By on June 2, 2016

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Two weeks ago, I told you the story of my friend “Jenny” and her purchase event at Orlando Kia West. I’m happy to report that the dealer has resolved the issue to her satisfaction.

She received a personal call from the general manager offering a set of floormats, and she’s seeking to refinance the vehicle through her stepfather’s credit union. According to Jenny, the general manager was quite apologetic, but he also said that “90 percent of the numbers in that article were wrong.”

Mr. GM, you still have my e-mail (it’s [email protected], if you lost it), and I’m happy to print a retraction on anything that I got wrong. (In the meantime, we’re still happy to show up on the first page of results when people search for your dealer on Google. –Ed.)

But, in the meantime, let’s talk about what Jenny could have done differently, and what you can do the next time that you’re looking to buy a car to avoid all the hassle and pain she experienced.

Ignore the Foursquare

Jenny’s number one problem was focusing too much on the payment. She works an hourly job that doesn’t pay a lot, and she was very concerned that she wouldn’t be able to afford the monthly installment. Once the dealer knew that she was only worried about the monthly payment, it was able to make all sorts of voodoo happen behind the scenes and still offer the payment she needed.

Despite the posturing that tends to go on in these parts about money, the reality is that the vast majority of new and used car buyers are payment buyers. It’s silly for any advice columnist to say that you shouldn’t worry about the payment — of course you should, because you need that payment to fit into your budget.

However, what I will say is that if you focus on the final transaction price, the payment should take care of itself. There are plenty of reverse payment calculators available online. Go plug in your monthly payment that you can afford, along with the interest rate you can expect to pay (more on that in a bit), and you’ll know how much car you can really afford to buy.

Bad Credit is a Temporary Problem

Jenny was in a position of weakness when it came to her credit: she literally had none. As a result, she basically felt as though she was at the mercy of the dealer, even with a co-signer.

Too many people feel as though their credit situation is permanent, and the predatory lenders in the world do nothing to try to convince them otherwise. This just isn’t so. If Jenny had focused on resolving her credit issues 12-24 months ago, she could have had at least a 570-660 credit score by now, which would open up a whole new world of financing options for her. A 620 beacon is good enough to get bought on most cars nowadays, and a 660 qualifies you for most promotional financing (not all, though, as some require Tier 1+).

How could she have done this? Well, I’m no Dave Ramsey (thank God), but getting a secured credit card would have been a good start. She also could have used that $5,000 she had saved up to get a cosigned $5,000 car loan for an early model used car, and then paid it off nearly immediately.

Some readers suggested that Jenny should have just bought a $5,000 used car. That certainly could have been an option, but Jenny can’t afford a huge repair bill out of nowhere. The bigger issue, though, is that when it came time to buy another car, Jenny would have been in the same boat again.

Always Ask for a CARFAX/AutoCheck

According to Jenny, the GM still claims that her car was never sold to an individual — or, at least not successfully. They claim that they had a buyer, and that they sold the car to the buyer over the weekend, but the buyer’s credit was rejected on Monday, so they had to repo the car. This happens much more often in the car business than you’d think. However, that still doesn’t resolve the matter of why the car was actually registered to somebody else, and it completely bombs their whole “we bought it from another dealer” story, too.

If the car has more than 100 miles on it, even if it’s “new,” ask for a CARFAX/AutoCheck. That one piece of paper would have saved Jenny a lot of headache. As is often said around here, a CARFAX won’t show everything, but anything it does show is valuable information to have.

Don’t Sign Anything You Don’t Understand, and Don’t Be Afraid to Ask Questions

Too many people think the battle is over once they get into the Finance and Insurance office. They don’t realize that it’s really just begun. Jenny wasn’t prepared to discuss things like gap insurance. She really had no idea what the final transaction price was, and she still doesn’t. She just signed stuff.

Acres of paper will be shoved at you in that office. The number one mistake people make is not wanting to appear ignorant. They’ll nod their head at things they couldn’t possibly understand and sign all sorts of things without reading and asking questions.

The safest word in the F&I office is always “no.” You can buy Gap insurance later if you really need it. You can buy an extended warranty later if you really need it (trust me, you’ll get besieged with letters at the end of your OEM warranty).

Before you say “yes” to anything, though, ask every question that you can. If any of the answers don’t make sense, ask for clarification. If they still don’t make sense, don’t say yes. And if anything starts to feel shady …

Be Entirely Prepared to Walk Away at All Times

Jenny wanted a Kia Soul, and she was convinced that this was the best deal she could ever get on one. Not so fast, my friend.

Don’t fall in love with a car. No matter how good the deal seems, or how rare the car is, understand that the manufacturer literally made thousands of them. There’s another vehicle out there waiting to be purchased, and another dealer out there who’s willing to deal fairly and honestly with you.

The number one piece of leverage that you have as customer is your ability to get up and walk out the door. If the dealer gets any sense that you have emotionally invested yourself in the car … you’re toast.

At the end of the day, remember this: you’re not there to make friends. Do your homework, come prepared, and be ready to do battle. And you’ve always got my e-mail address if you’re really stuck.

Good luck out there.

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144 Comments on “Bark’s Bites: Orlando Kia West Update, And How You Can Avoid Being A “Jenny”...”


  • avatar
    87 Morgan

    There are two types of Gap insurance. One is a product you can buy from the dealer or bank if you go direct. The other is a policy add to your auto insurance policy. The former has to be bought at time of loan signing as the policy is attached to the loan. If the loan is paid off or refinanced the policy expires. If/when your friend refinances the loan the gap policy she purchased from the dealer will be void. She can most likely cancel the policy for a refund. You can always add a gap policy to your auto insurance, typically if it is 3 years old or newer, when you read the fine print they are usually not a good idea. Their is no fine print on the gap policy attached to the loan. Most are 150% of MSRP or Nada Retail, max loan of 100k and max payout is 50k.

    For those that think Gap insurance is snake oil…industry wide loss ratios are climbing fast as used car prices come out of the stratosphere due to the number of off-lease returns flooding the market coupled with extended term loans being the norm 66 months or more and of course the ever present no money down.

    • 0 avatar
      ajla

      Not being upside down on your loan in the first place seems like the best call.

      • 0 avatar
        S2k Chris

        “Not being upside down on your loan in the first place seems like the best call.”

        Yes and no. Yes if you have $0 in the bank, but no if you are getting zero/near zero percent interest and can self-insure. I happily financed ~108% (price + TTL) of my TSX because I was doing so at .9%. Yeah I was upside down for a time, but who cares, I could self insure at that price. Not worth putting $3-4k down (I had no trade in) just to not be upside down which is a situation that resolved itself in a few months anyways.

        • 0 avatar
          Mandalorian

          Until I read the first article in this series I had no idea what “Gap Insurance” even was.

        • 0 avatar
          duffman13

          Likewise, I bought GAP insurance on a previous puruchase because it was 0% interest, I put $0 down, and the price was reasonable.

          On our most recent car purchase (late model used), we opted not to, though the financing was much the same (1.9%, $0 down). This was due to getting an extremely competitive price, and the fact that USAA Pays out not just market value, but also TTL in the event of a total loss (I totaled a car a couple years ago with them, learned the hard way).

    • 0 avatar
      notwhoithink

      Yeah…uh…I just can’t even begin to imagine the degree to which you’d have to screw yourself in order to need a policy that covers 150% of MSRP or NADA retail. Even a bad negotiator can use TrueCar and come away with a sale price that is 5-8% under MSRP. If you factor in TTL then you might be right back at MSRP, or maybe 102-103% of MSRP. Take on a stupidly expensive extended warranty and GAP policy and you might hit 110%, if you went with no money down.

