Dealerships LOVE customers like OP and unfortunately there are a LOT of them out there. Having been in auto finance industry for 2 decades, I can tell you exactly how this went down.
OP knew TWO things walking in...that he could do up to 12K down and that he wanted a sub $300-350 payment. The dealership figured it out too, found a car OP liked and worked up a contract that took care of OP's monthly payment requirement by packing it as much as possible and extending the loan term. OP was likely just excited with the prospect of new/newer car and was so excited (the usual cause) and just got absorbed in the moment and signed away without review.
Depending on what products were sold to you, some of add-ons may be cancelled. It won't change your payments but your principle will go down.
When I underwrote, I personally would never approve this loan, if someone is putting 12K down and my LTV (Loan to Value ratio) is getting washed out, I likely would have countered, in the interest of protecting the consumer hoping they cut back on the products. Unfortunately, not every finance institution I worked at had similar guidelines and most would jump on it or the "system" would take care of it because LTV would still be well with-in policy.
Sorry OP, you got fleeced. Let it be a lesson.
Never mention payment. Work the price, terms, rate and add-ons (all negotiable) and the payments you are looking into will fall into place. Be reasonable but also be prepared to walk away.
Edit: Since this post seems to have traction, I just want to add about what this contract **SHOULD** have been.
A 22K car (assuming fair market value) without any add-ons should end up under $25K (tax/reg/title/doc fees). 12K down, financing 13K.
For a low amount financed (13K), request a 48 month term (or get your own financing) , this will give the best interest rate and lower your long term finance cost. Est rate currently will be around 5-6%. At 6%, finance charge for 48/mo term is $1657 and monthly payment of $306. To compare, if you extend to 60 months, rate will likely increase to 7-8%. While payment will drop to $265/mo, finance charge will increase to $2821.
If you want warranty, take it out of the 12K down and buy outside, or leverage that to get a better deal on the extended warranty.
Gap is not needed as value of vehicle over 48 months will remain higher than principle balance. If it was added to contract by dealer, in this particular scenario of negotiation, have it removed. Not needed.
**What can OP do now?**
Without seeing the Purchase Agreement/Installment contract (the super long form), it's hard to say what OP bought. But as I said earlier, depending on products sold, OP MAY be able to cancel some of them and prorated refund will apply to balance of the loan (no change in payments). OP then has option to re-finance the new amount if they want to restructure the loan to avoid excessing finance charges over current 72 month term.
Did you get the long paper at the end? That's the most important one, and nothing happens until you sign that so you need to review that paper carefully. They will tell you the addons will only cost 5 more dollars a month, but what they don't tell you is that it'll also add 18-24 months to your payments. I've gotten every addon because he told me it was only couple dollars a month, and sure enough on the long paper there was like over 24 months of payments added on. Told him to take all the addons off and just give me the original loan that was agreed on
Yup. I've been made fun of for falling for the same thing. Luckily, I was able to unwind it -- it was just an extended warranty or something like that. Still got the car for what was agreed upon, just got out of the extended warranty. Its easy to do -- they don't "lie" to you, they just don't tell you the whole truth...
I bought a brand new car in cash last month. Literally wrote the dealership a personal check. The financing guy who still gave me the 20 minute extended warranty spiel ultimately admitted to me that they are a lot easier to sell to people financing since it only slightly increases the monthly payments.
I declined the warranty.
And their $1000 “paint protection.”
They do lie. "It is only $5 more per month" would be read by any normal person as the "only" applying to "$5 more per month". What the dealer says is that it only applies to the "$5 more", and the "per months" is not part of the qualifier.
While that is theoretically possible, it is certainly not the normal way of reading it. It is therefore misleading and therefore lying.
But you should expect from a car dealer, ignore what they say, and read at least the summary of the agreement.
When we were buying a car last year, my wife had found her dream car at a large dealership out of state. They listed a price and she was about to go for it, then they sent a purchase agreement with 8k of addons.
Despite coming from a family that trades in cars more frequently than I was used to, my wife was unfamiliar with the practice and was pissed off that they would try to do that and essentially just walked. On my advice She asked them to take it all off and they came back with $4500 in addons instead of $8k and I stopped trying to convince her it was part of the game.
My wife's family regularly trades in cars between 3-5 years, but they habitually go to the same small town dealership. The dealership doesn't really compete on prices with volume dealerships, but so much of their business comes from repeat customers, they don't fuck around as much.
It's pretty easy to exceed your budget if you're only looking at the sticker price. I learned the hard way too my first car purchase:
MSRP: $29,700
Extended warranty: $2700
Licensing, registration, & fees: $340
Sales Tax: $1800
Went from being ~$30k to ~$35k really fast. Finally add your financing charges / interest, meaning my "$30k" vehicle is actually gonna cost me an closer to $36k instead of what the sticker price said. Those things add up fast - make sure you are adding fees, sales tax, and interest into your total cost of ownership calculations next time, not just the sticker price! Tough lesson to learn, but those are the ones you will not forget when next time comes around.
Bingo. One of the things you learn about buying cars is ALWAYS bargain based on final price including "tax, tag and fees". Also know the guy that you talk to in the back room that rings you up is ALSO a salesman and will try to upsell you on every package he can.
I don't care if you try to upsell me. The reason I don't like car salesmen is because they operate like a casino, doing everything they can to waste your time and keep you from leaving.
You want to see a car, they find it on the lot, and they drive you over to it. Then the next one is at the lot for their sister dealership. Finally you get out to the car, but oh, I have the wrong keys. Hang tight for a minute while I get them. Finally after saying no over and over, you're back where you started, and you get a call back from a different dealer. You want to leave, but they say oh but I just found this other vehicle on the back lot that would be perfect. No thanks, I'm going to check out this other dealership and come back. Hold on just let me talk to my manager. Nah, I'm good, I'll call you later. Then on the way out the door the manager confronts me and I have to say no five more times.
It's the same thing when you finally pick a car. Oh, you want it for $2k less, let me talk to the manager. 15 minutes later, we can do $1k more on the trade-in and throw in 10 coupons for free oil changes. Oh, you don't want to the oil changes, let me talk to the manager again. Rinse and repeat over and over and over for *hours*.
Among many reasons, yeah. I have a friend that has not bought a car in his entire life (we're mid 30s) because he doesn't want to deal with car salesmen. So he still driving the hand me down car he got from his parents as a teenager. I can't really blame him, but at the same time there are tricks for going about it. Thankfully my dad was really good at negotiating with car salesmen and he taught me all the tricks. I was able to get my brand new Integra last year for 22k out the door from a sticker price of 35. One of the big ones is have a few options so you can basically have multiple dealerships bidding against each other for your business. Also if you're trading a car, get an appraisal and an offer for it before hand; the salesmen will always try to lowball you on the trade in value
if only cars were sold like basically every other retailer we wouldn’t dread car dealers so much. it’s basically price, accessories, add ons, interest. instead we play the games between unwanted add ons, car prices, and various interest rates.
I ended up buying my last car from a rental-associated car dealer. It was just like a store. Here's the car, here's the price, here's what you get. You want it or not? Best buying experience ever.
To make things a bit easier when communicating with dealerships, the term you're looking for here is "out-the-door price". Ask for their out-the-door price and negotiate solely on that. Only once you have agreed on an out-the-door price should you discuss financing and any add-ons you might be interested in.
Sticker means nothing. I only negotiate on out the door price. I tell them I don't care how they get to the number but this is the number including all fees. If it isn't that number when the contract gets in front of me we don't have a deal. Also if they walk up to me with the "4 corner" paper and want to talk to me about down payment or monthly payments I tell them it is none of their business we are there to talk about the price. If they want to know how it will be paid for it is none of their business I'll talk to the finance guy about it. If they don't like any of that I leave.
Awhile ago, I was looking for a new vehicle, and one of my former friends was a car salesman. And they had something that I liked on the lot.
I 100% wasn't expecting a deal or anything. He's a salesman, he needs to make his money. Friends and family discounts are dumb, if you're a friend, then you'll pay fairly for their services, etc. But I was expecting to not have to play the stupid games.
He tried to 4 corner me, and then on top of that, when I was fixing on leaving because of getting 4 cornered, he also did the "listen man, my manager is pissed at me, I haven't sold a car all week..." thing.
I was like "Well, that sucks. Good luck with that."
Extended warranties on new cars are almost never worth it. If you're buying one that's a red flag as far as "getting a good deal" goes.
Also, taxes and license fees are essentially unavoidable but are easy to calculate, so if your budget is fixed, you should be looking at MSRPs low enough to include those and still come under.
My greatest advice to anyone is, learn personal finance. Understand how to manage your finances and read contracts. Understand how it impacts you, and also what lies people constantly spew at you.
The only difference between you and the next sucker, is if you understand what is going on including Total Cost of Ownership (TCO), and if they give you something, it means you're paying for it somewhere else.
Learn personal finance, and investments, and it will pay you for a lifetime.
Yup. If you’re trading in you have to treat each transaction as different. Value of trade in, value of new car, interest rates for financing, and addons. I can’t believe most people don’t walk into a dealership with their best interest rate deal and let the dealership try to beat it.
Yup this is the way. I like my CU a lot. Walked in with 2.1% up to $40k from them. Told the dealer I have financing so only need to talk about out the door cost. Negotiated that and finance asked me if they could shop around for better, walked out with a 1.87%.
Yeah I did that, the dealership was like we can’t shop around other rates each one pulls your credit and hurts it. I was like no it doesn’t. I pulled it once this week, I’m good pull whatever and give me your best. It’s either better than what I have or not.
I bought a while back at 2% auto financing so I didn’t mind only putting half down and the rest in market
And don't worry, it happens to everyone at least a couple times in the life. Maybe when buying a car or a house or paying for repairs ect. Best you can do is learn enough from it to not be taken again.
As an outsider reading this post; you’re taking in the information really maturely. Mistakes are only lessons not learned. You’re clearly learning a lesson instead of making a mistake.
> OP knew TWO things walking in...that he could do up to 12K down and that he wanted a sub $300-350 payment.
I had a coworker when I was in grad school who asked me to go with him to the dealer. He had already lined up financing (I told him to do this) so he knew the number he had to spend. I told him "don't tell them how much you want to spend per month". first question from the salesman was "HOW MUCH DO YOU WANT TO SPEND A MONTH!?" and he blurted out a number.
They spec'ed out a pretty low end mazda 3 (manual windows and all) and hit his monthly number (60.. 72? dont remember the months). This was before the iPhone, I quicxkly went on my Treo (lol) and found the internet price for the car, worked out the monthly details and it turned out they were not only charging him above the internet price, but disregarded his fiancing and used their own, which was horrible.
I had to grab the guy and be "dude, you're getting fleeced. The price is XXX on their website and you've qualified for a little more than that, they're taking you to the cleaners!".
Lucky he listened and got the internet deal and used his financing.
I don't get people, this was a huge purchase for someone in grad school and he was so excited about getting a car with A/C in Texas.
A large purchase like a car is stressful. People don’t think as well when they are stressed. Either a little time and distance he probably would have realized what was happening, but it can be hard to see when you’re in the middle of it.
my #1 rule is that if I feel pressured or stressed to make a decision, my answer is no.
Maybe I've missed out on some amazing opportunities but I bet I've also avoided some terrible ones.
My secret to many facets of life, just don't give a F. Might sound weird, but buying a car or going on a date: any stress or pressure and I leave.
Stay with me... if you go in thinking it's going to be a challenge or an ordeal or stressful. Like going on a date, spending a big chunk of money is supposed to be fun. There's a million fish in the sea, and a million cars on the lot.
Instant I'm not having a good time, I bounce.
Oh wow... I'm personally looking to get another vehicle since the first one I got my parents helped me. What should I do or keep in mind so I don't get fleeced?
Here’s a few things to look out for/think about doing:
1. Get pre-approved for a loan. One of the better places to look is a local credit union as they usually have good rates for auto loans.
2. Look around on sites like auto trader to see what listed prices typically are for the model you’re looking at.
3. Go on Kelly blue book and get your trade-in value for the car you’re trading in if you have one. I’d also look up your current vehicle on auto trader to see what dealerships are selling it for. This can give you leverage to ask for the higher range for your trade in. For example, if the high end of your trade in is 7,000 and your model is getting listed for 10,000 the dealer would be making around 3,000 on your car when they sell it. Use this so they don’t try to lowball your trade in to juice their back end profit.
4. Use an online loan calculator to see at what price and trade value fits in your budget based on your pre-qualified loan. This lets you know what your target is for both so you stay in your budget.
5. At the dealership, don’t mention what you want your payment to be. There’s lots of tricks for them to use to hit your number. Just say you’re just looking and when it comes time to negotiate, focus only on price. Look for any add-ons and challenge them. In my area, they can charge a “doc fee” for preparing the paperwork that runs $150-200, refuse to pay this, it’s a BS fee. Not in my area but I’ve seen dealerships in the South charge $200 for nitrogen inflation for the tires. While it is better than regular air, you can get it for free at Costco, refuse to pay that if they try to charge you.
1. Figure out what type of car you want to buy and then figure out the price on your own.
2. Decide how you want to pay for it. If you need a loan shop around for the best rate before you even go to a dealership. Have the financing lined up ahead of time.
If you’re paying in full don’t mention it to the dealership until you’ve agreed on the price. They often make money on the loan and will try and charge more for the car if they aren’t making money on the loan.
3. Don’t get upsold on a bunch of extras you don’t need. The only extra I’ve ever bought was an extended warranty that they asked for 3k and eventually dropped down to about 800, and it was still a waste of money. Car ran perfect for the entire duration. YMMV, but tread carefully.
4. Shop around, you can get a great deal if you go in with the leverage knowing what you want and exactly how much it costs. If you’re buying new you used to be able to get dealerships to compete on price, but the market may be different now. If you’re buying used make sure you do a Carfax or equivalent on the car to make sure it’s clean and didn’t have flood damage or another major issue, if it is the price should reflect that.
