Financing problem after driving out the dealership

[ub4me]

Hi, guys and gals. I need your help!

I bought a PR5 for $16500 ($3000 down payment by credit card and $13500 financed) ten days ago, and I have driven it on 400 miles. At the time I bought the car, because I brought an offer (4.49% 60-month) from Synergy Bank through LendingTree.com, the F&I guy gave me 4.68% 60-month through a local bank. So I accepted it, and I thought this was done deal.
Yesterday, however, I received a letter from the local bank saying that my application was denied due to insufficient credit references, excessive credit inquiries, and value or type of collateral not sufficient. Even though my credit score is not bad (FICO: 692, TransUnion: 738) and I have no late payments, my short credit history (5 years) and short employment history (6 months, I graduated from a graduate school last May) seem to cause problems.
Actually I have enough cash to buy the car. But the reason I financed was that I wanted to build a good credit history through the car loan to get a good mortgage rate for the future home purchase.
Three day ago, the dealership called me and asked to fax them a copy of payment check. I assume they are trying to find another bank that accepts my loan application. And today I accepted Synergy Banks loan offer by online, but Im not sure whether they finally send me a check because it was conditional approval that remains review of recent credit report which would include $3000 down payment by credit card.

What if Synergy Bank wouldnt approve the loan, and what if the dealership couldnt find any banks that would offer me a loan, or what if they asked me to sign a higher APR loan? Should I ask them to honor the initial APR that they promised? If they couldnt, can I return the car?
If I recognized that my application could be denied, I mustve not driven the car to my home and I mustve waited until I got the result. My bad!
If I have to pay the rest by cash (I want this method as the last resolution), can I negotiate the car price even though I already possess the car?


Thanks in advance. I really appreciate your time and comments.

 

[KYREDP5]

You cannot make them agree to the original APR. If you read what you signed you would sse that the APR is conditional upon approval. You can go with a higher APR if you want, but I would try to negoiate with the cash. If they're not willing to negioate then they take the car (they take a loss on the car) and you can go elsewhere.

 

[Dimitrios]

OK, first, stop "shopping around" for different loans and rates. The banks will be hitting your credit score and each "hit" will lower the score (only inquiries by yourself won't affect the score, no matter what any dealer or financial/bank center says).

Second, are you sure the letter from the bank was from the bank, or from the dealer or other organization respresenting both (be clear about this fact).

Basically, if you approved/agreed to the terms of their financing (60 months @ 4.68%), it means they also agreed to it as well. The bill of sale and all the papers are a writ of contract agreement. They are as liable to fullfill their obligation of the term (i.e. finance the vehicle at that those terms for you) as you are (to pay it back at those terms). Note how "..at those terms.." is key here.

My inclination is that you're *about* to get screwed if you go shopping around again or accept a higher term rate that the dealer offers because they "shopped around", but they come back with " Good news, we lowered your monthly payment! All at 7.00% and 72 months! Come in now so we can get the paper work done!!".

You are on the right track, sorta. As I stated above, the terms have been agreed to. You and they agreed to the paperwork, as filled that day that you picked the car up. Period.

If they give you s*** about it not "being valid", tell them that you'll have the Better Business Bureau on their ass faster than they can reply with "I'm sorry sir...you're correct sir..."

Be firm about what's going on. I would not submit anything to the DEALER. If there are any financing issues and the bank is local, talk to the BANK. Walk (or drive ) and get business done there. They own the car now - the dealer doesn't.

When you wrap it all up and come up on top, make sure you go back to the dealer and let the manager know about your experience (i.e., complain). They've probably been screwing people for years and no one knew the difference.

For some more "firepower", check this site out:
www.carbuyingtips.com

I used some tips from the site to finance my P5 and came out a victor to be sure.

Good luck; keep us posted.

 

[ub4me]

You cannot make them agree to the original APR. If you read what you signed you would sse that the APR is conditional upon approval. You can go with a higher APR if you want, but I would try to negoiate with the cash. If they're not willing to negioate then they take the car (they take a loss on the car) and you can go elsewhere.

Thanks for the reply.
If I return the car, roughly how much should I expect for the loss on the car? As I mentioned, its odometer is now on 560 miles. When I took the car, it was 150 miles on it because they brought it from another dealership which is about 2 hour far from here. Then I drove 400 miles on it.
I heard that if they take the car back, they would not return my down payment which is $3000, or they would charge me $2000-$3000 for the loss because it is not brand new anymore. If so, I should pay the rest by cash. But this would be the last resolution.

 

[ub4me]

Thank you for your comments, Dimitrios.

As you advised me, I will not shop around anymore. I will just stick with Synergy Bank or eloan (I got 6.39% for 36 months from them also) or deal with the dealership. If nothing will work, I will pay by cash or return the car. But I want this method as the last resolution.
And the letter saying my application was denied was from the local bank alone not from the dealership nor both.
I hope they can find another bank that will offer me the loan. If not, and if Synergy Bank finally approve me, I will stick with them.
But I'm not sure whether I'm in a good position or a bad position.
I think Mazda USA has their own loan programs. If so, can they provide me the same rate loan?

 

[TurboBunny]

Actually, feel free to shop around for the best Auto loan you can....Your credit score should not be affected. Transunion, Equifax, and Experian should only count your multiple AUTO loan inquiries as ONE inquiry (within 14 days). They understand that people want to get the best loan possible so they shouldn't ding you for that.

http://www.myfico.com/myfico/CreditCentral/CreditInquires.asp#80

Also the dealer has to make you "whole" if they were not able to live up to their end of the contract and find you financing at the rate you agreed to. Which means that they will need to give you ALL of your $16500 if you return the car (well in this case just your $3000 downpayment)...and they take the loss of having to resell an essentially used car.