      To hit 150% you pretty much have to walk onto the lot, drop trou, grab your ankles and scream “Give it to me boys, I’ll take whatever you’ve got!”

      • 0 avatar
        S2k Chris

        Roll in negative equity.

        • 0 avatar
          notwhoithink

          Ah, yes, good old “negative equity”. The siren song of sub-prime lenders everywhere. Back in the day we used to call it being “upside down” or “under water” on the loan, because those terms made it clear that it wasn’t something that you wanted. These days it’s been rebranded in clinical and judgement-neutral terms so that the ill-informed consumer can feel sophisticated when they talk about it. It’s not “I owe more than the car is worth” it’s “I have negative equity”.

          “Hey Cletus, how’d you manage to score one of those sweet new Chrysler 200s when you still hadn’t paid off your broken down Dodge Avenger?”

          “That’s easy, Bubba! I used the power of negative equity!”

          “Damn, Cletus, I need to get myself some of that there negative equity myself!”

          Seriously, look at various online forums and you’ll see people all the time talking about how they want a new car after 18 months in their old one that is worth half of what they owe and they heard that they could do it with “negative equity”.

        • 0 avatar

          I’ve seen a few agreements where the neg eq is rolled in. That’s how you get a 70k bottom line for a middle class car. D’Oh !

      • 0 avatar
        JRobUSC

        “To hit 150% you pretty much have to walk onto the lot, drop trou, grab your ankles and scream “Give it to me boys, I’ll take whatever you’ve got!””

        That’s not true. First, there are times that NADA book is less than what cars are selling for, especially if you’re looking at CPO cars, so if you don’t put down money and finance the whole thing plus tax, title, and license, you can very easily start right off the bat well over 100% of book. Second, you’re forgetting the most common reason people end up financing way over 100% — negative equity from whatever they’re trading. And a lot of times, people with negative equity in their current car had negative equity in the car before that, and before that, etc. It snowballs, until eventually they are so upside down they literally can’t trade out of it without money down and are stuck in it (“do you have GAP? Yes? Good, maybe you could leave the car running in a bad neighborhood.”)

        Regarding warranties, yes, you can buy an extended warranty afterwards. However, just like most people prefer not to pay thousands of dollars at once for an unexpected repair, most people would prefer not to pay thousands of dollars in a lump sum for a warranty. If you get one up front you can roll it into the financing. Considering how low interest rates are (manufacturer banks often run 0-1% loans) I’d rather roll a $3k warranty into the financing than shell out the cash, knowing my money would earn a larger return where it already is.

        • 0 avatar
          ajla

          I don’t know the situation universally, but Mopar and GM both offer interest-free payment plans on their warranties.

          If you’re wanting to get the extended warranty at the dealer you’ll have to be willing to research, discuss, and negotiate that portion otherwise the F&I office is just going to light you up. Personally, not worth that hassle for me when I can just go online and buy one later on.

  • avatar
    JimZ

    and if you *do* get an “extended warranty,” make sure it’s a factory-backed service plan. Third-party “extended warranties” are really just insurance; and they can be a minefield of exclusions and gotchas. Like a lot of insurance companies they’ll look for any reason to reject a claim.

    Factory service plans, on the other hand, are still processed through the automakers’ existing warranty system (in most cases, can’t speak for all.)

    • 0 avatar
      87 Morgan

      Careful JimZ. What you are typing is not necessarily accurate. Read the fine print on a VW, Hyundai/Kia, GM service contract. They **are** not underwritten by the factory. JM&A aka Fidelity warranty and/or Warrantech. Approved by the factory as they get a piece of the pie. GM is working on bringing their program back in house though.

      The 3rd party insurers in a lot of cases or at least one provide better coverage when compared to the factory..looking at you Nissan/Infiniti. Their coverage is expensive and leaves a lot of technology holes or used to. Been a while since I read through their policy at one point it did not cover the touch screen.

      • 0 avatar
        SC5door

        “Read the fine print on a VW, Hyundai/Kia, GM service contract.”

        From the Hyundai Protection Plan Vehicle Service Contract:

        “Provided through Hyundai Protection Plan, Inc., a subsidiary of Hyundai
        Motor America.”

        KIA is covered by Fidelity Warranty Services.

    • 0 avatar
      sirwired

      For legal reasons, extended warranties are considered insurance, and regulated as such. If the manufacturer does not want to go through the immense pile of paperwork involved in setting up a new insurance company licensed to do business in each and every state, they will farm out their warranty.

      And, as Morgan noted below, many manufacturers do exactly that.

  • avatar
    redav

    Also, if anyone says a deal has to be done today, walk away. If it isn’t a scam, they’ll call you back tomorrow.

    • 0 avatar
      sirwired

      While the “This deal is only good today” is usually a lie (and it’s nearly always a lie in used market), there ARE plenty of new-car promos that DO have a fixed expiration date. The deal might very well only be good until the end of the day, because the factory promo will expire.

      • 0 avatar
        Maymar

        At the same time,how many of those promos don’t end of the 1rst of the month? And, it’s not uncommon for promos to get extended, but the sales staff aren’t given any warning when that’s going go happen, because it’s a whole industry built on selling RIGHT. NOW.

      • 0 avatar
        dal20402

        There’s a big difference between hearing “XY incentive from the OEM expires today” and “THIS DEAL IS ONLY GOOD TODAY!” The honest dealers will be specific about what parts of the deal expire today. They may even tell you forthrightly (as the dealer that leased me my C-Max did): “We need to get our numbers up for the end of the month and to give you this deal we really need you to buy by the end of the month.” It was April 26th when they said that, and I signed the papers on the 27th.

    • 0 avatar
      Flipper35

      When we were shopping a couple years ago one dealer was telling us that and tried every trick in the book to get us t buy that day. The issue we had was he would not give us the final sale price of the car.

      • 0 avatar
        Fred

        When I get that old “what will it take to get you in the car today?” I give them a low ball figure and smile. You want to do the old hard sell, then I’m going to to the hard buy.

  • avatar
    redav

    The “Bad Credit is a Temporary Problem” struck me as one of those things that’s so simple I never thought about it. I hadn’t considered that people had that misconception.

    When I graduated HS, my parents set up a joint credit card with me to help build my credit history. It had a puny limit, and I only used it in emergencies. They also encouraged me to buy some furniture with the store’s financing. I’m sure all that helped when it came time for me to get my first real loan.

    • 0 avatar
      sirwired

      If you don’t have the ready cash for a secured credit card, the two best forms of “starter credit” are store credit cards and gas cards. Both will often be granted to just about anybody with a pulse that is not actively in bankruptcy.

      You should, of course, pay them off in full every month. If you do not have the discipline to do that, then yes, a fixed installment plan is a good alternate choice if you can land a multi-year same-as-cash deal.

      • 0 avatar
        FreedMike

        Buy a big screen TV or medium priced home appliance like a Kitchen Aid mixer from some appliance store, allow them to rip you off on the rate, and pay it off in just over a year (which in the end probably costs you about as much as you’d spend on a good dinner out with your S.O.). You’ll be amazed how this helps your score. And you get a nice TV or appliance in the bargain. Win-win.

        • 0 avatar
          duffman13

          Most TV, furniture, and appliance stores will still have a store credit option with zero or near zero rates for a promotion period, but everything else you said applies.