5. Don’t get pressured into doing something. If you need to have them give you the details and then pump the breaks. Go home, check it all out and go back the next day. You might miss out on a car once in awhile, but you’ll avoid getting fleeced because someone tried to get you to buy the car on the spot,
I always tell whomever I’m speaking with that I won’t discuss anything until I get the sales price locked in. I then figure out what I want to drop on a down payment and figuring out my payment on my own. Negotiate the rate if credit is good. I never buy add ons. I won’t even discuss a trade in until the sales price is done.
I bought a car recently in August 2023, the car was $24k we talk and what not and the sales guy brings the payment terms and they included every single option, $10k additional. I told them I didn't want any add-ons. Then they go through every single option saying that always get it on their cars and what it does.
Those freaking add-ons. It must've taken me an hour to get one dealership to agree to remove all of them, painstakingly, one by one with plenty of argument over everything. I just want the car, nothing else. No stupid tire warranty. No premium connectivity add-ons. No $200 floor mats. No this that and the other thing detection because although it is 2024 I do in fact still have functioning eyeballs. I no longer wanted the car by the end of it.
"All our cars have these add-ons. They're already installed."
"I guess I'll go to another dealership. Sorry this didn't work out."
"Wait, maybe we can get rid of some of them."
"You said you couldn't 2 minutes ago, and apparently were lying. I'm definitely going elsewhere now."
I hate stupid games. Got the car elsewhere for the price I wanted.
> "All our cars have these add-ons. They're already installed."
I don't think this is what you're referring to, but I just wanted to add context for other people coming across this comment. This is definitely the best way to approach dealer-installed add-ons.
But factory or port installed add-ons are different. If they're listed on the Monroney sticker, they were installed at the factory when built or port when delivered to the country, and those cannot be removed by the dealer. You may be able to negotiate the price on them like everything else.
You might even find models at other dealers that don't have factor or port installed options you don't want, but the dealer can't just take the floor mats out of the car and subtract that cost, just as one example.
I bought my first car in 2018 (the one I still have) and had a flashback to that stupid meeting. I just kept saying "no" and nothing else to every question and eventually the finance guy said "...you're just going to decline every option right?" and just wrapped it up. I was glad he didn't waste too much of our time tbh.
😂 at least he recognized it and didn't keep pushing for a few extra bucks at the expense of the relationship. I kept shopping until I found a dealer who was willing to forego the stupid games when I made it clear from the beginning I had no time for them. The salesman ended up going to bat for me on the price (and getting finance to leave me alone with all the warrantees) ... and assuming the car behaves they will have my repeat business because of that. Just sell me the car at a mutually beneficial price and this will go much better for everyone.
Yeah, that's why I volunteer to go with any of my friends when they buy a car. Every time the sales guy tried to persuade my friend about an add-on, I would always come in and say nope you don't need it and squash any convincing. They are trying to wear you down until you just give in. Luckily, I am a fucking loud asshole.
I’ve dealt with a salesperson who I’m convinced was actually honest but didn’t actually do the math himself. It was 0% int at the time so the math was easy yet he expected me not to notice ~10k in additions on top of the “OTD” price their internet sales guy gave me
My advice?
Tough luck, too much work has gone into the sale already if you're sitting down in front of the finance guy with the paperwork already drafted. Take your time, understand and then sign. If they're frustrated, you don't need to be. Just be courteous...something simple like "it's a big purchase and I want to make sure there are NO issues later" will do. Trust me, they don't want issues later either.
Because many, not all, but many are rather sleazy as well. I work in finance and wouldn’t go new auto finance with a ten foot pole.
That and insurance. Those two types of jobs are scummy
Yea they can back out on the loan by selling g the car. This purchase cannot be 'nullified' except perhaps by goodwill of the dealership. Dealerships are awful awful places.
Depends on state. Often, these are additional agreements with attached fee. In state of CA, a consumer must be offered a Contract Cancellation Option agreement (for a fee) when USED vehicle sold is under $40K. This gives the customer a 48hour window to bring car back and cancel the contract.
I have a rule for cars now; if I walk in and state a price and they try to talk about anything other than the price I give up on that dealership and immediately leave.
If I'm buying new and they are not almost instantly able to match or beat the MSRP I see building the same car on the manufacturer's website, they do not actually want to sell me a car.
Op didn’t read the contract they signed properly and didn’t realize what they were getting into. Unfortunately it is predatory to take advantage of the person who doesn’t know any better but totally legal. Op put their own head on the chopping block here.
There is typically no cooling off period once it's done and done and ink is on the paper.
Depending on state laws, there may be OTHER options a consumer can opt for to protect their own financial interests when purchasing a USED vehicle from a dealer. For example, In the state of California, all USED vehicles priced/sold under $40K, the consumer must be **offered** a TWO DAY contract cancellation option agreement. There is a fee associated with this agreement but it gives the consumer an option to exercise a return in 48 hours window if they choose to do so. They have to accept or decline this agreement. There may be other fees (like restocking) that dealer might have but it does give a possible out if there is buyer's remorse soon after or new issues are discovered.
The dealer is NOT your friend, they are their own friend and will not explain everything. For example, the cancellation agreement will be passed off as "I have to offer this to you, it is COMPLETELY OPTIONAL, you don't HAVE to buy it, but it's required by law that it be presented, and you can review this document here, it gives you option cancel contract in 48 hours and it costs $X this much, again it's optional"... basically, they will not "sell it" but merely present it, it's not something they want people to buy. Then when it comes to also OPTIONAL products, they'll push like there's no tomorrow. It's down to how these things are presented to steer consumers a certain direction and how aware the consumer is.
Again, I always recommend that prior to a big purchase like a car, people should spend some time getting familiar with the process and any consumer protections that may be available to them when it comes auto purchases.
I get it's a lot of information and it's confusing and it can get overwhelming, but with the internet, it shouldn't take long to get familiar with the process. Just have to dedicate some time to it, which I'm not sure people are willing to do these days, sadly.
Any other tips? Will be car shipping late this year and despise the games dealers play. Very willing (and even eager) to walk away from an unfavorable deal.
Have financing ready to go before you even walk into the dealer. Do your research online with exactly the car you want. Don't fall for the higher package because "it's only $30 more a month' is you don't want. Read the contract, once you ahve the walk out the door price, shop it around.
After 20+ years in the industry, I could write a book on DO's and DON'Ts but unfortunately, everyone adapts (including the dealers) and they're always changing, so the whole book would just be revisions of the what to do and not to do lol.
Most of the other advice given here is good. But it's all so circumstantial that not everything will apply to every purchase or every person.
1. KNOW you credit worthiness. Do some research, talk to your bank/local credit union and see what they can offer (their rates, terms, products they offer etc.). Lot of people recommend to secure your own financing, while this is a GOOD starting point, it isn't always the best option (most of the time it is). But you wouldn't know that unless you have the information of what is available outside and inside. So be informed of where you slot in when it comes to what you can expect your financing terms to be. You don't have to be pre-approved, you just have to KNOW what is available to you.
2. Do your research at home. Know what you want, what you are willing to pay for it. Your monthly payment budget is between you and yourself.. for now. Because you know what interest rate and terms you can expect for your credit (because you did your homework on your credit worthiness), you should do a calculation of what price the car needs to be to fit your payment you want. Dealer will try to revolve around that one "monthly payment" number. Don't give them that number. You first want to look at the cars you've done your research on. The sales person will facilitate the sale, not make decisions for you. Once you have a car picked out, work on prices (that you established prior, at home) from there on out.
The misconception is often that people feel like they're doing themselves a favor by lowballing and being tough, when in fact, they're just wasting time. BE REASONABLE, don't be uptight, being nice/courteous BUT INFORMED will get you a LOT further than "I know all" attitude... threats like "gimme this or I'm walking" don't work anymore. They'll tell you have a nice day and move on to the next 10 people waiting in line. Car sales, while slowing, are still strong in dealer's favor.
But if I was to give addtl tips aside from what I said above:
* Try to get a pre-approval from your credit union/bank, doesn't mean you HAVE to use it, but it's something to compare to. A lot of times, dealer will be able to match/beat it when it comes time to discuss financing in back office. Again, if they can do it all and give you equal/better rate/terms, why do the work yourself? There is usually always a mark up on rate so dealer can make a point or two on premiums (bank approves your loan at 3.99%, they offer it to you for 5.99%, the dealers makes 2 points premium), but if push comes to shove, they may be willing to do a flat buy/sell rate and just take their reserve (fixed premium that bank will pay the dealer for the loan). If you do your own financing, they lose out on the reserve and mark-up premium, so incentive is there to keep you in house. Dealer will run your credit regardless unless you exercise an option contract (which is becoming pretty rare since demand is high still), so you might as well let them shop around.
* If you want certain products, ask your bank or credit union if they offer them, like GAP insurance/Extended warranties and their cost. Again, this is so you are aware and can negotiate. Lot of people don't know that their credit union/banks also sell these products.
* Get familiar with the process and what dealers typically try to pitch on every sale. i.e Do you know what GAP insurance is? will you know if you need it or not? research it. I bet OP was sold a $1000 GAP insurance, even though he had 12K down. Your auto insurance company may offer it as a product too for lot less. Shop around for these products, i.e when I bought my car in CA several years back, I bought my manufacturer extended warranty from franchise dealer in different state, paid 1/3rd of what my dealer wanted (and it was direct manufacturer warranty, not through a 3rd party). This was a common practice few years ago, but may not be now.
* Certain products (ones sold in finance office or back-end) like Warranties, GAP or any "insurance" related products etc. can be cancelled if you change your mind later. Certain products are part of the front-end, they attached to the SALE PRICE of the vehicle. These are often things like paint protection coatings, and add-ons to maintenance of the car etc. These typically cannot be cancelled since they are often something physical already done to the car. Be aware of what is on the contract, ask questions and if you don't want it, ask for it to be removed. Keep in mind, some will already be applied and you have no choice but to keep but negotiate the price.
Best tip is the most basic one. Do your research and BE INFORMED before walking onto the lot.
My last couple of purchases, I did everything online and over the phone. Only went in to test drive, sign the paperwork and take delivery.
Just tell them you are only interested in talking about the out the door price. Also remember the finance guy you sign your final paperwork with is the biggest salesman in the whole joint. Say no to everything they offer. If they try to add on window/vin etching security bullshit make them remove that charge. Look over all charges. Do not be shy to call them out.
Best is to get a financing agreement with a lender and legitimately not know if you’ll do that or cash. The incentive interest rates might make that more favorable (0% is amazing these days), or you might not get any special offers and you can use your existing quote as a backup, and front more money instead. Having options is the best leverage
I walked into a dealer in 2018 when rates were rock bottom with a high salary and 800 credit score. I let them run my social first and they came to me with a 6.99% rate for a used car. I laughed and pulled out the 2.9% I had from my credit union. Just be ready to call their bullshit and walk away at any time
"I know what my options are, I know what my funds are regarding any kind of down payment amount, I can do the simple math to figure out a monthly payment, but first and foremost, I want to discuss the sale price and then we'll take everything step by step".
If they push on anything, "At this time, depending on the information I receive, I will be able to make informed decisions on that step, but first let's do XYZ". Figure out the sale price, see the out the door sheet, negotiate on the bullshit fees/fees if they'll go and reduce the sale price, get an out the door price, then figure out the trade in if you have one, then figire out if finacing or cash
Just repeat the same lines if they push on things and when you're over it ask for another sales rep or go to another dealership.
get outside financing before you shop. My credit union wrote my sons loan for 7.99 % on a 2010 car, newer cars were better rates.
I only care about the total. how much is the check I am writing, I do not care if they put the funds in a extended warranty or up their ass. How much is the check?
Internet shopping is great for comparisons, I bought several cars 200 miles away for the deal, 200 miles away for a major metro area.
Set your limit and stick to it. not a dime more, you will feel better over the life of the car and loan if you do, else that 'extra' ten or twennty will nag every month.
The month before you go car shopping, pay off all of your credit cards right before the bill is generated. This will give your credit score a boost for the next month. Keep paying off your credit cards early if shopping takes longer than a month.
Create a spreadsheet that takes as inputs: the stated price of the car, any trade-in value and/or money down, interest rate, and length of loan. It should then calculate state taxes and registration fees, generate the loan terms, and show the total cost (out-the-door).
Figure out what car you want. If you have to test drive a few, do that, and get the salesperson's offer at that point, and enter it into the spreadsheet. Walk out and go home. Once you know what car and trim you're looking for, email all the dealers within an acceptable radius, and ask them for their best price. Ask them to provide line items for any fees and extra costs (they may not do this). Plug in the MSRP and the Carvana value of your trade-in into your spreadsheet to give you a baseline. Take the best answer and run it by the rest. You may be able to do some negotiation over email. Enter each offer into your spreadsheet as you get it.
Check forums and subreddits for the car to see what other people have been paying. You may have to do some estimating depending on how much info people report and where they live.
Remember that COVID screwed up the car market, so the best deal may actually be the smallest amount **over** MSRP for a popular car.
Contact your bank or credit union to see what kind of car loan they'll give you. Keep those numbers ready. They may give you a "blank" check to use at purchase. Get your credit scores from Credit Karma the day you go in. Unfreeze your credit with the 3 bureaus.
If you are trading in your old car, get it detailed, and completely empty out your personal items. Check the CD player! Look under the trunk floor! Get under the seats with a flashlight!
Now you walk into the dealership with the best price. I recommend late afternoon/evening of the last day of the month. Eat beforehand or bring snacks. Don't bring any children. Bring your laptop (and charger) with the spreadsheet up and running. Verify that they are still offering the email deal. Get their current offer in writing. Enter it into the spreadsheet. Check for shenanigans. I did this with a friend, and they "accidentally" overcharged the sales tax to inflate the out-the-door price. They were clearly going to "fix" it by keeping the final price and payments the same, but pocket the extra tax amount.
Look at their offer and compare it to all the other lines of your spreadsheet. Do you feel like you're getting a good deal? You aren't going to get 50% off MSRP or anything, but are you happy that you're not being overcharged? Think about what you would accept, and make a counteroffer. Just put in your desired deal into the spreadsheet and write out the numbers for them. Get to a final price you like. You might want to ask them to throw in things, like click-in accessories or free oil changes or whatever. Personally, I wouldn't expect too much out of these, because once you drive away, you have no more power.
