight. I really want to trade in the Isuzu but the Acura dealership told me to wait another year or year and half before trading it, because I am too upside down. Does it mean that you got a bad deal if you are very upside down?
The dealerships that are showing you the door are doing you a favor. You have "rolled" negative equity into new loans to the point that the "structure" is out of line with a prime lenders guideline. Most prime lenders will only finance 120% of invoice or low book if it’s a used car.
Sub-prime lenders (read that HIGH INTEREST lenders) are more flexible because they are making so much more money. That is how some dealers can "get you done". Look at what the "total of payments" line on the contract. When you sign up for this type of loan you can easily double what you actually pay for the car.
Do yourself a favor and listen to the ones that are telling you no. Stick with the car you have and try to refinance it with a lower interest rate and get the loan paid down. You’re only burying yourself deeper and deeper.
February 9th, 2010 at 6:52 pm
How do you have that much of a difference between the value of the vehicle and the amount you owe on it!?
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February 9th, 2010 at 7:17 pm
It sound like you prefer the companies that are putting you father and father into debt. Rule number one about buying a car, pay cash in full. I prefer the easy one payment plan. I do not want to pay 24000 for an 18000 car that wil be worth 13000 buy the time you finish writing your name on the contract. But if you have the resources to be driving on the next 4,5,6, years paycheck be my guess.
The companies that do not give you a loan are the reputable companies, the one that give you a loan are the questionable ones.
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February 9th, 2010 at 7:31 pm
becasue the delership has its own wholesale line…which means they are the ones giving you the money for your car and with that they also set up strict payment plans and some delerships even have things installed into your car that it wont start if you havent made you payment………the other delership use outside banks and have to use theri credit terms..
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February 9th, 2010 at 7:42 pm
now days they have places that will finance anyone,you can file chapter 9 one day and buy a new car the next month,its that simple,but its the interest rate most people don’t look at,notice what they,ll be charging you,and you,ll see why you can be financed so easy,but any one, no matter what has happened to them can buy a new one now days.its just the interest rate they,ll be paying makes it not worth doing,good luck hope this helps.
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been a certified mechanic for 37 yrs.
February 9th, 2010 at 8:07 pm
car dealerships want to sell cars, they will do things that you dont expect if it helps them sell a car in the end
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February 9th, 2010 at 8:32 pm
it is possible that the dealership that was able to arrange a loan for you guaranteed the loan to the lender, in other words if the loan goes bad he pays off the debt, you are upside down in the isuzu.
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32 yrs car business
February 9th, 2010 at 9:21 pm
There are some dealerships that recognize that a certain segment of the population is credit challenged and make an effort to attract business by offering subprime loans to these people. Other dealerships probably do not want the hassle, especially a high-end dealer like Lexus. Virtually anybody with lousy credit can find a loan if they look for one. However, they are going to get that loan at a much higher interest rate and pay much more for the car in the long run.
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February 9th, 2010 at 9:58 pm
You have to remember you are dealing with a fat cat that invested $$ into buying and selling cars and trucks, no Isuzu themselves. So basically it is who ever wants to deal with you. Every private party takes a risk when leasing a car that they own, it just depends on the risk they want to take, their insurance and how they repossess a car. If you are being financed thru Isuzu they will always finance some sort of credit, BUT if it is proven that you WILL NOT pay the car payments they will turn you down.
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sold cars privately and thru a dealership
February 9th, 2010 at 10:17 pm
Taking the last first, the price you pay does indeed have something to due with what the car is worth in 2-3 years. Most cars depreciate at about 50% after 3 years of their MSRP. It could also be that you set up your loan where the princial that is being paid isn’t ebough to keep up with that depreciation (like a 4 year loan when you plan to sell it year 3).
Regarding the credit and negative equity…some dealerships have access to different lenders that will provide financing for upside down and/or credit issues. They always have the car as collateral but usually won’t lend more than about 80% of the new car. They roll your negative equity into the new loan and then determine if you can make the payments based on your income and past credit history. With credit issues, presuming you have the income to cover the new payment, they adjust the interest rate up to compensate for addtional risk.
Also there is the factor of how much inventory is sitting on a dealerships’s lot that they want to move. If they can move it without the additional risk, they’d rather do that than finance something they know you won’t be able to make payments on. given their source of financing which varies by dealership.
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February 9th, 2010 at 10:55 pm
The dealerships that are showing you the door are doing you a favor. You have "rolled" negative equity into new loans to the point that the "structure" is out of line with a prime lenders guideline. Most prime lenders will only finance 120% of invoice or low book if it’s a used car.
Sub-prime lenders (read that HIGH INTEREST lenders) are more flexible because they are making so much more money. That is how some dealers can "get you done". Look at what the "total of payments" line on the contract. When you sign up for this type of loan you can easily double what you actually pay for the car.
Do yourself a favor and listen to the ones that are telling you no. Stick with the car you have and try to refinance it with a lower interest rate and get the loan paid down. You’re only burying yourself deeper and deeper.
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