          Heck, even home depot does 0% for 6 months.

          • 0 avatar
            JimZ

            that was the way I was told to start establishing credit history. Buy something (which you can afford outright or mostly outright) which is offered on “x days/months same-as-cash,” and pay it off within the 0% period.

    • 0 avatar
      dal20402

      My mom lent me $3,000 to take out a secured credit card early in college. I kept it for a year, paid her back, and at the end of that year had a 700+ credit score as if by magic. That was enough to get me a big-boy credit card and an apartment, and since then my score has always been above 790.

      If you or family don’t have that kind of cash to tie up for a year, store credit is another good option.

  • avatar
    sirwired

    I agree that all of this is good advice. However, I do take issue with the last bit of it: “The number one piece of leverage that you have as customer is your ability to get up and walk out the door. If the dealer gets any sense that you have emotionally invested yourself in the car … you’re toast.”

    I just find it ironic that you are instructing readers on a car site to “not fall in love with the car”; I’m not buying a dishwasher here, and consider myself something of an auto enthusiast… if I’m not in love with a potential new car, I’m going to search until I find one I am in love with; otherwise I’ll just keep driving my current car.

    Yes, you should be aware of the other dealers in the area and their inventory, but it’s kind of futile to suggest that one should not get all excited in the process of buying a new car.

    • 0 avatar
      VoGo

      You’re free to feel excited, but wise to keep a poker face.

    • 0 avatar
      DenverMike

      Remind them who’s Boss. You should get up and leave, just because you can. They can’t. If it’s a 1 of 1, rare options or special order Plum Crazy Purple Pearl with white leather, then just take a break to go out to your car for what ever, excuse.

    • 0 avatar
      S2k Chris

      You can fall in love with a car, but unless it’s a Ferrari or Special Wishes Porsche or something, it’s not like the same things can’t be had at the dealer the next town over. You don’t love THAT Accord EX, you love AN Accord EX.

      • 0 avatar
        dash riprock

        At a dealer I was doing consultant work for, a salesman brought the GM a very skinny deal(after several back and forths) that the sales man was very surprised the GM accepted. GM’s logic was “they are building more tomorrow”.

        Most cars are commodities….money in your pocket means you are in charge

      • 0 avatar
        rpn453

        “. . . understand that the manufacturer literally made thousands of them.”

    • 0 avatar

      I think it could be rephrased as “don’t fall in love with a car unless you can afford to”. If you’ve got the money to pay extra because you really like a specific car, fine. If you are a first-time buyer with limited income, you should probably be a little more flexible.

    • 0 avatar
      duffman13

      It depends on the vehicle. If you’re buying a Mustang or Miata, the salesperson knows you have some emotion invested in the vehicle regardless of what you show outwardly.

      On a generic sedan or CUV though? No way do you let that come through. Those are appliance vehicles to 99% of the population, and part of your job as a buyer is to make it come across as such. Don’t let your feelings get used against you.

      • 0 avatar

        Time is a tool. If you are excited and want to buy today, it will work against you. If you do my “pretend you are stoned, a half beat behind” routine, and prepared to be there all day, you will save some money.

    • 0 avatar
      bikegoesbaa

      One of the advantage of buying new is that stuff like miles, maintenance, and condition are all consistent so like vehicles really truly are commodities.

      Any new car is the same as any other new car with the same make/model/options/color; there’s no reason to get attached to a particular one so just go for whichever you can get the cheapest.

      Even with more emotional purchases like sports cars, there’s still no reason to get attached to a particular machine. Sure, I might really want a Miata, but it doesn’t need to be *the* Miata that I’m discussing with the sales guy right now.

      Used brings up a whole lot more variables. It might well be worth paying extra for a primo “little old lady” example if most examples are raggedy, modded, or otherwise undesirable.

    • 0 avatar
      iantg

      I ran into this last year when my we decided to replace my wife’s car. I wanted her to love the car, but when we did the initial shopping – we looked at and test drove cars without her trade with us. It was going to be a decent sized expense that we will be living with for a few years and we had a short period of time to take care of it. (long story) We discussed what she wanted in a car. I wanted to avoid my biases clouding her choice – I didn’t want her to resent me for picking what car she bought. I had her test drive multiple examples of the same car to get a feel for how the cars feel as they age and to also enable her to not feel any pressure from a salesperson. We started at a VW/Nissan/Kia dealer and test drove a VW Rabbit, Ford Focus, and then a Mini Cooper (I wanted to drive it – it was red and I wanted us to both try something I had limited exposure to – she was initially hesitant about driving a car she had no desire to own). She hated the Rabbit (too big), the Focus was a no go (it had a growling wheel bearing and the steering wheel was pulsating while driving), and the Mini… she was grinning ear to ear. She wanted it… the clearcoat was peeling bad and the salesman went straight to high pressure sales tactics (“It won’t be here tomorrow” – “It’s a good thing they made more than one”). We went to mini, tried a few more. We also tried a couple of Fiat 500’s and Honda Fit’s.

      In every test drive – I had her perform basic every day tasks – a 3 point turn, parking in a crowded parking lot and backing out of said spot, putting stuff in the trunk, etc. to see how each car worked for her. I also asked her a series of questions – 1) What do you not like about this car? 2) Are you comfortable in here? 3) Do you feel safe in here? 4) If we pay x amount per month for this car, do you feel that you will resent it in six months when the novelty has worn off? 5) Is this something that you’ll be excited to see when you’re walking out to it in the parking lot after finishing a day of work?

      This battery of tests and questions ruled out the Honda Fit (the deep dashboard made it difficult for her to park the car or perform a 3 point turn), the Fiat 500 (she liked it, but didn’t love it and felt she’d resent it because it felt cheap), an e46 325i (she felt it was beyond boring), and we ended up with a Mini Clubman. We didn’t buy from the Mini dealer. The salesperson was great… but the car they showed had a solid check engine light which didn’t instill confidence in their Quality Assurance. We bought from Flybrian and it worked out great. A year later, she adores the car.

      Since this experience, we’ll periodically visit carmax and test drive stuff to get a feel for what’s out there and what we want to do moving forward so there’s less pressure to figure something out in the future.

  • avatar
    stevelovescars

    Also, if you have friend like Bark or in the case of my sister, a brother who works in the car business, please ask for advice BEFORE you buy the car! I still cringe every time I see my sister’s Kia Optima knowing what she paid.

    If you have to finance, do some digging around before you go to the dealer. If you can join a credit union locally, do so. Their rates are usually really fair and if you walk into a dealer with an approved loan and an understanding of where your payment should be you’re ahead of the game. The dealer will likely try to beat the rate or will process the paperwork with the C.U. for you.

    For some makes, a CPO car may also be a good way to go. My father really wanted to Buick Lucerne a few years ago (seriously, how I am related to these people still confuses me) and he was looking only at new cars. I suggested CPO and just didn’t even understand what that meant. He was just scared of the idea of a used car. I found him a 3-year-old off-lease Lucerne with 24k miles at a dealer a few miles away for HALF of the price of an identical new car with a full warranty. He’s still driving it, it’s paid off, and he never had any problems with it. I think he even got a low-interest promotional rate from GMAC at the time.

    • 0 avatar
      JimZ

      and if you do get advice from such people, don’t ignore it.

      it’s partly why I never bother giving recommendations on car purchases to people, even if they ask. Inevitably they ignore what I say, and when they’re unhappy with the results it’s still somehow my fault.

      • 0 avatar
        iNeon

        Usually, I solicit advice from: 1 Ford guy, 1 GM guy and 1 import guy.