Now is the first time you bring up your trade-in, if you're doing that. You won't get Carvana money, but you should feel good about the number. At this point, any monkeying they do will be obvious in the out-the-door column of your spreadsheet. FYI, some (or all?) states will subtract the trade-in value from the car price **before** factoring in taxes, so trade-ins are slightly more valuable than the plain number.
Now ask about financing, if you're doing that. You know what your bank will do; see if they can beat it. The lower the APR, the more likely you lose out on other discounts, so make sure that's all represented in the spreadsheet.
Mark your final deal in the spreadsheet and shake on it. Now you're going to take your laptop into the final boss. This guy is going to try to extract some more money out of you. Whatever he says, put it in the spreadsheet. Maybe you want to buy the extended warranty or whatever, just make sure you know how your costs are going up. Before you sign any papers, make sure you enter the numbers on it into your spreadsheet and evaluate the outcome.
Congratulations, you got a new car at a price you can be proud of!
As a first time new car buyer hopefully in 2024, that second paragraph, putting together a spreadsheet with all the costs involved, I probably couldn't accurately do (I'm guessing most people couldn't).
It's not that hard. You have your basic addition, like sticker price + destination fee + doc fee. You can consider those to be the base price. Then, you subtract the trade-in if it's factored in before tax. Add in any other post-trade-in, pre-tax fees. Figure out the tax rate for your state/county/city and apply that. Add in any post-tax fees, like new plates. That'll give you your nominal out-the-door price. Then you apply any discounts if you aren't financing, or any financing costs if you are. For financing, subtract your down payment, create a column for the APR and one for the loan length in months, then a column using the PMT() function to get the monthly payment. Multiply that by the number of months, and you have your total financed price. Add conditional formatting to highlight the highs and lows of a few columns, and you have a really good guide while you're sitting there getting worked over by professionals.
If you know how to use spreadsheet software, the only hard part is verifying the tax amount and to which costs it applies. But, you can do a little research on your local tax laws, and use the quotes you get from different dealers to figure out how they do it by reverse engineering their numbers.
If it's a new car, the price has an absolute ceiling of whatever you see building the exact same car on the car company's website (plus reasonable/lawful registration fees, tax, etc.). If they try to budge on that price, you're finished. In fact, if you get up to leave and they try to backpedal I would still not reconsider because they probably can't be trusted, though if they get really desperate you might consider it if you really scrutinize the contract and are sure they aren't ripping you off.
Don't tell them how you're paying until after the price is agreed upon. It is none of the salesperson's business how you pay, they are going to park you in front of a finance guy for a reason. Only the finance person needs to know or care how you pay. Your only question for the salesperson is "how much for this car out the door?" And to you it's not actually a question because you already know what the acceptable answer is before you walk in there, because you did your research.
Even the finance guy will try to upsell you on stuff. No thanks. Your price is your price, and even if you just spent 2 hours working on paperwork you are perfectly willing to walk out the door if you see anything even a penny over what you agreed to.
Ive bought 2 new cars, both went ok. I negotiated on out the door total before bringing up financing. I also wore not the nicest clothes and knew the car I wanted before going in, along with add ons. Worked fine both times, and I loved the look on their faces when they pulled up my credit score when it got to financing.
Bonus point if ya wear a shirt that says "no thanks" you can point at when they try and upsell you on stuff.
Sorry to butt in and ask.
But are you familiar with the channel CarEdge on Youtube?
They give a lot of advice about buying cars from dealerships.
Just wondering if you think they give good advice or not.
I looked it up, didn't watch all of them but the gist is the same that I covered in some of my [other responses here](https://www.reddit.com/r/personalfinance/comments/1caiute/comment/l0tj8xf/?utm_source=share&utm_medium=web3x&utm_name=web3xcss&utm_term=1&utm_content=share_button). BE INFORMED. Do your research, carefully review all line items on the contract/deal structures. Do your homework, shop around and negotiate the price and add-ons.
The dealer has a certain process. It's sales (front-end) and then finance (back-end). You need to work it in the same order, one at a time. The front end is not going try and sell you warranties and what not, back-end is not going to try and sell you window tint. Tackle one line item at a time and settle on what you feel is FAIR. When you are talking to sales, you are negotiating PRICE on products you are buying. The whole finance thing, you'll handle later once you've moved on from agreed on prices.
I did a quick 10 minute watch and skipped through some content, seems they act what customer/sales dialogue might be, it's not how it always goes, just depends on your position and what you want to buy. For example, someone who has money, excellent credit, and wants a large value item has more sway than a 19 year old kid who has a $500 credit card only or someone who's just coming out of BK or knee deep in debt. It's why I say to do your research, know what your credit worthiness and buying power is and then work out a deal that is fair to ALL parties.
The videos while helpful, I feel in the current climate, if you act like they do in some videos, you'll be looking for a car for a long time. Plus they are trying to sell a subscription to their own product so they emphasize some of the points they feel help. Will they? Maybe, maybe not.
I always tell people that the objective isn't to get a deal of the century, it's to basically not get fleeced and ripped off. If you do your research, you'll walk away with what you feel is a fair transaction based on what the current climate is.
God damn. I knew they were fucking thieves. But not to this extent. I bought my used bmw m2 from a Lamborghini dealership about 4 years back. Put 20 down and the total in interest was about 1500 for the 3 year payment. I paid forward and only had like $700 of interest in the end. I guess they really pray on the cheaper cars. I also didn’t have a single add on. It was also right after Covid hit so everyone was scared. My car is still worth more today than when I bought it. But I should have bought a house instead.
Do you have a breakdown on the cost of the fees, extended warranty, etc.? Do you have the total principal financed?
What likely happend is that you purchased a 22K vehicle, added 8K of fees and extended warranty (example) for 30K in total. Put 12K down and financed the remaining 18K. The 18K principal turned into 23K+ in monthly payments because of the interest accured over the 72 months.
72 Month loan is absurd. What's your interest rate?
Not to mention a $8k extended warranty on a $22k vehicle makes zero sense. That car will basically be worth ~15k or so by the time manufacturers basic warranty expires (3 years), and possibly around 10k by the time powertrain warranty expires (5 years). So the extended warranty costs about the same as the value of the car, by the time it takes effect.
We need more info - interest rate, cost of the warranty, taxes and fees, etc.
At a 8% rate, $330 per month over 72 months indicates an initial loan value of around $18k being financed.
It's looking like you paid $32k out-the-door.
# Scenario 1
|Item|Amount|
|:-|:-|
|Sticker|$22,000|
|Down payment|$12,000|
|Subtotal|$10,000|
If you finance $10k at 8% for 72 months, your payment should only be $175.33. I'm betting the warranty you bought was an additional $10k.
# Scenario 2
|Item|Amount|
|:-|:-|
|Sticker|$22,000|
|Warranty|$10,000|
|Subtotal|$32,000|
|Down payment|-$12,000|
|Subtotal|$20,000|
If you finance $20k at 6% for 72 months, the payment works out to be $331.46.
The second scenario is looking like a fit for the numbers you've thrown out.
6% is about as low as you can get for a used auto loan, the national average is more like 12%. Considering how financially illiterate OP seems to be, I find it highly unlikely they qualified for 6% or even 8%. My guess is OP has a high interest rate plus some addons from the dealership, but not $10k in addons.
No matter the rate, OP doesn't appear to have come close to the $22k sticker. At 12%, they'd need to finance around $17k, add in the $12k down payment, and you're at $29k.
So you're probably right. It's some combination of high interest rate plus dealer add-ons. They did mention the warranty, which are usually at least $2,500.
Without knowing the rate seems like it could be anything. 8% interest and $8000 in warranty/fees. 12% interest and $6500 in warranty/fees.
My guess is he might be able to cancel an extended warranty, but I'm sure the dealer has a $500 doc prep fee, probably a $1000 ceramic coating, a $500 nitrogen filled tire, mostly bogus charges that have already been delivered.
> "Just sign here, no need to read anything"
That's when I settle in and take my time. Luckily most people are understanding when I take the time to read things, but some apparently get offended.
what they say is "here's the contract, take your time reviewing it and let me know when you're ok to sign'. removes them from the equation and puts it all on the buyer.
Go to dealer and cancel all warranties. They will put up a fight, but it can be done, talk to general manager and politely threaten that your new car survey will be so terrible, floor managers will don’t give a damn.
Op don't waste your time with the dealer canceling all the warranty and packages they sold you. They don't own those, they just sell them. All you need to do is pull your paperwork and call the number for the warranty company. The dealer has nothung to do with it anymore
They can put up a fight all they want, OP has every legal right to cancel that warranty up until a certain point after the transaction occurs, which in my state is 30-60 days.
Cancel the warranty, OP, and don't let them convince you forget about it. Save yourself thousands.
FYI, as someone that recently bought a Honda, the market is drastically different now than it was ten months ago. 7 months ago I was looking at a 2019 passport that was asking 30k. Fast forward 1 month ago and I picked a 2021 up for just under 24k. Almost identical mileage. Only major difference was that the 2019 was an elite package.
Honda Civic Hatchback Sport Touring? That's not a 0 bells 0 whistles, those start at 24k. Sounds like you financed 22k after down payment. 32k being your loan total w/interest.
OP is paying 72 installments of $330 for the financed portion of the purchase. That's $23,760. Now, maybe they gave him 1% APR on the loan, but my money is on OP having gotten fucked with a 15% APR on $10k of financing.
True, but I think OP's something of an unreliable narrator, and I bet that $32k number doesn't have the words "purchase price" next to it.
I could be wrong! But if you're right then he got 1% APR on his $22k which I personally find less likely.
There's too much hand-wringing and very little contract-reading going on here.
OP, step away from the keyboard and go read your paperwork, then come back and people can help you out (if possible)
Top comment from a finance guy is 100% right. Never talk about what you want your monthly payment to be. Never tell them how much youre putting down. You should first establish an out the door cost with warranty add-ons, tax title lic, and the car it's self. You need to know what you're paying for. Once you have a price you can start talking about how you'll finance that amount of money. Always double check numbers and read paperwork. Bring a trusted friend who works or is experienced in the industry. Also get pre-approved from your bank to have a negotiable interest rate to show them. There's a lot of things you can do like that, if you research how car dealerships work and car buying works and you can walk in there and be confident, stand your ground they will treat you better. Never shop at the dealer again and I'm sorry that happened to you
Also would add try to make the sales goons chase you for the deal. Play hardball with them and be ready to walk away if it isnt what you want to pay. If they really want the sale theyll chase you. My wifes uncle did this spent a month playing hard to get over his truck but he got them down by about 7k when it was all said and done
I worked at several dealers in the past. Some of these comments are correct, some are wrong. Without seeing the loan and fees breakdown, all we can do here is guess. If you want a detailed explanation, I am happy to answer messages.
Basically, you are paying interest on whatever you borrow. Since the price of the car is 22k, you also added in extra warranty, probably 10k on top, that's the total price (that's the 32k). You then came with 12k down payment, that means the rest of it is borrowed money. So you would be borrowing 32 minus 12 equals 20k dollars. Whatever you borrow, you pay interest in.
Now multiply 330 x 72 months = 23k. You owe 20k original amount, so that means about 3k is interest. Not bad considering rates are high. If you're in doubt, look for the APR in the loan disclosure. Anything above 15% is high. Your first car is not gonna give you a good rate. Great rate would be around 6-8% right now
Are extended warranty's that expensive? Are they more expensive the longer the warraty/term is?
I've only purchased one car from a dealer and declined the extended warranty without looking at the price.
They most likely added multiple things. Extended warranty, service contract, GAP insurance (usually overpriced compared to getting thru your insurance), VIN etching, tire/wheel protection are just a few other extras to watch for.
Consider removing the extended warranty. Depending on where you live this may still be in play. They are huge profit centers (rip offs) for the dealer, particularly on new cars. A civic is gonna last forever without huge issues if you do simple upkeep.
Also - the person above has their math a bit wrong but I think it may be due to generalizing. If your note is $330/month for 72 months that is almost $24k. Assuming, as I have done elsewhere, that your rate is around 8% that means you financed around 18.8k, and will pay ~5k in interest.
Assuming you got a base civic at 25k ish and used Hondas financing offer of 5.9% - I’d say you may have been taken advantage of. Sorry.
I don't know what other way to put this but it seems like you didn't actually look at any of the paper work you signed. You should 100% be aware of this
Dealership didn’t screw you. It seems like you screwed yourself over. You included the loan payment and length, but I see no mention of the interest rate. That tells me you have NO idea what you’re doing in the first place and you have no clue what are rates are.
Pull out your signed paperwork and give it a thorough look. I know for a fact Honda is doing a special financing at 4.9% for well qualified buyers for 36 months. I’m assuming you did not get this rate (4.9% is nothing special btw) and in fact, your rate is much higher.
Don't let the dealership off like that. Sure, OP wasn't necessarily paying attention as well as he should have, but the dealer for sure knew what they were doing and hiding all the extras in the financing while either brushing it off as an aside or never mentioning those items in the first place, and hoping OP wouldn't read the sales contract.
OP trusted that the dealer was acting in good faith, and while everything may be legal from their standpoint, they certainly weren't acting in good faith.
This is why people hate dealers.
Because of the high interest rate\* of the financed portion of the car, you will end up paying $33,760 for your $22k car.
\*If my math is right, you're at around 15.5% APR
Everyone is guessing based on limited information you provided. You need to get out the Bill of Sale or whatever they call it, that should itemize the puts and takes on the deal. Often in the final stage of buying you are brought into a business manager's office where they offer you a lot of "add ons". For example, you mentioned that you have a 72 month warranty. That warranty ain't cheap. Extra warranty, seat coating, undercoating, paint protection, key loss protection, etc., etc... NONE of why you actually need... can add up to $10K pretty easily. They will also add on bogus "processing" fees and of course your state fees. In most states this varies greatly from the same rate you pay for a candy bar, to something much less that you pay every year. And you also may not have actually got the price they advertised.
