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Without A Good Credit, Financing May Take You On Wild Ride!Oct 28 '00 Write an essay on this topic.Advice from an industry insider and from a friend's experience: Between you and financing agencies exist huge profits for the car sales person if you did not do your homework. Their key phrase is that they are going to tell you that's the best rate they could find from the financing agency. What they don't tell you is that they have marked up the vehicle price. Well, there is lots of room for fraud since we, consumers, end up trusting these sharks to negotiate on our behalf. For example, if the bank or financing agency agrees to finance you at 8.25 % based on your good credit report, the car sales person is not going to tell you this good news. NO, No, No,! Once they receive this information, they keep and increase the rate. And guess what? The difference between the true rate and the fraudulent rate is more money for them How to avoid being taken advantage of A good friend needed a car to go to college. She did not have a good credit. So her parents attempted to assist her. They themselves were somewhat in the same situation. What my friend who was from an ethnic minority did was that she researched the vehicle she wanted to purchase. She had a good idea of the amount she should pay. With a good down-payment, she was sure to get a so-so, comfortable financing from these banks that will take risks. She was ready to accept up to 12, 13 or 16 % if needed. Her parents then went to their bank to get a loan for her. When she reported to the Mitsubishi dealership, she talked to the car sales person who was too eager to sell to female client. In hindsight, my friend later told me that she should have taken her brother or father with her to the dealership. That very night, she signed all the papers and was satisfied with the rate she was given. Then two days later, the car sales person called her to announce a mistake was made and that she could not have the car for that total price. What may have happened in the meantime? The car sales person saw that he had her in his hands. He had her hooked on her burgundy Mitsubishi. She was ready to fight the shark with his increase. She was told that the bank agreed to finance the car two days after for 18 1/2 %. Can you imagine all the money that was going to his pocket? The lessons of this story are: As much as you can, try to secure your own loan from your bank or a credit union. The moment you let the car sales person handle your financing, you are in danger. You will be ripped off. Well, you will never know why the car payment can be so expensive. At times, it can more expensive than anything else you have purchased, including a house. And if you know a friend in the industry, try to get as much information as you can from him/her. Manage your own finances when purchasing a new vehicle. Car sales people are not on your side. They only look at their pockets size! Ever wondered why you still have to go to a dealership to buy a new vehicle? Despite the openings and the direct contact with consumers in many industries, the car industry compels you to go through a dealer who will rip off your neck. What's a consumer to do in such a situation? Be informed and be ready to fight off sharks! The dealership franchises have strong lobbyists who want the status quo. In the meantime, we, consumers, continue to be ripped off in the name of good business. In a time when the BIG Auto Manufacturers are talking about being online and being close to customers, we still have to go to dealerships. Why can't we order a car online and receive it just like any other package delivery? Just food for thought!  |
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