        Then I go buy a Mopar out of habit and drive it for a decade :P

      • 0 avatar
        hubcap

        If someone doesn’t follow your advice it doesn’t means it was ignored. People who ask value your knowledge and experience. That doesn’t mean what you suggest is the proper or only course of action.

        It’s advice, not an edict.

        Depending on the situation you can receive a wide range of advice. Accepting one (or more) isn’t ignoring that which wasn’t followed.

        When someone asks me for advice, I gladly give it without the expectation that it should automatically be followed. I consider it like a light illuminating am area of darkness. Sometimes my light shines on the answer, sometimes it doesn’t. Sometimes it’s a combination of two or more beams.

        I see no reason to be upset over someone not following your advice but we all have our pet peeves.

      • 0 avatar
        Acd

        So then the only place you give advice to people is here?

    • 0 avatar
      jmo

      ” for HALF of the price of an identical new car ”

      Half the MSRP or half after you applied the typical mountain to incentives?

    • 0 avatar
      kvndoom

      “if you walk into a dealer with an approved loan and an understanding of where your payment should be you’re ahead of the game. The dealer will likely try to beat the rate or will process the paperwork with the C.U. for you.”

      Ain’t that the craziest thing? If you’re not pre-approved or don’t know your credit score, they will try to ream you 8 ways to Sunday. If you DO, then they will go out of their way to get you a BETTER rate! When I bought a Kia Forte a few years back I had 1.99% APR approved already from my CU. The dealership wound up getting me 1.8%!

      On the flip side, when I bought the Focus a year before that, I just went there to get the car and they said “15% APR without an extended warranty, or 8% if you get one. It’s the best ‘the bank’ will do.” We needed the car (*needing* a car is a bad spot to be in versus *wanting* a car) so I signed, because I really wasn’t worried. As soon as I got the payment book in the mail I went to my bank and refinanced it at 2.99%. I wonder if those slimeballs keep their points even if the loan is refinanced.

      • 0 avatar
        FreedMike

        And they’ll ream you if you’re a minority too. Yes, it happens. My ex-brother in law, who is from Mexico, got approved at 23% and thought it was a good deal. Problem is, I’d done his home loan too and knew he had a score over 700.

        I showed up to the dealer with a copy of the credit report and began making noises about getting the local “9News Wants to Know” reporter to show up ask why they were charging Hispanics with good credit 23% interest.

        The rate dropped to like 4% magically after that.

        Yes, stuff like this does happen. There is a reason why the government monitors this stuff.

        • 0 avatar
          notwhoithink

          Seems like that was all of the evidence you would need to run a story like that anyway. I mean, if they’re doing it to him then you know they’re doing it to other people as well. Might as well pay it forward by alerting the world to their scumbaggery.

      • 0 avatar
        duffman13

        Likewise when we bought my wife’s Santa Fe 2 years ago, I came in with a 2.25% pre-approval, and they told me that we’re filling out the credit app because it’s required for filing/informational purposes, but they wouldn’t actually run it because they couldn’t get me any better than that anyway.

      • 0 avatar

        I had the same experience (my rental car was up and I did need a car yesterday. My 5% loan was refinanced before I actually made a payment with a much lower # commensurate with my credit.

        Does anyone know ? If the buyer re-fi’s the loan, does the dealer keep the point or two ?

        • 0 avatar
          notwhoithink

          From what I’ve heard from car salesmen, typically if they arrange financing and you don’t keep the loan for at least 90 days then the lender takes back whatever incentive/bonus the dealer would have otherwise gotten. I’ve seen a lot of salesmen say that these days there’s no discount for paying cash because they make money on the back-end financing. Consequently, rather than paying cash outright for a car they suggest that you let them arrange financing at favorable terms and get a little more discount on the sale price of the car, then after 90 days pay off the loan with the cash.

          If this holds true then by immediately refinancing or paying off the loan you’re taking money out of the dealer’s pocket, which they may well have deserved.

      • 0 avatar
        redav

        Knowing your score isn’t really that important. Consider, if you just don’t tell them whether you know your score, they can’t pull that trick. Far better is to already have an offer from your own bank or credit union. That rate is what you need to benchmark.

        Some of the incentives don’t ‘stick’ if you pay it off before a certain time. But refinancing a car generally means you have to get a used car loan instead of a new car loan, and the rates can be very different. Again, it’s better to go to your credit union first and have the offer in hand.

    • 0 avatar
      agent534

      AAA is a great place to get financing before you go car shopping. They work with local banks and credit unions and can get some great rates for members. I never walk into a dealership without talking to AAA first. My AAA membership is worth it for that alone. Usually the dealer can beat the rate, but I have used the AAA financing more than once.

  • avatar
    LS1Fan

    “Some readers suggested that Jenny should have just bought a $5,000 used car. That certainly could have been an option, but Jenny can’t afford a huge repair bill out of nowhere. The bigger issue, though, is that when it came time to buy another car, Jenny would have been in the same boat again”

    Indeed.
    That quote is why the Dave Ramsey disciples are wrong .

    For those thankfully unaware- Dave Ramsey’s alternative to the ubiquitous Auto Loan is a fantasy plan where an individual without much money -either due to low income or paying off debt- buys a used car for $5000, sets aside an amount for a monthly payment, and after five years they take that money and buy a better car and repeat until Nice German Luxomobile is within reach.

    Catch is , few cars under $5,000 will last long enough for a buyer to save anything. Whatever amount they can squirrel away will be commesurately sucked dry by unannounced repairs; even if the used car doesn’t have a German badge in front , basic repair items like Catalytic converters run $600 to install with labor.

    Then the Ramsey Acolyte must budget for past due maintenance items , because maintaining cars today is a lost art among the general population.

    Further, there’s always that one basic repair on every car that costs $1,000 plus because the basic part is underneath the whole vehicle ,buried in the cylinder head or some such complication.

    Lastly your attendance record at work is unlikely to survive repeat visits to the mechanic .Remember parts like to fail in groups, so folks in this area go months without issues and then end up dropping $2,000 at one sitting. With a loan your cost of transportation is consistent and predictable, and you don’t have to worry about needing to drop a grand out of the blue.

    Unless you bought a used German car out of warranty, that is.

    • 0 avatar
      HotPotato

      This +1,000,000. My wife, unlike me, has a mathematical mind, and made a spreadsheet to show me that a) used is not necessarily cheaper than new, and b) leasing is not necessarily for suckers. I wish I had understood these things long before; I would have saved money and heartache and driven a spiffy new car.

      Disclaimer: typically I bought used German cars out of warranty, so my case may not be representative.

    • 0 avatar
      nlinesk8s

      “Further, there’s always that one basic repair on every car that costs $1,000 plus because the basic part is underneath the whole vehicle ,buried in the cylinder head or some such complication”

      VW/Audi heater cores. Jeez, do they start with the core hanging in space, and build the flippin’ car around it?

      • 0 avatar
        JimZ

        No, it happened when space underhood got so tight the heater/A/C box had to move inside the car. most of the time the HVAC manifold is assembled into the instrument panel (dashboard,) which is then shipped mostly complete into the assembly plant.

        changing a heater core or A/C evaporator is a major production on pretty much any car these days.

      • 0 avatar
        redmondjp

        Yes.

        Seventeen hour job (book time) to replace the heater core on a 1997 Passat. It is the first thing installed inside the firewall, and then they build the rest of the car around it.

        And when it leaks, it will pour boiling-hot liquid right onto the driver’s right foot.