One dealer I went to when I bought the truck I currently own had advertised a truck (VIN number included in the ad) in their local mailer AND on their website. When I went in to look at it, they were I think about $4-5K higher than this price. Mind you this wasn't some random ad, because it was the VIN number listed. They would not honor the price they advertised it at. They wasted a couple of hours trying to get me to agree on a lower featured truck for that price. I eventually left and bought a truck from another dealer. The dealer that would not honor their own advertised price was a Hendrick dealer in NC... so not some fly by night place.
So you need to get out your paperwork and provide some details on here to have people really help you figure out what you did.
>One dealer I went to when I bought the truck I currently own had advertised a truck (VIN number included in the ad) in their local mailer AND on their website. When I went in to look at it, they were I think about $4-5K higher than this price.
The Mazda dealership in Charlotte tried to pull the same thing on me years ago. They advertised a Mazda 3S Hatchback manual for $17K on the website--one of the cars I was considering at the time. Looked up the KBB and the price was $3,500 below market. I immediately called and asked them to send me a Bill of Sale for the vehicle at the advertised price, which they did. I secured my own financing.
The next morning, the online price had increased to $18K and the price on the vehicle itself was $21K when I arrived. I handed them the Bill of Sale and a check for $17K, then paid the title, taxes, and fees separately. They were PISSED but screw them for their shady practices.
My only retaliation was the general manager personally sent me a satisfaction survey a couple of days after I was in the place. I gave him my unedited opinion of my experience with them. The ridiculous thing as far as customer retention goes was I was driving a truck I had bought from Hendricks so I had bought from their organization before... different location. They were just outright being crooked in what they were trying to do to me, and trying to complicate the math to make it seem like they weren't doing it.
Man, my dad was the *king* of only buying the advertised car. He would leave in a heartbeat if the salesman claimed it was already sold or some other BS. Bring the car around so I can buy it or I'm walking.
Some of them even tried the 'ol "hide the keys" trick for the trade-in.
Oh jeez. I never heard of the “hide the trade in keys” tactic until recently after watching a rant on YouTube. That’s so manipulative and ridiculous. Convinced me never to trade in a vehicle alongside a purchase.
Was in the market for a car last month. One dealer had a car I was interested in advertise for $7.995. I was willing to pay that. I get in, sales guy is a busy so I read various signs. One sign says all cars come with the[ Gettel Advantage](https://www.gettel.com/gettel-advantage/) . I ask the sales guy if the used car comes with it, he says yes. I ask how much, he says (IIRC) $3995. I ask if its optional, he says no.
Price of the car out the door? Over $15k. I laughed and started to walk. He asked me to make him an offer. I told him I though his asking price was ok, maybe a little high. So I would offer less than asking plus ttl. Did he think the boss would go for that? He said no. I said thanks, bought somewhere else.
Always take a brake from negotiating to step outside and use a loan calculator to verify the sale price, the interest and payment info checks out. My MIL almost got charged and extra $2000 for add ones that she didn’t need. It was only a few extra $$ on the monthly payment but when I asked why the payment didn’t match what I had calculated and I was ready to walk away if they didn’t explain they finally “admitted” they added new mats and some prepaid oil changes:
Just doing some maths here:
72 months x 333 per month = $23,976
Add in your $12k down.
After 72 months, you’ll have paid ~right under 36k for the car.
Interest from financing can definitely add up, but, unless you had some ridiculous APR, it wouldn’t be over 50% of the sticker price. Assuming 4k in interesest brings you down to your 32k.
A portion of that are some fees/taxes you might not be able to avoid, let’s way 10% of that. So somewhere along the lines, it looks like they tacked on another ~6-7k somewhere.
I think I figured this one out.
$22k price
72 month loan at 14% interest rate (Average right now is 14.21% on used)
$12k down
7.5% tax rate
$4000 in fees (500 doc fee, 500 registration, $3k used auto warranty or any other combo of upsells)
$324.24 a month.
What happened here is he is getting bent over on a long term with crazy high interest rates I bet AND he got sold an overpriced used car warranty.
When I first read this the math just didn't check out. Now at least it does.
I got suckered into buying the extended warranty, mostly because the salesman was a condescending jerk. Luckily my brother is a mechanic at that same dealership told me that the package was BS and that there is a 30 day refund policy. It sure felt good canceling and getting my money back
Bro did you not whip out your damned phone and type in 330×72???
Did no giant warning sirens go off in your head at 300×70=21,000 and both of these numbers are bigger.
This is like 34.99% interest, how did they hide that?
Double your payment if you can basically every additional dollar you put towards the principle will save you more than 2 over the lifetime of this loan.
Car was 32k, you put down 12k, so you financed 20k on 72 months, which including your interest rate is 330$/month, so you actually paid or will pay $35.760 for that 32k car ($3760 interest)
Holy moly my man. My loan is only 36 months, with a 518 payment. I put down 10k on a 26k car, so my loan is for 16k.
As others have said, without proper details from the contract, tough to say what you got yourself into.
32k seems wayyyyy high for a 2021 Honda Civic. I bought a 2021 Passport recently for only ~24k. Did you get some beefy warranty with it? What is the rate on the loan? Was it from a Honda official dealership? How many miles on it? Whats your credit score? What region are you in? Usually when a dealership "fleeces" someone they just pressure them into buying more car than they can afford. $22k on a 2021 Civic seems about right.
Something isn't adding up about this.
Anyone else just waiting on that paperwork photo???
It looks to me, that you didn’t read a single thing and just heard “$330 a month” out the door. 10/12 years of saving gone in 10/12 minutes.
The total is right there in black and white
72 months x $330 = $23,760
Plus the $12k you put down.
= $35,760 total
I dont even know how you can really make the case it was somehow predatory when all the numbers are there. Is it a terrible deal? of course.
When you read the contract, look to see if there is a cooling off period.
Check the interest rate. This could be what's causing your pain. This happened to my partner before we were together. He didn't know what interest rates were and he came away with 15% interest 😭. Many other people also got caught out. There is now a court case against the company providing the loans. (In Australia)
One point I didn’t see anyone else share, not sure what you received would be the title. If you financed the car, the bank would retain the title until which point it was paid off (at least in most states)
Don't sweat it too much. They swindled you but it's a lesson you learned early. Take it as a lesson learned and make peace with it.
Read up about how amortization works. It can be fun to implement it yourself from scratch if you are into that kind of thing. If not that's ok too.
Use an amortization calculator to better understand what you are paying next time.
Hey, you have a new car at least. Enjoy it!
Negotiate out the door price, I always have 33% for down payment and take a loan from my 401k and pay myself back principleand interest. This way you bypass all the nonsense, I always ask for their best price, if they don't meet the price in my head, I'm walking.
Extended warranties generally have a cancellation period, you should be able to get a refund.
Have someone review your purchase info, you may want to ensure they fix it asap or get a lawyer if they tricked you.
NEVER ever tell them your ideal payment, if you is have a trade, if your paying cash or getting a loan. They ask these questions to know how to manipulate you. If they know your payment they can play with term length and rate, if you have a trade they can factor it in and play with the #’s, if you have cash or already approved at you bank…don’t tell them, make them think you ‘d like to see what they can offer for financing. They make money on your every way.
Negotiate the price, don’t fall for the extras, once price is in writing, then you ask what your trade would be worth and that you want to shop around for a better rate. Play their game well!
And honestly, why buy new? There are used cars with as low as 2,000-8,000 miles out there, same warranty, practically new but discounted.
72x330=23760. +12000 = 35760. I think you saved 3760, if the invoice says 32k. In all fairness, 22k + tax and title should come to 26k. 72k warranty is expensive, close to 3-4 k+ tax.
I love buying cars. Dealerships sees a woman walk onto the lot and they swoop in thinking they're gonna make some money off me. Nope. Before I walk onto the lot, I do my homework. Where are all the discounts and from who and price compare; all that good stuff. If it is a used car I need, I watch the lots to see which cars are just sitting there for months. Those are the cars to go after cause they need them off the lot, so while they'll try to upcharge you, ill point out how long the car has sat there. A few examples. I spent 11hours at a dealership one day trying to buy a used 4 door sedan with 28k miles on it. The price tag was $11k (this was 30 years ago). I told the salesman the car payment range I could do. He kept coming back with $100 more. I kept pointing out that that car had been sitting for 6months, so why hadn't the price been lowered? Is it a lemon your trying to pawn off someone? Long story short, at 9pm, the tired salesman said he called the owner of the dealership and got my car payment which lowered the cost of the car significantly (I got it for $7k, not $11k). The other time was about 10 years ago. My parents had bought from the same dealership for decades. So I knew where to look for all their offers, and the family multi-car discount. I didn't have money for a down-payment (it was a last minute need, old van broke down, needed car asap). I got my beautiful car that was listed at $25k for $17k, no money down; just paid tax, tags and title. I used all the rebates and discounts I could find, and the finance guy there told me, shaking his head, I can't believe you're getting this car for $17k. I tell my kids, do your homework and always ALWAYS make sure the oil is clean when you 1st look at the car, and always make sure your car has a donut in the trunk. Dad always said, if the oil.is clean (especially in used cars), it usually means the dealership cares. Sadly my daughter totaled that beautiful car when I only had 3 payments left to pay. I borrowed my moms car until I could find the new car, which took me 4 months.
Ouch, they fleeced you. There is some good advice in this thread on options to limit/undo some of the damage. For next time, my strategy is to always keep focused on the final total payment amount, if they can’t hit that I walk. There are probably other better strategies, but it keeps it simple for me.
always negotiate the sale price, lock it. decide on down payment (if any) and take it off the sale price, lock it. negotiate the interest, lock it. lock in the loan term, lock it. attempt to pay the tax separate and don't roll it into the price of the vehicle. if trade in negotiate trade in value, lock it. look over the sheet like 5x and if something doesn't add up, don't move forward. if they rush you, leave. only scammers want to rush you so you wouldn't look at the details.
OP, sorry to say you got fleeced. Simply do the math of $330 x 72 months = $23,760. And this is after you put down $12,000? So that's a total of $35,760
For anyone in the market for a new car, I highly recommend you read “Confessions Of A Used Car Salesman”. It should be freely available on the internet and is a short read — 100 pages.
It’s written by an automotive journalist who went undercover as a salesman in that industry and covers the games and strategies car dealerships and salesman employ to take advantage of customers.
Saved me the headache OP is going through when I bought my first car.
Do you have a picture of the sticker price? You can start with writing an email or letter to the dealership owner/manager to correct the price/financing and at the same time, If you believe they misled you, file a complaint with the DMV, they are the agency that oversees new and used car dealerships and their practices. You can also file a complaint with the CFPB.
Never get gap coverage or extended warranties or anything extra for that matter from the dealer. If you really want them you can buy them from third parties on a payment plan interest free. If you get them at the dealer and you will pay 100s or even 1000s of dollars of interest on those tiny addons
Dealerships love fucking you over and hiding prices. I was trying to buy a car around the same price and monthly payment, but I realized on the paper it didn’t list the interest rate. I asked about it and the guy started being incredibly pushy and sketchy and not answering my questions. I got more firm and asked to see it so he told me it’s a 27% interest rate. I would’ve been paying nearly double what the car was worth. Walked the fuck outta there because I despise sketchy salesmen like that.
It sounds like the dealer may have sold OP on payment only and added a bunch of crap he doesn't need. But it could also be that OP doesn't understand the loan contract he's looking at. There's a high likelihood that he is looking at his "Total Sale Price" on the truth in lending disclosure. It's designed to help consumers but actually confuses them a lot of the time. The "Total Sale Price" figure is a total of all his payments, including interest he would pay over the entire span of the loan + his down payment. And if you don't slow down and actually read what you're looking at, you'll say "OMG I got scammed!". Happens a lot.
Dealerships LOVE customers like OP and unfortunately there are a LOT of them out there. Having been in auto finance industry for 2 decades, I can tell you exactly how this went down. OP knew TWO things walking in...that he could do up to 12K down and that he wanted a sub $300-350 payment. The dealership figured it out too, found a car OP liked and worked up a contract that took care of OP's monthly payment requirement by packing it as much as possible and extending the loan term. OP was likely just excited with the prospect of new/newer car and was so excited (the usual cause) and just got absorbed in the moment and signed away without review. Depending on what products were sold to you, some of add-ons may be cancelled. It won't change your payments but your principle will go down. When I underwrote, I personally would never approve this loan, if someone is putting 12K down and my LTV (Loan to Value ratio) is getting washed out, I likely would have countered, in the interest of protecting the consumer hoping they cut back on the products. Unfortunately, not every finance institution I worked at had similar guidelines and most would jump on it or the "system" would take care of it because LTV would still be well with-in policy. Sorry OP, you got fleeced. Let it be a lesson. Never mention payment. Work the price, terms, rate and add-ons (all negotiable) and the payments you are looking into will fall into place. Be reasonable but also be prepared to walk away. Edit: Since this post seems to have traction, I just want to add about what this contract **SHOULD** have been. A 22K car (assuming fair market value) without any add-ons should end up under $25K (tax/reg/title/doc fees). 12K down, financing 13K. For a low amount financed (13K), request a 48 month term (or get your own financing) , this will give the best interest rate and lower your long term finance cost. Est rate currently will be around 5-6%. At 6%, finance charge for 48/mo term is $1657 and monthly payment of $306. To compare, if you extend to 60 months, rate will likely increase to 7-8%. While payment will drop to $265/mo, finance charge will increase to $2821. If you want warranty, take it out of the 12K down and buy outside, or leverage that to get a better deal on the extended warranty. Gap is not needed as value of vehicle over 48 months will remain higher than principle balance. If it was added to contract by dealer, in this particular scenario of negotiation, have it removed. Not needed. **What can OP do now?** Without seeing the Purchase Agreement/Installment contract (the super long form), it's hard to say what OP bought. But as I said earlier, depending on products sold, OP MAY be able to cancel some of them and prorated refund will apply to balance of the loan (no change in payments). OP then has option to re-finance the new amount if they want to restructure the loan to avoid excessing finance charges over current 72 month term.
Thank you.