This is California law:
http://www.bbbsilicon.org/topic026.html

They are going to try to make you put more down or offer you a higher interest rate so that they don't get screwed....but you don't have to put up with it if you don't want to.

Just tell them to go screw themselves

They will either drop the price of the car to get you financed for a lesser amount, search desperately for the interest rate you agreed to, or just take a loss on the car when you return it....Either way, you should be good to go.

They just count on the fact that you are going to be so in love with your P5 that you would do "anything" to keep it.

Good Luck!

-J.J.

 

[70]

Do you have financing paper work from the dealer?

I only ask because there are two right things that people have said, btu they are sort of wrong by themselves. The financing paper work will say subject to approval on it. But, if the dealer wrote their name in the top as the financier, then they are the "bank" and you can push them on the loan rate and everything else and make the payments to the dealer.

Dealers try this scam all the time. If the dealer's name is on the financing agreement as the financier, they "approved" you right there.

Does that make sense??

However, it sounds like you bought the car on terms of a "payment check" being delivered by a certain date. In which case you will have to talk to dealer to about the money you owe them from the "check." You will have to work out arrangements so they understand what happened.

Also, the best way to improve your credit score is by using a credit card. Charge $40 a month and pay it off every month. That will imporve your credit more so than financing a car right off.

 

[Rah Sham Bo]

Do you have a copy of your credit report? If so you can fax the lenders the report so they don't hit yer credit. This is a good way to "shop around" without your credit being affected.

 

[Dimitrios]

Yeah, I guess I should have clarified; I didn't mean that "shopping around" would affect your score. If YOU shop around, then it shouldn't; however, if you continuously authorize a bank or dealer to "ping" your credit history, you will get a lower score (it appears as if you're continuously being "rejected").

As other's said above, know your complete credit score (from all three bureau's) and go forth.

 

[loccusst]

You don't want to SHOTGUN your credit.... this is what happens when you shop around with dealerships. The dealership sends it out to every bank they can. Faxing your report to the banks or going to the banks yourself is the right way to do it. Since they let you drive the car home its their problem if the financing doesn't go through. They can't make you pay for the period of time you had the car. If you signed the paperwork then thats the percant to be financed at and the dealership has to figure out how to achive that.

 

[ub4me]

Thank you guys.
I haven't heard anything from the dealership yet. I think they are still looking for a bank.
But I finally got a loan final approval from Synergy Bank (4.49%, 60 months). I think I'm in a good shape because if the dealership couldn't find any bank and ask me to pay higher rate APR, I can threaten them with this.
When the dealership asked me to send them a copy of payment check, they didn't say anything about the local bank's resufal on my application. Neither did I.
I'm not sure how long they would try to find.
If it takes long (like 2-3 weeks), should I contact them and tell them I would use my own loan?
My car's temporary plate is going to be expired on 12/14.
I assume I need to resolve this situation before that. Right?

 

[ub4me]

I'm an idiot

Hello, all.
Here is the update.
The loan finally went through after I faxed my payment check.
However, I just found out that there is a penalty for the early payoff which is 1% of principle ($135 for me). Because I plan to payoff in two years, it will add $135 to my final price of the car. I should've asked it before I signed it. But it was the first time I bought a new car, so I didn't know there is such a thing. Today I called the F&I guy, and asked him why he didn't tell me about 1% penalty. And he said he did. But I never heard about it. He was lying.
The reason I accepted 4.68% APR even though I got offered 4.49% from lendingtree was that he said it would be much easier through the local bank, and there was not much difference between 4.49 and 4.68. So I accepted. I think I'm an idiot. :mad:
Anyway, I heard something that if I payoff or refinance within 3 months there will be no commission for the F&I guy. Is it right?
If so, should I seek revenge for him by payoff now, or by refinancing? Or just live with it, and do better job next time?


Thank you your time.

 

[webster]

I have use Capital One Auto Financing for my last 2 car purchases (formerly peoplefirst). The process is so freaking easy. You apply online knowing what kind of loan you are looking for (new car, used car, etc...) and for what amount you think you will need BEFORE going to any dealer.

I applied for $15K knowing I was going to purchase a P5 for around $13K and wanted to have plenty of room for tax, title, license, etc... I got the loan a 4.09% for 60 months (lowest possible at the time).

Now here is the best part. They FedEx you a blank check valid for any amount up to the amount you were approved for. The check is good for 30 days and there is NO penalty if you decide not to use it. They also guarantee their rate. If the delearship can beat it then they will beat the dealership.

The FI guy at the dealership didn't like me too much to say the least since he wasn't able to make a dime off me.

Needless to say, I will ALWAYS us Capital One for auto financing.

 

[mazdamanxl]

My thought is that they are not making any money on that loan but are just happy it got bought and are probably giving you "buy rate". If you are happy with the term, than just keep it. It sucks that there is a penalty to pay off a loan early. Here in PA there is none.

 

[Yaggie1]

Holy old thread bump batman !!!! That's gotta be a record !! (boom01) (wow)

 

[DaleNixon]

Yea dude's probably got that s*** paid off by now!

 

[DeadGeneration]

I almost died when I read "I paid 16,500 for my car a few days ago" than I realized the thread was in 2003 so the car was brand new lol

 

[Yaggie1]

LOL, my first thought too was man, that guy got screwed !!

I almost died when I read "I paid 16,500 for my car a few days ago" than I realized the thread was in 2003 so the car was brand new lol

 

[StealthWyvern]

I almost died when I read "I paid 16,500 for my car a few days ago" than I realized the thread was in 2003 so the car was brand new lol

+1

 

[clicknext]

lol how did this one possibly get dug up??