        • 0 avatar
          ToddAtlasF1

          It isn’t just that VW is horrible for building a car this way. It’s that they did it not too long after unleashing the MKII Golf and Jetta on the world, a car for which the heater core was a maintenance part. They were as weak as the handles on a Trader Joe’s bag, and enough of the pressure-relief radiator caps VW was using were defective to make sure that most of them popped.

    • 0 avatar
      onyxtape

      Dave Ramsey people pretty much only allow loans in the case of a primary home – and even that’s only among the disciples with more liberal interpretations of his teachings. Trying to convince them to take a loan for a car (even one at 0%) is a non-starter.

      With that said, the Dave Ramsey people I know are annoying in the vein of vegans and cross-fit people. They’re always reminding you that they are Dave Ramsey disciples. It doesn’t help that they also typically attend “cool” churches with bearded guitar-playing pastors.

      • 0 avatar
        viper32cm

        When I first heard a Ramsey devotee balk at the idea of taking a 0% loan, that’s when I decided to just ignore the whole thing. The time value of money is, indeed, a real thing.

        Also, totally agree about the comparison with vegans and CrossFit. I get the feeling that a lot of them feel that Ramsey’s teachings come after Revelations in the Bible.

        • 0 avatar
          tresmonos

          On the flip side, there are people who need cultist things like Ramsey and Crossfit or they won’t adhere to healthier behavior. I know a few.

      • 0 avatar
        S2k Chris

        “Trying to convince them to take a loan for a car (even one at 0%) is a non-starter.”

        Gotta love the “don’t invest until you’re completely debt free (mortgage aside)” stupidity. You mean, I shouldn’t contribute to my 401k, where I get 6% matching and a 28% tax benefit BEFORE MARKET GAINS until I pay off my .9% car note? Idiocy. If he has any sort of certification, it should be revoked.

    • 0 avatar
      viper32cm

      Agree 100%. Although, in my experience, most of the Ramsey devotees I know only buy Japanese cars in belief that they are insulating themselves from the cost of any mechanical breakdown. Also, I find that a lot of Ramsey devotees don’t know how to value their own time when it comes to such things or when they should choose to do something themselves or pay someone for the service, e.g., any automotive or home repair.

      • 0 avatar
        Scoutdude

        Well consider the fact that someone taking home salary of 100K per year is making about $50 per hour and that your local mechanic, plumber and other skilled trades will bill you at $100 per hour or so depending on your market and even if it takes you twice as long you are still “earning” your $50/hr.

        The other thing is that for most people their ability to earn that wage is limited. If you are that salary earner you can work more hours at our day job and not earn any more money. If you are an hourly worker your ability to more than 40hrs per week is usually limited because the employer doesn’t want to pay the overtime rate required by law or contract.

        So the reality is that an average person doesn’t have the ability to work extra hours this week because he had to pay the service provider last week.

        So factor all that in, and if you are scraping to get by, or trying to get ahead, like many who follow Ramsey and his ilk it certainly can make sense to DIY and keep that money in your pocket even if you are only “earning” a percentage of what you would, if you could, use that time to earn your regular wage.

    • 0 avatar
      duffman13

      I assume that any used car I buy is going to need a minimum of a full brake job and 4 new tires within one year of purchase. Tires are $4-500 regardless of make/model if you don’t buy cheap Chinese garbage. A brake job is likewise $500 unless you can do the work yourself (thankfully I know how to).

      Also consider on top some of the other suspension/steering things that can go wrong at $2-400 a piece on a higher mileage car like tie rod ends and wheel bearings, plus the requisite alignment when you have that work done.

      And we haven’t even gotten into standard motor maintenance like plugs ($150) and valve adjustments ($2-300) that most should have done around 100k. Not to mention the giant bills if anything in the powertrain or sensors related to it actually fails.

      Now granted with a Japanese car from the last decade the bottom paragraph is relatively rare, but all the other stuff happens with some regularity as the miles get up there. The thing about payment buyers is that yes – it may cost a little bit more, but at least it is a predictable expense, and they can still get to work.

    • 0 avatar
      dal20402

      I’ve never bought a <$5000 car that didn't immediately need $2000+ of deferred maintenance to be reliable and safe. Everything from brakes to belts/hoses to suspension bushings is likely to need attention even on cheap cars that are fundamentally decent. To really use the Ramsey Plan you need to be a competent DIY mechanic.

      • 0 avatar
        bikegoesbaa

        You might benefit from reevaluating your approach to buying cars and negotiating.

        All those expensive things it needs are a reason to beat the seller up on price.

        • 0 avatar
          dal20402

          Did I say anywhere that I was just blindly paying what is asked?

          The last cheap car I bought was listed at $3100 and I bought it at $2700. That was a fair price! If it hadn’t needed anything done at all, it would have been a $4000+ car even with high mileage.

          Most lower-mileage cars without maintenance needs are worth more than $5000.

      • 0 avatar
        ajla

        I’ll admit I haven’t run the numbers, but I find it slighlty hard to imagine that if Person A buys a 2007 Lacrosse CXL (or whatever) for cash and Person B buys a 2016 Optima EX (or whatever) with $0 down for 72 months @ 3.5% that Person B will come out ahead even if the Buick owner does no DIY and uses rental cars during downtime.

        • 0 avatar
          LS1Fan

          Let’s use a typical car shopper for an example and not a gearhead posting on TTAC.

          As Mr K observes, there’s used cars which last, and used cars that are time bombs.

          Knowing which is which is beyond the ken of your Average Car Shopper- sometimes the difference can come down to one engine type within the same freaking model lineup.

          Case in point- take the LS4 W bodies. Most W cars are reliable machines, and the 3800 models are nearly bulletproof cars.
          Let’s assume Mr Acolyte finds a used W body Impala SS . Dealer tells him this car has a V8! Loaded! All for $5595 + fees.

          Mr Acolyte, armed only with positive generic reviews of W body cars, signs on the dotted line and pays cash. A month later the overburdened trans blows – now he’s into the car $10,000 to get it back on the road, and is bumming rides to work or eats vacation/ sick time as the “cash” vehicle sits on the repair lot.

          Or he can’t fix it with no money left and needs another car ASAP, so ends up in a loan to get another car anyways out of necessity.

          There’s plenty of used cars which are like this. Trim A is a reliable option, while Trim B is a time bomb.

          With a lease/loan of a newer car, the expense is consistent. No $4,000 surprises , no nickel and diming as a used car gradually falls apart to the tune of $500+ every six months.

          And as cars gain more proprietary parts, sensors, and electronics this dynamic is only going get worse. I wonder how well the Dave Ramsey plan is gonna work in 2020 when every used car needs a $2000 dealer only computer replacement just to run.

          • 0 avatar
            ajla

            So it sounds like TTACers and their relations would likely come out ahead on the Ramsey plan while for others it isn’t such a good idea.

    • 0 avatar
      Mr. K

      Many $5000 cars are reliable and long lived. Ever curious why so many old crown Vic’s, tauri, and last model impalas are out there?

      Loads of cars, loads of parts. new and used and a market of people who could give a f what you think of their paid for car with working AC a nice crutchfield aftermarket system and money in the bank.

      Works with accords civics corollas camrys es300 acuras and any gm ford or mopar pick up.
      Just a bit sometimes quite a bit over 5k for those.