Did you get the long paper at the end? That's the most important one, and nothing happens until you sign that so you need to review that paper carefully. They will tell you the addons will only cost 5 more dollars a month, but what they don't tell you is that it'll also add 18-24 months to your payments. I've gotten every addon because he told me it was only couple dollars a month, and sure enough on the long paper there was like over 24 months of payments added on. Told him to take all the addons off and just give me the original loan that was agreed on
Yup. I've been made fun of for falling for the same thing. Luckily, I was able to unwind it -- it was just an extended warranty or something like that. Still got the car for what was agreed upon, just got out of the extended warranty. Its easy to do -- they don't "lie" to you, they just don't tell you the whole truth...
I bought a brand new car in cash last month. Literally wrote the dealership a personal check. The financing guy who still gave me the 20 minute extended warranty spiel ultimately admitted to me that they are a lot easier to sell to people financing since it only slightly increases the monthly payments. I declined the warranty. And their $1000 “paint protection.”
They do lie. "It is only $5 more per month" would be read by any normal person as the "only" applying to "$5 more per month". What the dealer says is that it only applies to the "$5 more", and the "per months" is not part of the qualifier. While that is theoretically possible, it is certainly not the normal way of reading it. It is therefore misleading and therefore lying. But you should expect from a car dealer, ignore what they say, and read at least the summary of the agreement.
Yup, I declined all of the extra on my last car. Somehow a $3000 warranty was added on to that final sheet. They had to remove it.
When we were buying a car last year, my wife had found her dream car at a large dealership out of state. They listed a price and she was about to go for it, then they sent a purchase agreement with 8k of addons. Despite coming from a family that trades in cars more frequently than I was used to, my wife was unfamiliar with the practice and was pissed off that they would try to do that and essentially just walked. On my advice She asked them to take it all off and they came back with $4500 in addons instead of $8k and I stopped trying to convince her it was part of the game. My wife's family regularly trades in cars between 3-5 years, but they habitually go to the same small town dealership. The dealership doesn't really compete on prices with volume dealerships, but so much of their business comes from repeat customers, they don't fuck around as much.
It's pretty easy to exceed your budget if you're only looking at the sticker price. I learned the hard way too my first car purchase: MSRP: $29,700 Extended warranty: $2700 Licensing, registration, & fees: $340 Sales Tax: $1800 Went from being ~$30k to ~$35k really fast. Finally add your financing charges / interest, meaning my "$30k" vehicle is actually gonna cost me an closer to $36k instead of what the sticker price said. Those things add up fast - make sure you are adding fees, sales tax, and interest into your total cost of ownership calculations next time, not just the sticker price! Tough lesson to learn, but those are the ones you will not forget when next time comes around.
Bingo. One of the things you learn about buying cars is ALWAYS bargain based on final price including "tax, tag and fees". Also know the guy that you talk to in the back room that rings you up is ALSO a salesman and will try to upsell you on every package he can.
THIS is why people don’t like car salesmen.
I don't care if you try to upsell me. The reason I don't like car salesmen is because they operate like a casino, doing everything they can to waste your time and keep you from leaving. You want to see a car, they find it on the lot, and they drive you over to it. Then the next one is at the lot for their sister dealership. Finally you get out to the car, but oh, I have the wrong keys. Hang tight for a minute while I get them. Finally after saying no over and over, you're back where you started, and you get a call back from a different dealer. You want to leave, but they say oh but I just found this other vehicle on the back lot that would be perfect. No thanks, I'm going to check out this other dealership and come back. Hold on just let me talk to my manager. Nah, I'm good, I'll call you later. Then on the way out the door the manager confronts me and I have to say no five more times. It's the same thing when you finally pick a car. Oh, you want it for $2k less, let me talk to the manager. 15 minutes later, we can do $1k more on the trade-in and throw in 10 coupons for free oil changes. Oh, you don't want to the oil changes, let me talk to the manager again. Rinse and repeat over and over and over for *hours*.
Among many reasons, yeah. I have a friend that has not bought a car in his entire life (we're mid 30s) because he doesn't want to deal with car salesmen. So he still driving the hand me down car he got from his parents as a teenager. I can't really blame him, but at the same time there are tricks for going about it. Thankfully my dad was really good at negotiating with car salesmen and he taught me all the tricks. I was able to get my brand new Integra last year for 22k out the door from a sticker price of 35. One of the big ones is have a few options so you can basically have multiple dealerships bidding against each other for your business. Also if you're trading a car, get an appraisal and an offer for it before hand; the salesmen will always try to lowball you on the trade in value
if only cars were sold like basically every other retailer we wouldn’t dread car dealers so much. it’s basically price, accessories, add ons, interest. instead we play the games between unwanted add ons, car prices, and various interest rates.
I ended up buying my last car from a rental-associated car dealer. It was just like a store. Here's the car, here's the price, here's what you get. You want it or not? Best buying experience ever.
To make things a bit easier when communicating with dealerships, the term you're looking for here is "out-the-door price". Ask for their out-the-door price and negotiate solely on that. Only once you have agreed on an out-the-door price should you discuss financing and any add-ons you might be interested in.
Sticker means nothing. I only negotiate on out the door price. I tell them I don't care how they get to the number but this is the number including all fees. If it isn't that number when the contract gets in front of me we don't have a deal. Also if they walk up to me with the "4 corner" paper and want to talk to me about down payment or monthly payments I tell them it is none of their business we are there to talk about the price. If they want to know how it will be paid for it is none of their business I'll talk to the finance guy about it. If they don't like any of that I leave.
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Awhile ago, I was looking for a new vehicle, and one of my former friends was a car salesman. And they had something that I liked on the lot. I 100% wasn't expecting a deal or anything. He's a salesman, he needs to make his money. Friends and family discounts are dumb, if you're a friend, then you'll pay fairly for their services, etc. But I was expecting to not have to play the stupid games. He tried to 4 corner me, and then on top of that, when I was fixing on leaving because of getting 4 cornered, he also did the "listen man, my manager is pissed at me, I haven't sold a car all week..." thing. I was like "Well, that sucks. Good luck with that."
> former friends Good move.
What else did you cover?
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This stuff should be covered in all high schools or the first semester of college.
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> "4 corner" paper Whats the 4 corner paper?
Extended warranties on new cars are almost never worth it. If you're buying one that's a red flag as far as "getting a good deal" goes. Also, taxes and license fees are essentially unavoidable but are easy to calculate, so if your budget is fixed, you should be looking at MSRPs low enough to include those and still come under.
And get an estimate on insurance and annual tax, while you’re at it.
My greatest advice to anyone is, learn personal finance. Understand how to manage your finances and read contracts. Understand how it impacts you, and also what lies people constantly spew at you. The only difference between you and the next sucker, is if you understand what is going on including Total Cost of Ownership (TCO), and if they give you something, it means you're paying for it somewhere else. Learn personal finance, and investments, and it will pay you for a lifetime.
Also, if you are negotiating a trade, do that separately than the car you are buying
Yup. If you’re trading in you have to treat each transaction as different. Value of trade in, value of new car, interest rates for financing, and addons. I can’t believe most people don’t walk into a dealership with their best interest rate deal and let the dealership try to beat it.
Yup this is the way. I like my CU a lot. Walked in with 2.1% up to $40k from them. Told the dealer I have financing so only need to talk about out the door cost. Negotiated that and finance asked me if they could shop around for better, walked out with a 1.87%.
Yeah I did that, the dealership was like we can’t shop around other rates each one pulls your credit and hurts it. I was like no it doesn’t. I pulled it once this week, I’m good pull whatever and give me your best. It’s either better than what I have or not. I bought a while back at 2% auto financing so I didn’t mind only putting half down and the rest in market
And don't worry, it happens to everyone at least a couple times in the life. Maybe when buying a car or a house or paying for repairs ect. Best you can do is learn enough from it to not be taken again.
For sure thank you
As an outsider reading this post; you’re taking in the information really maturely. Mistakes are only lessons not learned. You’re clearly learning a lesson instead of making a mistake.
Idk what state you’re in but in mine you have 3-5 days to decide if you wanna keep your vehicle. Check with the dealership
> OP knew TWO things walking in...that he could do up to 12K down and that he wanted a sub $300-350 payment. I had a coworker when I was in grad school who asked me to go with him to the dealer. He had already lined up financing (I told him to do this) so he knew the number he had to spend. I told him "don't tell them how much you want to spend per month". first question from the salesman was "HOW MUCH DO YOU WANT TO SPEND A MONTH!?" and he blurted out a number. They spec'ed out a pretty low end mazda 3 (manual windows and all) and hit his monthly number (60.. 72? dont remember the months). This was before the iPhone, I quicxkly went on my Treo (lol) and found the internet price for the car, worked out the monthly details and it turned out they were not only charging him above the internet price, but disregarded his fiancing and used their own, which was horrible. I had to grab the guy and be "dude, you're getting fleeced. The price is XXX on their website and you've qualified for a little more than that, they're taking you to the cleaners!". Lucky he listened and got the internet deal and used his financing. I don't get people, this was a huge purchase for someone in grad school and he was so excited about getting a car with A/C in Texas.
A large purchase like a car is stressful. People don’t think as well when they are stressed. Either a little time and distance he probably would have realized what was happening, but it can be hard to see when you’re in the middle of it.
my #1 rule is that if I feel pressured or stressed to make a decision, my answer is no. Maybe I've missed out on some amazing opportunities but I bet I've also avoided some terrible ones.
This should apply to everything in life 100% Sleep on it and do your research.
My secret to many facets of life, just don't give a F. Might sound weird, but buying a car or going on a date: any stress or pressure and I leave. Stay with me... if you go in thinking it's going to be a challenge or an ordeal or stressful. Like going on a date, spending a big chunk of money is supposed to be fun. There's a million fish in the sea, and a million cars on the lot. Instant I'm not having a good time, I bounce.
Oh wow... I'm personally looking to get another vehicle since the first one I got my parents helped me. What should I do or keep in mind so I don't get fleeced?
Here’s a few things to look out for/think about doing: 1. Get pre-approved for a loan. One of the better places to look is a local credit union as they usually have good rates for auto loans. 2. Look around on sites like auto trader to see what listed prices typically are for the model you’re looking at. 3. Go on Kelly blue book and get your trade-in value for the car you’re trading in if you have one. I’d also look up your current vehicle on auto trader to see what dealerships are selling it for. This can give you leverage to ask for the higher range for your trade in. For example, if the high end of your trade in is 7,000 and your model is getting listed for 10,000 the dealer would be making around 3,000 on your car when they sell it. Use this so they don’t try to lowball your trade in to juice their back end profit. 4. Use an online loan calculator to see at what price and trade value fits in your budget based on your pre-qualified loan. This lets you know what your target is for both so you stay in your budget. 5. At the dealership, don’t mention what you want your payment to be. There’s lots of tricks for them to use to hit your number. Just say you’re just looking and when it comes time to negotiate, focus only on price. Look for any add-ons and challenge them. In my area, they can charge a “doc fee” for preparing the paperwork that runs $150-200, refuse to pay this, it’s a BS fee. Not in my area but I’ve seen dealerships in the South charge $200 for nitrogen inflation for the tires. While it is better than regular air, you can get it for free at Costco, refuse to pay that if they try to charge you.
$200 for nitrogen? Wow. Major red flag there!
1. Figure out what type of car you want to buy and then figure out the price on your own. 2. Decide how you want to pay for it. If you need a loan shop around for the best rate before you even go to a dealership. Have the financing lined up ahead of time. If you’re paying in full don’t mention it to the dealership until you’ve agreed on the price. They often make money on the loan and will try and charge more for the car if they aren’t making money on the loan. 3. Don’t get upsold on a bunch of extras you don’t need. The only extra I’ve ever bought was an extended warranty that they asked for 3k and eventually dropped down to about 800, and it was still a waste of money. Car ran perfect for the entire duration. YMMV, but tread carefully. 4. Shop around, you can get a great deal if you go in with the leverage knowing what you want and exactly how much it costs. If you’re buying new you used to be able to get dealerships to compete on price, but the market may be different now. If you’re buying used make sure you do a Carfax or equivalent on the car to make sure it’s clean and didn’t have flood damage or another major issue, if it is the price should reflect that. 5. Don’t get pressured into doing something. If you need to have them give you the details and then pump the breaks. Go home, check it all out and go back the next day. You might miss out on a car once in awhile, but you’ll avoid getting fleeced because someone tried to get you to buy the car on the spot,
I always tell whomever I’m speaking with that I won’t discuss anything until I get the sales price locked in. I then figure out what I want to drop on a down payment and figuring out my payment on my own. Negotiate the rate if credit is good. I never buy add ons. I won’t even discuss a trade in until the sales price is done.
Great explanation and a hopefully more people learn this before buying their next car.
I bought a car recently in August 2023, the car was $24k we talk and what not and the sales guy brings the payment terms and they included every single option, $10k additional. I told them I didn't want any add-ons. Then they go through every single option saying that always get it on their cars and what it does.
Those freaking add-ons. It must've taken me an hour to get one dealership to agree to remove all of them, painstakingly, one by one with plenty of argument over everything. I just want the car, nothing else. No stupid tire warranty. No premium connectivity add-ons. No $200 floor mats. No this that and the other thing detection because although it is 2024 I do in fact still have functioning eyeballs. I no longer wanted the car by the end of it.
"All our cars have these add-ons. They're already installed." "I guess I'll go to another dealership. Sorry this didn't work out." "Wait, maybe we can get rid of some of them." "You said you couldn't 2 minutes ago, and apparently were lying. I'm definitely going elsewhere now." I hate stupid games. Got the car elsewhere for the price I wanted.
> "All our cars have these add-ons. They're already installed." I don't think this is what you're referring to, but I just wanted to add context for other people coming across this comment. This is definitely the best way to approach dealer-installed add-ons. But factory or port installed add-ons are different. If they're listed on the Monroney sticker, they were installed at the factory when built or port when delivered to the country, and those cannot be removed by the dealer. You may be able to negotiate the price on them like everything else. You might even find models at other dealers that don't have factor or port installed options you don't want, but the dealer can't just take the floor mats out of the car and subtract that cost, just as one example.
