The rise of the scammy car loan
The rise of the scammy car loan
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This article pisses me off. Back in late 2020 I went to a dealership to buy a new car, very high credit score, 1/3 cash down, and qualified for a 0% interest deal that was going on at the time.
The dealership came at me with the most bullshit offers, tried to get me to take dealership financing at 4%, then 3.5, then 3% at a longer loan duration and acted like they were doing me a favor the whole time. Finance guy was being such a dickhead about it even the sales guy started getting pissed at him.
Took nearly 6 freaking hours to close the deal. Finally got my 0% offer and expected financing/cost because it was 20 minutes to closing time and I was like “fuck it, I’ll go check out your competitors tomorrow,” keys in hand, walking out the door. Sales guy literally chased after me and stopped me at the car to say the finance dude finally caved.
Fucking scumbag stuff. Dealership changed their name a year later and I don’t wonder why.
And then you kept walking because fuck those guys?
Nah, I bought it because there wasn’t going to be a better deal, I did my research for weeks and months prior and that 0% popped up in the middle of reviewing options.
I think they tried the push because it was the last day I could get it before the deal expired. The zero % financing was via the manufacturer, not dealership.
And they make less money on that than the dealer financing options. No surprise they were being pushy about it.
I mean, I was already preapproved for a 2.5% loan and qualified for the 0% offer, made that clear. I was very up front there would be no dealer loan.
I made it dirt easy, like “I’m qualified for this zero interest deal, I’m willing to pay up to $10k in cash up front. Make it happen for $300 a month or less with those terms and you have a sale.”
They still fucked around so hard. I really was ready to walk out empty handed, they made the deal literally with me unlocking my old car to leave.
I admire your patience. I would have walked out an hour in.
I had really specific requirements on the car in terms of capability and price since I was moving to a rural area and my old car was a 14 year old Hyundai Accent with bad suspension. Didn't want a truck or anything too large, but needed a car that could handle some off-road and country roads, and had around 7" or better clearance, and couldn't have a dual clutch transmission (either traditional or CVT with no dual only). Basically it came down to the Honda CRV, Kia Sportage, and Toyota RAV4.
CRV was my first choice, but its front bumper rides low, reducing it's clearance below the frame height, it can't even get over low objects. RAV4 was ideal, but like... $8k more expensive than the sportage, at the time the sportage was just under $24k new (crazy, since I was seeing used ones with up to 45k miles going for $27-28k).
So, I was sold on the Kia and just considered it kind of around my hourly rate. Even if it took all day, I was saving minimal $8k compared to my next best alternative and my hourly rate at the time for work was like $42. Even if the prices were the same, just factoring the 0% finance deal when my best pre-approved loan rate was 2.5% would save me well over $1k on the life of the loan, and around $400 in just the first year, so I figured it was totally worth a few hours of haggling and stalling on them.
When I moved I bought some nice all-terrain tires (Nitto Nomad Grapplers) for a few hundred bucks and it's been solid. No complaints, decent performance, and I don't get stuck in the mud at all. :)
0% interest rate is usually given in lieu of a cash back offer. So, you could get like $2500 cash back and a 4% interest rate or a 0% interest rate with no cash back.
My strategy would be to take the cash back, take the dealer loan to reduce friction, and then refinance immediately when you get home at a lower rate.
0% was a brand-wide deal (manufacturer, not dealership) to get rid of previous year stock, there was no cash back option on it. Plus, there’s no lower rate than zero, and best I could get with a different loan was 2.5%. Though I did reference said pre-qualification during negotiation when they made the crap offers. Made it clear I wasn’t walking out with a dealer loan.
How do you refinance? I was always curious about that. I’ve checked banks and my credit union but they always came in significantly higher than dealer loans, even if I chose the cash back
All Carsalesmen Are Bastards.
Defund the dealerships.
No fan of Musk, but this kind of shit and other scams are driving me towards companies like Tesla that are using a direct sale model.
Subaru dealers lied to me about the engine I was getting, said the head gasket issue was fixed. Turns out it was fixed, just not for the model of engine that was in the specific car they were selling me.
Then a different dealer did the head gasket job, thousands of dollars, and now they're telling me it needs to be done again four years later for another 5k.
A local Chevy dealer was screwing over their employees with wage theft by agreeing to give raises and then quietly taking them away later.
Fuck them all to hell, small business my ass. If you have to spend millions lobbying your state government to make direct sales illegal, I'm going to do everything I can to avoid giving you my money.