      • 0 avatar
        Mandalorian

        On a $5000 car it’s not reliability at question, it’s wear and tear maintenance issues. Tires wear out, brakes wear out, hoses and belts wear out. They don’t last forever and need to be replaced routinely. Chances are the owner selling a car at that price point isn’t going to want to sink a ton of money into it before selling. If one is shopping used at that price point, it’s just reality.

      • 0 avatar
        Scoutdude

        Yup there are a lot of $5000 and under cars that still have a lot of life left without big expenses coming for several years. Pickup a granny owned Taurus, Impala or Grand Marquis for $3500-$4000 put that extra money away for an unlikely big repair bill, and basic maintenance. Then add what you would have been paying in a payment and you’ll almost certainly have more money in the bank that the trade in value of that new car less balance owed, particularly if you are getting stuck with a high interest rate on the loan and/or have a long loan term.

        • 0 avatar
          VoGo

          One trick is to use the search term “estate” when cruising CraigsList. You will either find a station wagon (bonus!) or a car being sold by the children of someone recently diseased or put in a home. Typically, these are well maintained Buicks, Mercurys, Avalons etc. with low mileage and minimal wear.

          Sometimes you’ll even find a Roadmaster.

          • 0 avatar
            Scoutdude

            And many of those estate specials have a stack of receipts for every oil change, air filter ect, often done at the dealer. Chances are it won’t need a thing other than the over due on time, but not miles oil change and an air freshener to get rid of that old lady smell.

    • 0 avatar
      George B

      LS1Fan, I’ve never bought a catalytic converter in my life. I’ve replaced rusted tailpipes and a muffler on a car, but long after it was worth well under $5000. I would also argue that it’s never been easier to do DIY maintenance and repairs than in 2016. Anyone can find detailed instructions including YouTube videos. Autozone will loan you tools if you don’t already have friends that will do the same. If you’re making repeat unscheduled visits to a mechanic, you’re doing something wrong.

    • 0 avatar
      DenverMike

      For someone like Jenny, she’s better off buying new. I can already see her dragging home a LR Discovery leaking 5 different color fluids and a
      driver’s window that won’t go up, for $5,000.

      Owning older/used is full of traps, if you don’t have the smarts/experience for it, knowing who to believe, not overpaying for service/repairs, and buying smart in the 1st place.

    • 0 avatar
      redav

      That’s not just a Dave Ramsey fallacy, it’s also a used car fallacy.

      You never get more than you pay for. Buying used isn’t an exception.

    • 0 avatar
      SaulTigh

      Dave Ramsey is such a tool, I almost can’t stand him. He’s got some good advice for the “head in the sand, scared of money types” that are in a hole and aren’t smart enough to get out of it, but that’s about it.

      I also hate his debt free scream people:

      “How much did you pay off and how long did it take?” sayeth the Ramsey.

      “$75,000, in 14 months,” sayeth the acolyte.

      “And what was your income during that time?” sayeth the Ramsey.

      Acolyte spouts off some 6-figure income in the top 10-15th percentile of household income.

      I’d much rather hear from people who really sacrificed and paid off an amount of debt the same or larger than their annual income. Maybe I’m biased because I’ve done it.

      Also, Ramsey would never recommend you buy a German lux mobile even for cash. He owned a Bimmer when he went bankrupt back in the day and had his “conversion” and will diss them as a status symbol on occasion.

  • avatar
    NoGoYo

    …Why is there a picture of a 3000GT?

  • avatar
    PrincipalDan

    Local dealer group is legendary for the four square and focus on the monthly payments to the point of having an acquaintance who walked out because the sales guy REFUSED to disclose the transaction price even when confronted point blank.

    Thankfully Chrysler’s bankruptcy took their franchise away and after the proceedings were done Fiat allowed another more respected dealer group to open a Chrysler franchise in the area. But they still have the local Nissan franchise (which will keep me away from Nissan.)

  • avatar
    DenverMike

    Off topic, but never co-sign without the monthly invoice sent to you also. A friend co-signed for his daughter, but when daughter couldn’t make the payments, he knew immediately, taking over the payments. He kept the car at his farm, where it collected dust/cobwebs, until she “made good”.

  • avatar
    redliner

    “You can buy an extended warranty later if you really need it (trust me, you’ll get besieged with letters at the end of your OEM warranty).”

    In our household, we have vehicles from 2012-2016 and we get offers almost everyday. The way I see it, it’s a calculated bet. They bet that after everything is paid and done, they will still make money on you.

    Since these companies are not in the business of losing money, I generally accept that they have done their homework and that I am better off just putting a couple thousand dollars into the “rainy car day” fund. Granted, all of our cars are generally reliable, well maintained and not expensive or exotic. (sign of the times when a Chevy Volt is considered mainstream) I might think differently if I owned an older problematic vehicle.

    • 0 avatar
      kvndoom

      Ugh the letters are bad (nary a week goes by) but the phone calls are worse!

      I got one just the other week in fact. I am rather toxic to telemarketers on a GOOD day. This wasn’t a good day.

      “Our records indicate that the warranty has expired on your Kia Forte.”

      “Oh really? Well your (expletive) records should also have shown that I sold that (expletive) car over 2 (expletive) years ago. So stop calling my (expletive) phone!” END CALL.

      I really, really don’t like telemarketers.

      • 0 avatar
        JimZ

        call center jobs are soul-crushing enough as it is without having profanity screamed at you.

        • 0 avatar
          redliner

          Telemarketers are people too. I usually say somthing like, “Thank you for offering, but I’m not interested.” It is at this point that they try to interrupt. I just continue with, “I hope you have a nice day. I’m hanging up now.”

        • 0 avatar
          FreedMike

          I have some good stories from my stint in a call center, tho.

          The only “telemarketers” that really annoy me are the Mormons, who show up at your door to try and convert you. Jerks. I don’t care how into their faith they are – when you show up to my house uninvited and try to tell me I’m going to hell for being Jewish, I ain’t gonna be polite. Last time, I told THEM they were going to hell because they were worshipping Jesus, who was a false god. I told them I’d pray for them and encouraged them to become Jewish to avoid eternal hellfire. I have seen neither hide nor hair of them since.

          (Yes, I know that’s not REALLY what Jews believe…but these clowns didn’t know that.)

          • 0 avatar
            kvndoom

            It’s usually Jehovah witnesses at my house. I can probably thank my sister for that (part of the reason I don’t talk to her anymore). I tell them I’m not interested and slam the door in their face. Unfortunately Karen and the kids are more polite in their denial, so the $%%$#%% keep coming back.

        • 0 avatar
          kvndoom

          I know.. and I know I shouldn’t. I also know it’s not their fault that my number and info isn’t purged from their “records” when I tell them their info is wrong or outdated. I also know it’s not their fault that they have orders to call people on the useless Do Not Call list.

          But dammit, I just can’t stand it. From the time I got my first home telephone back in the 1990’s to my personal cell phone today, and probably until I go off the grid for some peace, somebody is always calling me trying to get my damn money. I can ignore and delete emails, I can toss junk mail in the trash, but I HATE hearing my phone ring for nonsense. I always answer the phone, because I never know when it might actually be important.

          • 0 avatar
            bikegoesbaa

            I recommend you set your phone so that only known contacts ring through. Everybody else gets booted to voicemail, which you can listen to and evaluate at your leisure.

            If it’s not important enough for the caller to leave a message then it’s not worth worrying about.

          • 0 avatar
            Mr. K

            Do you have a cell phone?
            Do you have voice mail or an answering machine?
            Do you see where I’m going?

            I haven’t answered the land line for years.