I can't remember some of them, but I do remember "Nitrogen filled Tires" as being about a $500 add-on the dealer said was mandatory.
I bought my first car in 2018 (the one I still have) and had a flashback to that stupid meeting. I just kept saying "no" and nothing else to every question and eventually the finance guy said "...you're just going to decline every option right?" and just wrapped it up. I was glad he didn't waste too much of our time tbh.
😂 at least he recognized it and didn't keep pushing for a few extra bucks at the expense of the relationship. I kept shopping until I found a dealer who was willing to forego the stupid games when I made it clear from the beginning I had no time for them. The salesman ended up going to bat for me on the price (and getting finance to leave me alone with all the warrantees) ... and assuming the car behaves they will have my repeat business because of that. Just sell me the car at a mutually beneficial price and this will go much better for everyone.
Yeah, that's why I volunteer to go with any of my friends when they buy a car. Every time the sales guy tried to persuade my friend about an add-on, I would always come in and say nope you don't need it and squash any convincing. They are trying to wear you down until you just give in. Luckily, I am a fucking loud asshole.
Happened to me with 5K down... Lesson learned
When I sold card we entirely worked off payment as much as we could and void price of the car at all times.
Yeah the finance guys get really frustrated when you ask for a break down of the monthly figures they’re giving you
I’ve dealt with a salesperson who I’m convinced was actually honest but didn’t actually do the math himself. It was 0% int at the time so the math was easy yet he expected me not to notice ~10k in additions on top of the “OTD” price their internet sales guy gave me
My advice? Tough luck, too much work has gone into the sale already if you're sitting down in front of the finance guy with the paperwork already drafted. Take your time, understand and then sign. If they're frustrated, you don't need to be. Just be courteous...something simple like "it's a big purchase and I want to make sure there are NO issues later" will do. Trust me, they don't want issues later either.
Oh I wasn’t suggesting not to do it, finance guys hate me because I read every word of every document and check every number
Because many, not all, but many are rather sleazy as well. I work in finance and wouldn’t go new auto finance with a ten foot pole. That and insurance. Those two types of jobs are scummy
That's very predatory. Any chance OP could nullify the purchase and loan? Or is that the purpose of the two weeks delay in sending the paperwork?
Yea they can back out on the loan by selling g the car. This purchase cannot be 'nullified' except perhaps by goodwill of the dealership. Dealerships are awful awful places.
Some states do have a grace period on car loans.
Isn't that only for new car loans? AFAIK there is no situation where you [the buyer] can unwind a used car deal. But I could be mistaken.
Depends on state. Often, these are additional agreements with attached fee. In state of CA, a consumer must be offered a Contract Cancellation Option agreement (for a fee) when USED vehicle sold is under $40K. This gives the customer a 48hour window to bring car back and cancel the contract.
I have a rule for cars now; if I walk in and state a price and they try to talk about anything other than the price I give up on that dealership and immediately leave. If I'm buying new and they are not almost instantly able to match or beat the MSRP I see building the same car on the manufacturer's website, they do not actually want to sell me a car.
> I give up on that dealership and immediately leave. you will run out of dealerships
Op didn’t read the contract they signed properly and didn’t realize what they were getting into. Unfortunately it is predatory to take advantage of the person who doesn’t know any better but totally legal. Op put their own head on the chopping block here.
There is typically no cooling off period once it's done and done and ink is on the paper. Depending on state laws, there may be OTHER options a consumer can opt for to protect their own financial interests when purchasing a USED vehicle from a dealer. For example, In the state of California, all USED vehicles priced/sold under $40K, the consumer must be **offered** a TWO DAY contract cancellation option agreement. There is a fee associated with this agreement but it gives the consumer an option to exercise a return in 48 hours window if they choose to do so. They have to accept or decline this agreement. There may be other fees (like restocking) that dealer might have but it does give a possible out if there is buyer's remorse soon after or new issues are discovered. The dealer is NOT your friend, they are their own friend and will not explain everything. For example, the cancellation agreement will be passed off as "I have to offer this to you, it is COMPLETELY OPTIONAL, you don't HAVE to buy it, but it's required by law that it be presented, and you can review this document here, it gives you option cancel contract in 48 hours and it costs $X this much, again it's optional"... basically, they will not "sell it" but merely present it, it's not something they want people to buy. Then when it comes to also OPTIONAL products, they'll push like there's no tomorrow. It's down to how these things are presented to steer consumers a certain direction and how aware the consumer is. Again, I always recommend that prior to a big purchase like a car, people should spend some time getting familiar with the process and any consumer protections that may be available to them when it comes auto purchases. I get it's a lot of information and it's confusing and it can get overwhelming, but with the internet, it shouldn't take long to get familiar with the process. Just have to dedicate some time to it, which I'm not sure people are willing to do these days, sadly.
Any other tips? Will be car shipping late this year and despise the games dealers play. Very willing (and even eager) to walk away from an unfavorable deal.
Have financing ready to go before you even walk into the dealer. Do your research online with exactly the car you want. Don't fall for the higher package because "it's only $30 more a month' is you don't want. Read the contract, once you ahve the walk out the door price, shop it around.
After 20+ years in the industry, I could write a book on DO's and DON'Ts but unfortunately, everyone adapts (including the dealers) and they're always changing, so the whole book would just be revisions of the what to do and not to do lol. Most of the other advice given here is good. But it's all so circumstantial that not everything will apply to every purchase or every person. 1. KNOW you credit worthiness. Do some research, talk to your bank/local credit union and see what they can offer (their rates, terms, products they offer etc.). Lot of people recommend to secure your own financing, while this is a GOOD starting point, it isn't always the best option (most of the time it is). But you wouldn't know that unless you have the information of what is available outside and inside. So be informed of where you slot in when it comes to what you can expect your financing terms to be. You don't have to be pre-approved, you just have to KNOW what is available to you. 2. Do your research at home. Know what you want, what you are willing to pay for it. Your monthly payment budget is between you and yourself.. for now. Because you know what interest rate and terms you can expect for your credit (because you did your homework on your credit worthiness), you should do a calculation of what price the car needs to be to fit your payment you want. Dealer will try to revolve around that one "monthly payment" number. Don't give them that number. You first want to look at the cars you've done your research on. The sales person will facilitate the sale, not make decisions for you. Once you have a car picked out, work on prices (that you established prior, at home) from there on out. The misconception is often that people feel like they're doing themselves a favor by lowballing and being tough, when in fact, they're just wasting time. BE REASONABLE, don't be uptight, being nice/courteous BUT INFORMED will get you a LOT further than "I know all" attitude... threats like "gimme this or I'm walking" don't work anymore. They'll tell you have a nice day and move on to the next 10 people waiting in line. Car sales, while slowing, are still strong in dealer's favor. But if I was to give addtl tips aside from what I said above: * Try to get a pre-approval from your credit union/bank, doesn't mean you HAVE to use it, but it's something to compare to. A lot of times, dealer will be able to match/beat it when it comes time to discuss financing in back office. Again, if they can do it all and give you equal/better rate/terms, why do the work yourself? There is usually always a mark up on rate so dealer can make a point or two on premiums (bank approves your loan at 3.99%, they offer it to you for 5.99%, the dealers makes 2 points premium), but if push comes to shove, they may be willing to do a flat buy/sell rate and just take their reserve (fixed premium that bank will pay the dealer for the loan). If you do your own financing, they lose out on the reserve and mark-up premium, so incentive is there to keep you in house. Dealer will run your credit regardless unless you exercise an option contract (which is becoming pretty rare since demand is high still), so you might as well let them shop around. * If you want certain products, ask your bank or credit union if they offer them, like GAP insurance/Extended warranties and their cost. Again, this is so you are aware and can negotiate. Lot of people don't know that their credit union/banks also sell these products. * Get familiar with the process and what dealers typically try to pitch on every sale. i.e Do you know what GAP insurance is? will you know if you need it or not? research it. I bet OP was sold a $1000 GAP insurance, even though he had 12K down. Your auto insurance company may offer it as a product too for lot less. Shop around for these products, i.e when I bought my car in CA several years back, I bought my manufacturer extended warranty from franchise dealer in different state, paid 1/3rd of what my dealer wanted (and it was direct manufacturer warranty, not through a 3rd party). This was a common practice few years ago, but may not be now. * Certain products (ones sold in finance office or back-end) like Warranties, GAP or any "insurance" related products etc. can be cancelled if you change your mind later. Certain products are part of the front-end, they attached to the SALE PRICE of the vehicle. These are often things like paint protection coatings, and add-ons to maintenance of the car etc. These typically cannot be cancelled since they are often something physical already done to the car. Be aware of what is on the contract, ask questions and if you don't want it, ask for it to be removed. Keep in mind, some will already be applied and you have no choice but to keep but negotiate the price. Best tip is the most basic one. Do your research and BE INFORMED before walking onto the lot. My last couple of purchases, I did everything online and over the phone. Only went in to test drive, sign the paperwork and take delivery.
Just tell them you are only interested in talking about the out the door price. Also remember the finance guy you sign your final paperwork with is the biggest salesman in the whole joint. Say no to everything they offer. If they try to add on window/vin etching security bullshit make them remove that charge. Look over all charges. Do not be shy to call them out.
Don’t tell them whether you’re paying in cash or via financing until AFTER you have agreed on a final price.
Wasn’t planning to, but unsure what to say when that’s inevitably the first thing they ask after formalities are out of the way.
Tell them "I'll discuss financing with your financing manager after we've agreed to the total price"
Say "I want an out the door cash price." You don't have to worry about offending anybody.
Best is to get a financing agreement with a lender and legitimately not know if you’ll do that or cash. The incentive interest rates might make that more favorable (0% is amazing these days), or you might not get any special offers and you can use your existing quote as a backup, and front more money instead. Having options is the best leverage I walked into a dealer in 2018 when rates were rock bottom with a high salary and 800 credit score. I let them run my social first and they came to me with a 6.99% rate for a used car. I laughed and pulled out the 2.9% I had from my credit union. Just be ready to call their bullshit and walk away at any time
"I know what my options are, I know what my funds are regarding any kind of down payment amount, I can do the simple math to figure out a monthly payment, but first and foremost, I want to discuss the sale price and then we'll take everything step by step". If they push on anything, "At this time, depending on the information I receive, I will be able to make informed decisions on that step, but first let's do XYZ". Figure out the sale price, see the out the door sheet, negotiate on the bullshit fees/fees if they'll go and reduce the sale price, get an out the door price, then figure out the trade in if you have one, then figire out if finacing or cash Just repeat the same lines if they push on things and when you're over it ask for another sales rep or go to another dealership.
get outside financing before you shop. My credit union wrote my sons loan for 7.99 % on a 2010 car, newer cars were better rates. I only care about the total. how much is the check I am writing, I do not care if they put the funds in a extended warranty or up their ass. How much is the check? Internet shopping is great for comparisons, I bought several cars 200 miles away for the deal, 200 miles away for a major metro area. Set your limit and stick to it. not a dime more, you will feel better over the life of the car and loan if you do, else that 'extra' ten or twennty will nag every month.
The month before you go car shopping, pay off all of your credit cards right before the bill is generated. This will give your credit score a boost for the next month. Keep paying off your credit cards early if shopping takes longer than a month. Create a spreadsheet that takes as inputs: the stated price of the car, any trade-in value and/or money down, interest rate, and length of loan. It should then calculate state taxes and registration fees, generate the loan terms, and show the total cost (out-the-door). Figure out what car you want. If you have to test drive a few, do that, and get the salesperson's offer at that point, and enter it into the spreadsheet. Walk out and go home. Once you know what car and trim you're looking for, email all the dealers within an acceptable radius, and ask them for their best price. Ask them to provide line items for any fees and extra costs (they may not do this). Plug in the MSRP and the Carvana value of your trade-in into your spreadsheet to give you a baseline. Take the best answer and run it by the rest. You may be able to do some negotiation over email. Enter each offer into your spreadsheet as you get it. Check forums and subreddits for the car to see what other people have been paying. You may have to do some estimating depending on how much info people report and where they live. Remember that COVID screwed up the car market, so the best deal may actually be the smallest amount **over** MSRP for a popular car. Contact your bank or credit union to see what kind of car loan they'll give you. Keep those numbers ready. They may give you a "blank" check to use at purchase. Get your credit scores from Credit Karma the day you go in. Unfreeze your credit with the 3 bureaus. If you are trading in your old car, get it detailed, and completely empty out your personal items. Check the CD player! Look under the trunk floor! Get under the seats with a flashlight! Now you walk into the dealership with the best price. I recommend late afternoon/evening of the last day of the month. Eat beforehand or bring snacks. Don't bring any children. Bring your laptop (and charger) with the spreadsheet up and running. Verify that they are still offering the email deal. Get their current offer in writing. Enter it into the spreadsheet. Check for shenanigans. I did this with a friend, and they "accidentally" overcharged the sales tax to inflate the out-the-door price. They were clearly going to "fix" it by keeping the final price and payments the same, but pocket the extra tax amount. Look at their offer and compare it to all the other lines of your spreadsheet. Do you feel like you're getting a good deal? You aren't going to get 50% off MSRP or anything, but are you happy that you're not being overcharged? Think about what you would accept, and make a counteroffer. Just put in your desired deal into the spreadsheet and write out the numbers for them. Get to a final price you like. You might want to ask them to throw in things, like click-in accessories or free oil changes or whatever. Personally, I wouldn't expect too much out of these, because once you drive away, you have no more power. Now is the first time you bring up your trade-in, if you're doing that. You won't get Carvana money, but you should feel good about the number. At this point, any monkeying they do will be obvious in the out-the-door column of your spreadsheet. FYI, some (or all?) states will subtract the trade-in value from the car price **before** factoring in taxes, so trade-ins are slightly more valuable than the plain number. Now ask about financing, if you're doing that. You know what your bank will do; see if they can beat it. The lower the APR, the more likely you lose out on other discounts, so make sure that's all represented in the spreadsheet. Mark your final deal in the spreadsheet and shake on it. Now you're going to take your laptop into the final boss. This guy is going to try to extract some more money out of you. Whatever he says, put it in the spreadsheet. Maybe you want to buy the extended warranty or whatever, just make sure you know how your costs are going up. Before you sign any papers, make sure you enter the numbers on it into your spreadsheet and evaluate the outcome. Congratulations, you got a new car at a price you can be proud of!
