finance application put in through ABC dealer

[Medical Student]

So my sister put in application in for financing through an auto dealer (used car). They told her that she was approved (she is credit *challenged*). The dealer said the bank was cap one and they could not tell her the interest rate until she put a $500 dollar NON-REFUNDABLE deposit down. So she said she has to think about it (not really - she will not do it without knowing the interest rate as that will depend on whether she gets the car or not). So, she called cap one and they told her that they can not giver her that information (even though it will be her loan???? really????????) and that she would have to call the auto dealer. The problem is as I stated, they will not contact the bank to determine the exact rate without a non-refundable down payment (again which is insane in my mind).

 

Is there any legal means by which the auto store has to tell her the interest rate (we are in NY they are in texas) before she puts the non-refundable down payment down, or any way to force cap one to tell her the interest rate for her own loan that was approved by them (through the auto dealer)? Also as a side note - she was approved for a cap one loan through the auto dealer but denied by cap one on her own application online.

 

any input would be immensely helpful.

Edited November 12, 2009 by Medical Student

[hurricanesfans27]

no they dont have to tell you the rate until they have a deal structured with collateral.

[mk_378]

There's really no such thing as a non-refundable deposit on a used car that's already on the lot. If you don't sign the final papers and don't take delivery of the car, they MUST give your money back.

 

But it would be nuts to pay anything before you know if the terms are acceptable. Shop somewhere else. Going to ads and "applying" on line or by phone is usually just putting yourself into a "lead generator" system. Then the dealer (who paid the company for the "lead,") calls you and says whatever you need to hear to get you down there in person to try to do the deal. Often there is no loan approval at all at the stage you're at. It's just a come-on to get you into the door of a particular dealer.

 

It's going to work a lot better to just go to a local dealer in person, see if they have an acceptable car, negotiate the price of that car, and then have them find a loan for it. I think that another dealer can use the approval (if it even really exists) as long as the car and the price is acceptable to Cap One.

[Medical Student]

Thanks for the input. I thought it was insane that she would lose the money if she were to put it down.

 

I really think there is nothing more frustrating than purchasing a car I felt like a fish in a barrel when I got mine and I think she feels the same.

 

Just to state what it was it was a wholesale dealer who we applied through directly. She was approved at two other dealerships (one of which I have to go sign papers since I put her deposit down) stating that we do not want to accept the car. Do I really have to sign papers to get my deposit put back on my amex?

Edited November 12, 2009 by Medical Student

[MarvBear]

Is there any legal means by which the auto store has to tell her the interest rate

 

Yes, it would be on the MVRISA in the Fed REG Z Box.

[Medical Student]

MVRISA Fed REG Z Box-> Motor Vehicle Retail Installment Sales Act

 

reading up on it now. Thanks for the responses.

Edited November 13, 2009 by Medical Student

[MarvBear]

 

Fed Reg Z box looks similar to this on most contracts.