          • 0 avatar
            Ar-Pharazon

            If you have a smartphone, you can get an app that screens incoming calls for known spammers and sends them directly to voicemail. You can review screened calls later and the app will show you comments from other users that describe the caller . . . “pushing credit cards” or “selling timeshares”. If an unknown gets through (hasn’t happened to me yet in about six months) you can report the number with a description and it makes it into their database.

            I got so sick of spam coming from local area codes that I stopped answering calls from numbers not in my phone book. Until I missed a call from my dentist and missed my appointment. So I searched the android store and found an app called Hiya. Dumb name and there may be better, but no more annoying spam calls.

            Only trouble is they often leave messages, so I need to clear my voicemail about once per week (or when I get a legitimate call who leaves a legitimate VM).

          • 0 avatar
            Fred

            Everytime you get a scam call just add it to a contact, “Do Not Answer”

          • 0 avatar
            Vulpine

            In the case of my iPhone, Fred, I add such spam phone calls to a “spam” account that is set to not even trigger a ringtone. No ring means no answer even if they leave a message.

      • 0 avatar
        notwhoithink

        Me either. I had one the other week who called, asked for me by name, and then proceeded to tell me that the factory warranty on my car (she named the make and model) was expiring. I went off on her and told her to take me off their list. She told me that “you should know that there isn’t a list” and I suggested she go by a lottery ticket then because she apparently just dialed a number at random and successfully guessed my first and last name, as well as the year, make, and model of the vehicle that I owned. She hung up.

        • 0 avatar
          JimZ

          most cold-calling firms use auto-dialers. A computer picks a number from “the list,” dials it, and if you pick up it waits to hear you say something. then it connects you to a person who sees your name and info pop up on the screen.

          chances are the person “calling” you has no idea who you are or what your phone number is until you actually answer the phone.

    • 0 avatar
      notwhoithink

      Exactly. If you’ve got a new car and do all of the routine maintenance on it then you should be in pretty good shape. An extended warranty is something that you might consider on a used car.

      And you know that these things are profitable as hell because there’s dozens of different companies calling and sending letters about them.

  • avatar
    Land Ark

    “There are plenty of reverse payment calculators available online. Go plug in your monthly payment that you can afford, along with the interest rate you can expect to pay (more on that in a bit), and you’ll know how much car you can really afford to buy.”

    …and then just feel pretty crappy about how your aspirations just dropped from near-luxury to near-compact.

    Using those calculators always takes the wind out of my sails and stops me from shopping for a few days.

  • avatar
    FreedMike

    “She also could have used that $5,000 she had saved up to get a cosigned $5,000 car loan for an early model used car, and then paid it off nearly immediately.”

    That wouldn’t have helped much with a limited credit history.

    Your credit score is based on these factors, in a nutshell:
    1) Your payment history (including whether you have any derogatory entries)
    2) What percent of the amount you could borrow is actually being borrowed (utilization) – i.e., if you have $5,000 in available credit, what percent of that is actually owed?
    3) Length of time accounts have been opened (a big one).

    In other words, when you’re building a rating, the best move is to open a few accounts and pay on them for a year or more. Simply opening an account and then paying it off when you have no other entries is not going to work well – it’ll help somewhat but the types of accounts that really “speak” to lenders are ones that you’ve had for over a year.

    In case anyone’s interested, I underwrite mortgages and had to rebuild my credit pretty much from scratch after a divorce, so I’m finding this all out the hard way.

    Hints for building credit:
    1) Bark is right – get secured accounts. Or, if you don’t like the idea of a deposit, you can open one with a large annual fee (typically $75 or so). Use this limited credit on small purchases every month (i.e., lunches, filling up the gas tank, movies, whatever, keep the utilization under 10% (i.e., if your line is $500, don’t charge more than $50) and pay it off monthly. This is a no-risk proposition – the credit limit will initially be very low (a few hundred bucks) so unless you’re REALLY on edge financially, there’s no chance you’re going to end up defaulting. As your score improves, you’ll start getting far better offers from other card providers, so you can dump the nasty ones you originally were stuck with, which I was able to do.

    2) Get credit cards with the bank you do business with. Typically they’ll be a little more liberal with their terms if you’ve been with them a long time and haven’t gone on a rubber-check spree.

    3) Buy stuff like TVs, appliances or clothes on credit. There are a myriad of online and brick and mortar retailers that do credit accounts for people with no or bad credit. Fingerhut is a good example. Yes, they rip you off on the interest rate and sometimes the purchase price. But if your score is low, you’re going to pay too-high interest anyway. The question is whether you want to pay insulting interest on a $250 Kitchen Aid mixer for a year, or a $20,000 car over five or six years. The former is far more sensible.

    4) Know what types of accounts report on credit and which don’t. Depending on where you are, utilities DO report on credit (I see DTE Energy in Detroit and Peoples’ Energy in Chicago on credit reports all the time), so paying them on time is basically a score-building freebie. Cell phones, Internet, cable, and car insurance rarely report, if ever. Neither does Paypal credit.

    Basically, credit for those with no history these days is pay-to-play. You have to be prepared to put some skin in the game.

    • 0 avatar
      dingram01

      Sorry to hijack, but as one considering divorce, I hear this a lot — the need to rebuild one’s credit after a divorce. Without prying for personal details, would you mind explaining why this is often necessary? Is it a near guarantee that I too would have to do the same?

      • 0 avatar
        PrincipalDan

        Lots of lenders see you as “higher risk” cause you committed to something “the marriage” and then dun blowed it up.

        Life’s too short to be miserable, divorce is when you decide you’d be happier even after giving away half your $h!t.

      • 0 avatar
        notwhoithink

        When you get married you get joint responsibility for each other’s debts. Even in states where that isn’t the case you usually co-sign on each others cars, and the mortgage is in both of your names, as are credit cards, etc. When it comes time to get divorced you have to somehow get those debts divided up into what each person is going to be responsible for, and the reality is that most people live enough beyond their means with so little savings that the only way out of many of those debts is either via default or bankruptcy.

        I mean, if you’re a lender and someone has a loan with a co-signer, are you going to magically let the co-signer off the hook because they are no longer married? If you’re the lender you want to be able to go after as many people as possible for those debts, not fewer.

        • 0 avatar
          bikegoesbaa

          I don’t get why people co-sign on their spouses debts when they don’t have to. Seems to be all downside – is there an advantage to it that I’m not aware of?

          • 0 avatar

            They don’t know any better, or , they take cards in each name on one account, and the boilerplate has joint and several liability.

          • 0 avatar
            VoGo

            “I don’t get why people co-sign on their spouses debts when they don’t have to. Seems to be all downside – is there an advantage to it that I’m not aware of?”

            You don’t have to sleep on the couch, for one.

          • 0 avatar
            notwhoithink

            It’s still easier to get some things financed that way. My wife isn’t on my car loan, but I co-signed hers because I make a lot more more than she does and I have better credit. Considering that I’d be liable for it anyway in a divorce then there’s no real disadvantage to signing on it, but if it saves on the interest rate or makes approval easier then why not?

          • 0 avatar
            DenverMike

            You can get lower interest when a spouse co-signs. If they both sign as a couple, their FICO gets averaged together.

      • 0 avatar
        iantg

        Often times, if you’re considering divorce… there’s a good chance that your spouse has been doing things behind your back… like opening accounts in your name without telling you and then defaulting on those accounts after you leave and then you suddenly have this account on your record that you have no knowledge of.