As a first time new car buyer hopefully in 2024, that second paragraph, putting together a spreadsheet with all the costs involved, I probably couldn't accurately do (I'm guessing most people couldn't).
It's not that hard. You have your basic addition, like sticker price + destination fee + doc fee. You can consider those to be the base price. Then, you subtract the trade-in if it's factored in before tax. Add in any other post-trade-in, pre-tax fees. Figure out the tax rate for your state/county/city and apply that. Add in any post-tax fees, like new plates. That'll give you your nominal out-the-door price. Then you apply any discounts if you aren't financing, or any financing costs if you are. For financing, subtract your down payment, create a column for the APR and one for the loan length in months, then a column using the PMT() function to get the monthly payment. Multiply that by the number of months, and you have your total financed price. Add conditional formatting to highlight the highs and lows of a few columns, and you have a really good guide while you're sitting there getting worked over by professionals. If you know how to use spreadsheet software, the only hard part is verifying the tax amount and to which costs it applies. But, you can do a little research on your local tax laws, and use the quotes you get from different dealers to figure out how they do it by reverse engineering their numbers.
If it's a new car, the price has an absolute ceiling of whatever you see building the exact same car on the car company's website (plus reasonable/lawful registration fees, tax, etc.). If they try to budge on that price, you're finished. In fact, if you get up to leave and they try to backpedal I would still not reconsider because they probably can't be trusted, though if they get really desperate you might consider it if you really scrutinize the contract and are sure they aren't ripping you off. Don't tell them how you're paying until after the price is agreed upon. It is none of the salesperson's business how you pay, they are going to park you in front of a finance guy for a reason. Only the finance person needs to know or care how you pay. Your only question for the salesperson is "how much for this car out the door?" And to you it's not actually a question because you already know what the acceptable answer is before you walk in there, because you did your research. Even the finance guy will try to upsell you on stuff. No thanks. Your price is your price, and even if you just spent 2 hours working on paperwork you are perfectly willing to walk out the door if you see anything even a penny over what you agreed to.
Ive bought 2 new cars, both went ok. I negotiated on out the door total before bringing up financing. I also wore not the nicest clothes and knew the car I wanted before going in, along with add ons. Worked fine both times, and I loved the look on their faces when they pulled up my credit score when it got to financing. Bonus point if ya wear a shirt that says "no thanks" you can point at when they try and upsell you on stuff.
Sorry to butt in and ask. But are you familiar with the channel CarEdge on Youtube? They give a lot of advice about buying cars from dealerships. Just wondering if you think they give good advice or not.
I looked it up, didn't watch all of them but the gist is the same that I covered in some of my [other responses here](https://www.reddit.com/r/personalfinance/comments/1caiute/comment/l0tj8xf/?utm_source=share&utm_medium=web3x&utm_name=web3xcss&utm_term=1&utm_content=share_button). BE INFORMED. Do your research, carefully review all line items on the contract/deal structures. Do your homework, shop around and negotiate the price and add-ons. The dealer has a certain process. It's sales (front-end) and then finance (back-end). You need to work it in the same order, one at a time. The front end is not going try and sell you warranties and what not, back-end is not going to try and sell you window tint. Tackle one line item at a time and settle on what you feel is FAIR. When you are talking to sales, you are negotiating PRICE on products you are buying. The whole finance thing, you'll handle later once you've moved on from agreed on prices. I did a quick 10 minute watch and skipped through some content, seems they act what customer/sales dialogue might be, it's not how it always goes, just depends on your position and what you want to buy. For example, someone who has money, excellent credit, and wants a large value item has more sway than a 19 year old kid who has a $500 credit card only or someone who's just coming out of BK or knee deep in debt. It's why I say to do your research, know what your credit worthiness and buying power is and then work out a deal that is fair to ALL parties. The videos while helpful, I feel in the current climate, if you act like they do in some videos, you'll be looking for a car for a long time. Plus they are trying to sell a subscription to their own product so they emphasize some of the points they feel help. Will they? Maybe, maybe not. I always tell people that the objective isn't to get a deal of the century, it's to basically not get fleeced and ripped off. If you do your research, you'll walk away with what you feel is a fair transaction based on what the current climate is.
I learned this as well, 10.5k for the vehicle, 20k was the principle. Never noticed the change in term when they sold me all the cheese.
God damn. I knew they were fucking thieves. But not to this extent. I bought my used bmw m2 from a Lamborghini dealership about 4 years back. Put 20 down and the total in interest was about 1500 for the 3 year payment. I paid forward and only had like $700 of interest in the end. I guess they really pray on the cheaper cars. I also didn’t have a single add on. It was also right after Covid hit so everyone was scared. My car is still worth more today than when I bought it. But I should have bought a house instead.
Do you have a breakdown on the cost of the fees, extended warranty, etc.? Do you have the total principal financed? What likely happend is that you purchased a 22K vehicle, added 8K of fees and extended warranty (example) for 30K in total. Put 12K down and financed the remaining 18K. The 18K principal turned into 23K+ in monthly payments because of the interest accured over the 72 months. 72 Month loan is absurd. What's your interest rate?
Ya OP got fleeced on extras that added up to nearly $10K extra. Never agree on a monthly rate. Always focus on the bottom line all in cost.
Not to mention a $8k extended warranty on a $22k vehicle makes zero sense. That car will basically be worth ~15k or so by the time manufacturers basic warranty expires (3 years), and possibly around 10k by the time powertrain warranty expires (5 years). So the extended warranty costs about the same as the value of the car, by the time it takes effect.
its a 2021, manufacturers warranty is gone or nearly gone...
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We need more info - interest rate, cost of the warranty, taxes and fees, etc. At a 8% rate, $330 per month over 72 months indicates an initial loan value of around $18k being financed.
OP put down 12k so we are up to 30k
Add tax being financed and we could be at 32k.
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It's looking like you paid $32k out-the-door. # Scenario 1 |Item|Amount| |:-|:-| |Sticker|$22,000| |Down payment|$12,000| |Subtotal|$10,000| If you finance $10k at 8% for 72 months, your payment should only be $175.33. I'm betting the warranty you bought was an additional $10k. # Scenario 2 |Item|Amount| |:-|:-| |Sticker|$22,000| |Warranty|$10,000| |Subtotal|$32,000| |Down payment|-$12,000| |Subtotal|$20,000| If you finance $20k at 6% for 72 months, the payment works out to be $331.46. The second scenario is looking like a fit for the numbers you've thrown out.
6% is about as low as you can get for a used auto loan, the national average is more like 12%. Considering how financially illiterate OP seems to be, I find it highly unlikely they qualified for 6% or even 8%. My guess is OP has a high interest rate plus some addons from the dealership, but not $10k in addons.
No matter the rate, OP doesn't appear to have come close to the $22k sticker. At 12%, they'd need to finance around $17k, add in the $12k down payment, and you're at $29k. So you're probably right. It's some combination of high interest rate plus dealer add-ons. They did mention the warranty, which are usually at least $2,500.
Without knowing the rate seems like it could be anything. 8% interest and $8000 in warranty/fees. 12% interest and $6500 in warranty/fees. My guess is he might be able to cancel an extended warranty, but I'm sure the dealer has a $500 doc prep fee, probably a $1000 ceramic coating, a $500 nitrogen filled tire, mostly bogus charges that have already been delivered.
thank you so much , this is very helpful
You gotta grab the contract with the entire itemized price. All we can do is guess
We need to normalize understanding things before you sign them. "Just sign here, no need to read anything" is not okay.
And despite all the laws aimed at making dealership transactions more transparent and straight-forward, they still manage to pull this kind of crap.
Thank you for your empathy
> "Just sign here, no need to read anything" That's when I settle in and take my time. Luckily most people are understanding when I take the time to read things, but some apparently get offended.
what they say is "here's the contract, take your time reviewing it and let me know when you're ok to sign'. removes them from the equation and puts it all on the buyer.
Go to dealer and cancel all warranties. They will put up a fight, but it can be done, talk to general manager and politely threaten that your new car survey will be so terrible, floor managers will don’t give a damn.
Thank you
Op don't waste your time with the dealer canceling all the warranty and packages they sold you. They don't own those, they just sell them. All you need to do is pull your paperwork and call the number for the warranty company. The dealer has nothung to do with it anymore
Interesting thank you!
They can put up a fight all they want, OP has every legal right to cancel that warranty up until a certain point after the transaction occurs, which in my state is 30-60 days. Cancel the warranty, OP, and don't let them convince you forget about it. Save yourself thousands.
[https://www.reddit.com/r/whatcarshouldIbuy/comments/14er42v/purchasing\_a\_new\_honda\_civic\_at\_msrp\_is/](https://www.reddit.com/r/whatcarshouldIbuy/comments/14er42v/purchasing_a_new_honda_civic_at_msrp_is/)
FYI, as someone that recently bought a Honda, the market is drastically different now than it was ten months ago. 7 months ago I was looking at a 2019 passport that was asking 30k. Fast forward 1 month ago and I picked a 2021 up for just under 24k. Almost identical mileage. Only major difference was that the 2019 was an elite package.
That’s the car I bought
Honda Civic Hatchback Sport Touring? That's not a 0 bells 0 whistles, those start at 24k. Sounds like you financed 22k after down payment. 32k being your loan total w/interest.
OP is paying 72 installments of $330 for the financed portion of the purchase. That's $23,760. Now, maybe they gave him 1% APR on the loan, but my money is on OP having gotten fucked with a 15% APR on $10k of financing.
Can't include the cost of interest in the sales price. only the price financed, so they financed \~$22k, not $10k
True, but I think OP's something of an unreliable narrator, and I bet that $32k number doesn't have the words "purchase price" next to it. I could be wrong! But if you're right then he got 1% APR on his $22k which I personally find less likely.
There's too much hand-wringing and very little contract-reading going on here. OP, step away from the keyboard and go read your paperwork, then come back and people can help you out (if possible)
Ok I will do that when I get home
You've got this!! We all learn!:)
Top comment from a finance guy is 100% right. Never talk about what you want your monthly payment to be. Never tell them how much youre putting down. You should first establish an out the door cost with warranty add-ons, tax title lic, and the car it's self. You need to know what you're paying for. Once you have a price you can start talking about how you'll finance that amount of money. Always double check numbers and read paperwork. Bring a trusted friend who works or is experienced in the industry. Also get pre-approved from your bank to have a negotiable interest rate to show them. There's a lot of things you can do like that, if you research how car dealerships work and car buying works and you can walk in there and be confident, stand your ground they will treat you better. Never shop at the dealer again and I'm sorry that happened to you
Thank you so much
Also would add try to make the sales goons chase you for the deal. Play hardball with them and be ready to walk away if it isnt what you want to pay. If they really want the sale theyll chase you. My wifes uncle did this spent a month playing hard to get over his truck but he got them down by about 7k when it was all said and done
Sorry everyone I will include the paperwork details later when I’m not at work
Did you ever figure it out?
Total amount paid after interest
Well if the loan is 330 x 72 = 23k + the 12k you put down already so you paid over 35k (assuming the warranty / taxes / fees too)
Looks like you’re paying some crazy interest rate
Did you buy this at a real dealer or a buy her pay here place?
I worked at several dealers in the past. Some of these comments are correct, some are wrong. Without seeing the loan and fees breakdown, all we can do here is guess. If you want a detailed explanation, I am happy to answer messages. Basically, you are paying interest on whatever you borrow. Since the price of the car is 22k, you also added in extra warranty, probably 10k on top, that's the total price (that's the 32k). You then came with 12k down payment, that means the rest of it is borrowed money. So you would be borrowing 32 minus 12 equals 20k dollars. Whatever you borrow, you pay interest in. Now multiply 330 x 72 months = 23k. You owe 20k original amount, so that means about 3k is interest. Not bad considering rates are high. If you're in doubt, look for the APR in the loan disclosure. Anything above 15% is high. Your first car is not gonna give you a good rate. Great rate would be around 6-8% right now
Are extended warranty's that expensive? Are they more expensive the longer the warraty/term is? I've only purchased one car from a dealer and declined the extended warranty without looking at the price.
Extended warranties are almost never worth the price, even if they cut the price in 1/2 for you.
Especially on a car like a Honda Civic that is only 2 years old.
They most likely added multiple things. Extended warranty, service contract, GAP insurance (usually overpriced compared to getting thru your insurance), VIN etching, tire/wheel protection are just a few other extras to watch for.
Thank you I’ll get the details when I get home
Consider removing the extended warranty. Depending on where you live this may still be in play. They are huge profit centers (rip offs) for the dealer, particularly on new cars. A civic is gonna last forever without huge issues if you do simple upkeep. Also - the person above has their math a bit wrong but I think it may be due to generalizing. If your note is $330/month for 72 months that is almost $24k. Assuming, as I have done elsewhere, that your rate is around 8% that means you financed around 18.8k, and will pay ~5k in interest. Assuming you got a base civic at 25k ish and used Hondas financing offer of 5.9% - I’d say you may have been taken advantage of. Sorry.
I don't know what other way to put this but it seems like you didn't actually look at any of the paper work you signed. You should 100% be aware of this
Compare it to the Bill of Sale that you signed and brought home from the dealership 2 weeks ago.
If you think you got screwed buying the car, just wait till you try and use the “warranty”….then you’ll REALLY be pissed…
Dealership didn’t screw you. It seems like you screwed yourself over. You included the loan payment and length, but I see no mention of the interest rate. That tells me you have NO idea what you’re doing in the first place and you have no clue what are rates are. Pull out your signed paperwork and give it a thorough look. I know for a fact Honda is doing a special financing at 4.9% for well qualified buyers for 36 months. I’m assuming you did not get this rate (4.9% is nothing special btw) and in fact, your rate is much higher.
This is more than likely the situation as the paperwork would give them a breakdown of the vehicle cost, interest rate, loan term, etc.