        That said, once I got through the divorce and the aftermath… my life has been pretty darn good. I even remarried!(with lessons learned from the failed first marriage applied and an attitude of this is who I am and what I want, if you have a problem with that – there’s the door.)

      • 0 avatar
        FreedMike

        In my case, we had joint debts that Her Majesty was court ordered to pay through the divorce process (which took over two years to finalize…it was a nightmare) and didn’t. This, coupled with horrific upfront alimony, screwed me financially and did a real hospital job on my credit.

        But then again, my ex has been up twice on felony check fraud, so your results, as they say, may vary. If your ex is a financially responsible person, then this shouldn’t be an issue in your case. Mine is a leech and a fraudster so she didn’t care.

    • 0 avatar
      MBella

      Just about anyone with a pulse can get a Capital One card with a low credit limit and no annual fee. The APR might be low, but keep it payed off. Anyone that gets a secured card or loan is a sucker. Why would you pay someone interest to barrow your own money? The same goes for an annual fee on a credit card.

      • 0 avatar
        notwhoithink

        The key words being “just about”. If you have no credit history then that’s the easy way to go. If you have a negative credit history then that may not be an option.

      • 0 avatar
        FreedMike

        Sometimes those are the only options, MBella. And in that case you take the s**t deal, pay your dues, and dump the mooches when you can qualify for something better.

    • 0 avatar
      duffman13

      You’d be surprised how much people don’t think about shared expenses and how they impact things in a divorce. My wife and I had a conversation about this when some friends got divorced a few months ago. One was a coworker of mine who makes roughly what I do.

      She was puzzled on why the wife, who was a stay at home mom, had to move into a crappy apartment after the divorce, thinking alimony/child support should cover keeping her and the kids in the house. I explained that even if he gave her half his take home pay in that (a % that’s never the case nowadays) there is no way it would come close to the amount it would cost to actually stay in their old house. I told her to take a look at our monthly budget (which she wrote up) for proof. And oh by the way, he still has to pay for his own place to live plus utilities as well. When you consider a married couple generates economies of scale in rent/mortgage, utilities, and communications bills, that’s cause for significant expense growth upon splitting up.

      Specifically, divorce usually brings your rent to total household income ratio up much higher, which can be a key factor in determining credit risk.

      • 0 avatar
        FreedMike

        Rent isn’t something that reports on credit, so it doesn’t affect your score. In mortgages (my area of expertise), ability to pay rent is actually a compensating factor for credit.

        As I understand it, car lending is mainly FICO based, so it’s different.

        • 0 avatar
          duffman13

          I’ve heard of many deals where the dealership asked to report rent numbers compared to income. This might not be the case in all markets or lenders, but it can definitely affect approval if you’re toward the lower end of the credit spectrum.

    • 0 avatar
      redav

      The “making payments” is popular but false.

      Credit reports only identify if you are in good standing and paying as agreed. If you have a zero balance, then it’s reported that you are on-time and in good standing.

  • avatar

    Will you help me get an M2?

  • avatar
    CaptainObvious

    “At the end of the day, remember this: you’re not there to make friends.”

    This^.

    It took me a long time to figure this out. I consider myself a pretty easy going guy – and I really avoid getting into anyone’s face unless I get super pissed (Hulk mad!). So I always treated sales people nicely – but now that I know the “game” and have finally realized that – I WILL NEVER SEE THIS PERSON AGAIN. I have a different attitude. Not confrontational – just wary and reserved.

  • avatar
    Fred

    When I was buying my car I overheard 3 customers say first thing “I can afford $X a month. What can I get?” Obviously these folks just want as much car as they can get, with the minimum amount of effort.

  • avatar
    Vulpine

    Right behind you all the way, Bark.

  • avatar

    I feel the need to interject a story from my first year Contracts course in law school.

    Prof: Do you know what a cosigner is ?
    Class: Various Responses, some more accurate than others.

    Prof: You are all Wrong. -Raises Voice-

    A Co-signor is a SCHMUCK !! WITH A PEN !!!!

    He was right. If you co sign make sure you are ready, WILLING and able to make all those payments, no matter what you have been promised by the primary signator. (Spoiler Alert-No, they don’t have to sue primary first before bothering you. Any lawsuit will have your name on it up front. Also, no matter what, never, ever register a car in your name “for a friend”)

  • avatar
    Mr. K

    Someone has to do it:

    https://m.youtube.com/watch?v=6WTdTwcmxyo

  • avatar
    Mr. K

    Hard to argue with this list of cheep reliable cars:

    http://thegarage.jalopnik.com/ten-of-the-most-dependable-cars-you-can-buy-for-less-th-1775470397

  • avatar
    Waddy1969

    The author of this is only bashes dealers without even having facts only hearing someone’s interpretation of what happened. I sold cars before and when a customer buys a car they are given paperwork that they signed so why not look at that before running off at the mouth. The dealer could not discuss this with “the press” because they are not on the deal and he knows that. He works for AutoTrader a company who is supposed to support its dealers not bash them. Talk about a conflict of interest.

  • avatar
    zip89105

    Just avoid KIA Orlando West and problem solved. The dealership was only apologetic because they got caught, so F them.

  • avatar
    brenschluss

    Reading this article and its comments makes me feel extraordinarily lucky to have experienced what I have when buying cars. I went through it recently and the stars aligned to painlessly deliver me an acceptable deal. I could have pressed and knocked more off I’m pretty sure, but the initial offer was fair enough to not waste the time which would have been spent dickering. F&I even sprinted sheepishly through what they were obliged to offer, and were otherwise quick and accommodating. They made me happy, so I’m happy to make them a few bucks.

    That said, I had A) already spoken to the internet sales manager about B) a car in transit that they were probably dreading having on their lot C) at the end of March when there may have been some unmet target numbers, and D) while I’m not exactly a hardened pro, I’m not a Jenny, E) nor am I a member of any demographic typically taken advantage of.

    The only bad experience I’ve had in shopping around halfheartedly for the past couple of years was at a Toyota dealer, to try an FR-S, which seems to line up with other impressions I’m seeing:

    -brenschluss: So I’m not here to buy anything today, but I’d like to test drive the one FR-S you have on your lot.

    -Harried sales manager: Sure, gimme your license, here are the keys, go find it yourself.

    *disappointing test drive*

    -brenschluss: That wasn’t what I was hoping for!

    -Brain-damaged salesman: Yeah but it’s a cool car, huh? So [wrongname], what can I do to put you in this cool car today?

    -brenschluss: You can go f*ck yourself, and make it hurt!

    But that was the exception. All others I visited seemed to at least be trying to negotiate in good faith. There were a couple 4-squares involved, but I had a trade, a modest down payment, and did care about keeping monthly expenses reasonable so I can’t be too upset about that; I just didn’t like the deals I saw.

    I guess the point of this is that it doesn’t have to be so bad. I’m not an experienced haggler, but a little inherent distrust and skepticism, plus a lack of attachment and a willingness to keep shopping, seems to go a long way.

    Holy shit that’s long, I’m sorry.

  • avatar
    Compaq Deskpro

    August of last year, I bought a one model year old like new Challenger from a Chrysler dealer. I had no credit whatsoever. Vast majority of the banks the dealer sent requests to declined, Ally who is supposed to be the finance you if you can fog a mirror bank gave me 11% interest. I kept paying the exorbitant rate, up until a month ago where I refinanced with a credit union. Apparently my credit is so good they gave me 2% (the bank’s minimum is 1.74%), saving me around $120 a payment. Credit is easy to get, you just have to suffer through some hard payments and pay them on time.

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