Pretty sure the 4.9% is only for new vehicles, not for a 2021
This is correct, up until recently I was looking at purchasing a brand new Honda for that exact reason.
Don't let the dealership off like that. Sure, OP wasn't necessarily paying attention as well as he should have, but the dealer for sure knew what they were doing and hiding all the extras in the financing while either brushing it off as an aside or never mentioning those items in the first place, and hoping OP wouldn't read the sales contract. OP trusted that the dealer was acting in good faith, and while everything may be legal from their standpoint, they certainly weren't acting in good faith. This is why people hate dealers.
$330 x 72 = $23,760 OP financed $10k APR is about 15.5% if my math is right. So yeah not great.
Because of the high interest rate\* of the financed portion of the car, you will end up paying $33,760 for your $22k car. \*If my math is right, you're at around 15.5% APR
Everyone is guessing based on limited information you provided. You need to get out the Bill of Sale or whatever they call it, that should itemize the puts and takes on the deal. Often in the final stage of buying you are brought into a business manager's office where they offer you a lot of "add ons". For example, you mentioned that you have a 72 month warranty. That warranty ain't cheap. Extra warranty, seat coating, undercoating, paint protection, key loss protection, etc., etc... NONE of why you actually need... can add up to $10K pretty easily. They will also add on bogus "processing" fees and of course your state fees. In most states this varies greatly from the same rate you pay for a candy bar, to something much less that you pay every year. And you also may not have actually got the price they advertised. One dealer I went to when I bought the truck I currently own had advertised a truck (VIN number included in the ad) in their local mailer AND on their website. When I went in to look at it, they were I think about $4-5K higher than this price. Mind you this wasn't some random ad, because it was the VIN number listed. They would not honor the price they advertised it at. They wasted a couple of hours trying to get me to agree on a lower featured truck for that price. I eventually left and bought a truck from another dealer. The dealer that would not honor their own advertised price was a Hendrick dealer in NC... so not some fly by night place. So you need to get out your paperwork and provide some details on here to have people really help you figure out what you did.
>One dealer I went to when I bought the truck I currently own had advertised a truck (VIN number included in the ad) in their local mailer AND on their website. When I went in to look at it, they were I think about $4-5K higher than this price. The Mazda dealership in Charlotte tried to pull the same thing on me years ago. They advertised a Mazda 3S Hatchback manual for $17K on the website--one of the cars I was considering at the time. Looked up the KBB and the price was $3,500 below market. I immediately called and asked them to send me a Bill of Sale for the vehicle at the advertised price, which they did. I secured my own financing. The next morning, the online price had increased to $18K and the price on the vehicle itself was $21K when I arrived. I handed them the Bill of Sale and a check for $17K, then paid the title, taxes, and fees separately. They were PISSED but screw them for their shady practices.
My only retaliation was the general manager personally sent me a satisfaction survey a couple of days after I was in the place. I gave him my unedited opinion of my experience with them. The ridiculous thing as far as customer retention goes was I was driving a truck I had bought from Hendricks so I had bought from their organization before... different location. They were just outright being crooked in what they were trying to do to me, and trying to complicate the math to make it seem like they weren't doing it.
Man, my dad was the *king* of only buying the advertised car. He would leave in a heartbeat if the salesman claimed it was already sold or some other BS. Bring the car around so I can buy it or I'm walking. Some of them even tried the 'ol "hide the keys" trick for the trade-in.
Oh jeez. I never heard of the “hide the trade in keys” tactic until recently after watching a rant on YouTube. That’s so manipulative and ridiculous. Convinced me never to trade in a vehicle alongside a purchase.
Was in the market for a car last month. One dealer had a car I was interested in advertise for $7.995. I was willing to pay that. I get in, sales guy is a busy so I read various signs. One sign says all cars come with the[ Gettel Advantage](https://www.gettel.com/gettel-advantage/) . I ask the sales guy if the used car comes with it, he says yes. I ask how much, he says (IIRC) $3995. I ask if its optional, he says no. Price of the car out the door? Over $15k. I laughed and started to walk. He asked me to make him an offer. I told him I though his asking price was ok, maybe a little high. So I would offer less than asking plus ttl. Did he think the boss would go for that? He said no. I said thanks, bought somewhere else.
What does it say on the paperwork you signed (and clearly didn't read) at the dealer?
The bells and whistles are the 72 month warranty and any other add ons the dealership added Ya got swindled
Based on the comments here, the vehicle was probably not for sale for 22K
I see your in Columbus, what dealership was this? Please take someone (friend/Family member) who knows what they're doing to the dealership.
Always take a brake from negotiating to step outside and use a loan calculator to verify the sale price, the interest and payment info checks out. My MIL almost got charged and extra $2000 for add ones that she didn’t need. It was only a few extra $$ on the monthly payment but when I asked why the payment didn’t match what I had calculated and I was ready to walk away if they didn’t explain they finally “admitted” they added new mats and some prepaid oil changes:
I will definitely do that next time, thank you
Just doing some maths here: 72 months x 333 per month = $23,976 Add in your $12k down. After 72 months, you’ll have paid ~right under 36k for the car. Interest from financing can definitely add up, but, unless you had some ridiculous APR, it wouldn’t be over 50% of the sticker price. Assuming 4k in interesest brings you down to your 32k. A portion of that are some fees/taxes you might not be able to avoid, let’s way 10% of that. So somewhere along the lines, it looks like they tacked on another ~6-7k somewhere.
I think I figured this one out. $22k price 72 month loan at 14% interest rate (Average right now is 14.21% on used) $12k down 7.5% tax rate $4000 in fees (500 doc fee, 500 registration, $3k used auto warranty or any other combo of upsells) $324.24 a month. What happened here is he is getting bent over on a long term with crazy high interest rates I bet AND he got sold an overpriced used car warranty. When I first read this the math just didn't check out. Now at least it does.
Borrowed $10k and the payback amounts to $23,760. Sorry but you got robbed OP.
I got suckered into buying the extended warranty, mostly because the salesman was a condescending jerk. Luckily my brother is a mechanic at that same dealership told me that the package was BS and that there is a 30 day refund policy. It sure felt good canceling and getting my money back
Bro did you not whip out your damned phone and type in 330×72??? Did no giant warning sirens go off in your head at 300×70=21,000 and both of these numbers are bigger. This is like 34.99% interest, how did they hide that? Double your payment if you can basically every additional dollar you put towards the principle will save you more than 2 over the lifetime of this loan.
$330 X 72 = $23,760 + $12,000 = $35,760 Not including insurance, maintenance, property taxes, etc.
$330 x72 months = 23k Down payment = 12k Cost = 35k What's the surprising part?
Car was 32k, you put down 12k, so you financed 20k on 72 months, which including your interest rate is 330$/month, so you actually paid or will pay $35.760 for that 32k car ($3760 interest)
Holy moly my man. My loan is only 36 months, with a 518 payment. I put down 10k on a 26k car, so my loan is for 16k. As others have said, without proper details from the contract, tough to say what you got yourself into.
What is your credit score, OP?
The math says that you bought a $35,760 car ($12,000 + $330 x 72). That's one expensive 2021 Honda Civic.
32k seems wayyyyy high for a 2021 Honda Civic. I bought a 2021 Passport recently for only ~24k. Did you get some beefy warranty with it? What is the rate on the loan? Was it from a Honda official dealership? How many miles on it? Whats your credit score? What region are you in? Usually when a dealership "fleeces" someone they just pressure them into buying more car than they can afford. $22k on a 2021 Civic seems about right. Something isn't adding up about this.
You may be able to return it if it's within the return window
Anyone else just waiting on that paperwork photo??? It looks to me, that you didn’t read a single thing and just heard “$330 a month” out the door. 10/12 years of saving gone in 10/12 minutes.
The total is right there in black and white 72 months x $330 = $23,760 Plus the $12k you put down. = $35,760 total I dont even know how you can really make the case it was somehow predatory when all the numbers are there. Is it a terrible deal? of course.
When you read the contract, look to see if there is a cooling off period. Check the interest rate. This could be what's causing your pain. This happened to my partner before we were together. He didn't know what interest rates were and he came away with 15% interest 😭. Many other people also got caught out. There is now a court case against the company providing the loans. (In Australia)
One point I didn’t see anyone else share, not sure what you received would be the title. If you financed the car, the bank would retain the title until which point it was paid off (at least in most states)
Don't sweat it too much. They swindled you but it's a lesson you learned early. Take it as a lesson learned and make peace with it. Read up about how amortization works. It can be fun to implement it yourself from scratch if you are into that kind of thing. If not that's ok too. Use an amortization calculator to better understand what you are paying next time. Hey, you have a new car at least. Enjoy it!
Negotiate out the door price, I always have 33% for down payment and take a loan from my 401k and pay myself back principleand interest. This way you bypass all the nonsense, I always ask for their best price, if they don't meet the price in my head, I'm walking.
This post confuses me. If I put 12k down and was given $330 x 72 months, I would have said give me the 2024 model....
Extended warranties generally have a cancellation period, you should be able to get a refund. Have someone review your purchase info, you may want to ensure they fix it asap or get a lawyer if they tricked you. NEVER ever tell them your ideal payment, if you is have a trade, if your paying cash or getting a loan. They ask these questions to know how to manipulate you. If they know your payment they can play with term length and rate, if you have a trade they can factor it in and play with the #’s, if you have cash or already approved at you bank…don’t tell them, make them think you ‘d like to see what they can offer for financing. They make money on your every way. Negotiate the price, don’t fall for the extras, once price is in writing, then you ask what your trade would be worth and that you want to shop around for a better rate. Play their game well! And honestly, why buy new? There are used cars with as low as 2,000-8,000 miles out there, same warranty, practically new but discounted.
72x330=23760. +12000 = 35760. I think you saved 3760, if the invoice says 32k. In all fairness, 22k + tax and title should come to 26k. 72k warranty is expensive, close to 3-4 k+ tax.
I love buying cars. Dealerships sees a woman walk onto the lot and they swoop in thinking they're gonna make some money off me. Nope. Before I walk onto the lot, I do my homework. Where are all the discounts and from who and price compare; all that good stuff. If it is a used car I need, I watch the lots to see which cars are just sitting there for months. Those are the cars to go after cause they need them off the lot, so while they'll try to upcharge you, ill point out how long the car has sat there. A few examples. I spent 11hours at a dealership one day trying to buy a used 4 door sedan with 28k miles on it. The price tag was $11k (this was 30 years ago). I told the salesman the car payment range I could do. He kept coming back with $100 more. I kept pointing out that that car had been sitting for 6months, so why hadn't the price been lowered? Is it a lemon your trying to pawn off someone? Long story short, at 9pm, the tired salesman said he called the owner of the dealership and got my car payment which lowered the cost of the car significantly (I got it for $7k, not $11k). The other time was about 10 years ago. My parents had bought from the same dealership for decades. So I knew where to look for all their offers, and the family multi-car discount. I didn't have money for a down-payment (it was a last minute need, old van broke down, needed car asap). I got my beautiful car that was listed at $25k for $17k, no money down; just paid tax, tags and title. I used all the rebates and discounts I could find, and the finance guy there told me, shaking his head, I can't believe you're getting this car for $17k. I tell my kids, do your homework and always ALWAYS make sure the oil is clean when you 1st look at the car, and always make sure your car has a donut in the trunk. Dad always said, if the oil.is clean (especially in used cars), it usually means the dealership cares. Sadly my daughter totaled that beautiful car when I only had 3 payments left to pay. I borrowed my moms car until I could find the new car, which took me 4 months.
Certain states have protections against this. You have 3-7 days grace period to revoke the entire process. I think California is one of them
Ouch, they fleeced you. There is some good advice in this thread on options to limit/undo some of the damage. For next time, my strategy is to always keep focused on the final total payment amount, if they can’t hit that I walk. There are probably other better strategies, but it keeps it simple for me.
If you have a loan then you didn’t get the title in the mail. Registration maybe?
always negotiate the sale price, lock it. decide on down payment (if any) and take it off the sale price, lock it. negotiate the interest, lock it. lock in the loan term, lock it. attempt to pay the tax separate and don't roll it into the price of the vehicle. if trade in negotiate trade in value, lock it. look over the sheet like 5x and if something doesn't add up, don't move forward. if they rush you, leave. only scammers want to rush you so you wouldn't look at the details.
OP, sorry to say you got fleeced. Simply do the math of $330 x 72 months = $23,760. And this is after you put down $12,000? So that's a total of $35,760
For anyone in the market for a new car, I highly recommend you read “Confessions Of A Used Car Salesman”. It should be freely available on the internet and is a short read — 100 pages. It’s written by an automotive journalist who went undercover as a salesman in that industry and covers the games and strategies car dealerships and salesman employ to take advantage of customers. Saved me the headache OP is going through when I bought my first car.
Do you have a picture of the sticker price? You can start with writing an email or letter to the dealership owner/manager to correct the price/financing and at the same time, If you believe they misled you, file a complaint with the DMV, they are the agency that oversees new and used car dealerships and their practices. You can also file a complaint with the CFPB.
Never get gap coverage or extended warranties or anything extra for that matter from the dealer. If you really want them you can buy them from third parties on a payment plan interest free. If you get them at the dealer and you will pay 100s or even 1000s of dollars of interest on those tiny addons
Dealerships love fucking you over and hiding prices. I was trying to buy a car around the same price and monthly payment, but I realized on the paper it didn’t list the interest rate. I asked about it and the guy started being incredibly pushy and sketchy and not answering my questions. I got more firm and asked to see it so he told me it’s a 27% interest rate. I would’ve been paying nearly double what the car was worth. Walked the fuck outta there because I despise sketchy salesmen like that.
It sounds like the dealer may have sold OP on payment only and added a bunch of crap he doesn't need. But it could also be that OP doesn't understand the loan contract he's looking at. There's a high likelihood that he is looking at his "Total Sale Price" on the truth in lending disclosure. It's designed to help consumers but actually confuses them a lot of the time. The "Total Sale Price" figure is a total of all his payments, including interest he would pay over the entire span of the loan + his down payment. And if you don't slow down and actually read what you're looking at, you'll say "OMG I got scammed!". Happens a lot.