Bank Question About Car Financing

[bravesfan]

We closed on a vehicle about 2 weeks ago. We got a call from the salesman that sold us the vehicle asking us to come back in. He states the bank wants us to sign papers and that our payment will be lower. I have never had this happen. I thought once you closed a loan that was it. I am not complaining about a lower payment...just never happened before.

 

Does anyone think this is strange or have any experience with something like this?

[CTSoxFan]

I have heard of cases where people have had to come back because the dealer couldn't end up getting the contract funded and people had to return the vehicle, but it doesn't sound like this was the case.  Maybe they planned on funding it through bank "A" and couldn't for some reason and now had to switch to bank "B" and need you to sign something (or maybe bank B is offering them a better incentive).  I honestly don't know that side of the business well enough, but Marv does and I am sure he can provide clarity.

 

In any case, I would be reading the document EXTREMELY closely to be sure none of the terms have changed, or if they have that it is a change in your favor. 

[cv91915]

Sounds like the originally-intended finance company/bank wouldn't take your deal, and now the dealer needs to get your loan placed with another finance company at a higher cost.   

 

I will bet that your new "lower payment" will be for a longer term than you originally agreed.   

Edited May 10, 2019 by cv91915

[MarvBear]

I've had to do this before when nobody would listen to me. Kept saying sorry is too high. Sure enough it was and customer had to resign. If the apr is the only thing that changes the only number you really need to check is the total amount financed on the new contract. It Shou k d be exactly to the only the same as the old contract.

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[centex]

As CT, CV and Marv note, review the new documents CAREFULLY.  The terms should be identical as relates to the amount being financed and the number of months for which payments will be made.  Ensure there is no balloon payment due at the back-end. 

 

If they are trying to raise the APR and spread payments out or stick you with a balloon payment, then be prepared to let them have the vehicle back and demand your trade be returned to you (if there was a trade as part of the original deal). 

 

I've never seen this occur, but then again, most of my financed purchases were something where I had my own financing in hand when I arrived at the dealership and was not relying upon the dealership to get a deal done on the financing.

[purplegurl1920]

Yes, read the fine print. Make sure they didn’t make the term longer. Hence, the lower payment.


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[mk_378]

When the dealer says they can't honor a deal as signed it is then your choice to sign the new deal that is offered, or "unwind" the deal and return the new car.  In that latter case they have to give back your trade in car and / or down payment money, all of it.

 

Like everyone else said, when it's a new deal make sure nothing has increased.

[bravesfan]

Sorry it has been a little bit since I originally posted and responding. What had happened was that when we originally signed the dealership added GAP. The finance company said it wasn't necessary and they removed it which would have reduced the payment about $40/month.

 

We were going to sign the new documents...but we discovered that the dealership had the vehicle listed on their website was for around $5,000 less than the sale price on the Original Sale Price. We questioned the dealership about it and they pretty much said it was the cost of doing business with a high risk Customer. They said the reason that it was much higher was a cost the bank/finance company charges them to take the loan. Have no idea if that is true or not. They wouldn't budge and offered us the opportunity to return the car and cancel the deal...which is what we did.

 

With the high interest rate...the finance charges would have been almost double the Original Sale Price. We are really fortunate to be able to walk away from this deal and I need to pay attention more carefully and not get caught up in just taking the deal b/c we got an approval. I know they have several deals appearing across their desk and they are trying to expedite the process with sign/initial here and here and so on...but I should read the numbers rather than just sign and trust them. Lesson learned with this one.

[cv91915]

I'm so glad to hear that you were able to unwind from that.  

 

By itself the $40 a month for GAP almost made me throw up my lunch.

 

Best wishes as you find a more reasonable option.

[CTSoxFan]

54 minutes ago, bravesfan said:

Sorry it has been a little bit since I originally posted and responding. What had happened was that when we originally signed the dealership added GAP. The finance company said it wasn't necessary and they removed it which would have reduced the payment about $40/month.

 

We were going to sign the new documents...but we discovered that the dealership had the vehicle listed on their website was for around $5,000 less than the sale price on the Original Sale Price. We questioned the dealership about it and they pretty much said it was the cost of doing business with a high risk Customer. They said the reason that it was much higher was a cost the bank/finance company charges them to take the loan. Have no idea if that is true or not. They wouldn't budge and offered us the opportunity to return the car and cancel the deal...which is what we did.

 

With the high interest rate...the finance charges would have been almost double the Original Sale Price. We are really fortunate to be able to walk away from this deal and I need to pay attention more carefully and not get caught up in just taking the deal b/c we got an approval. I know they have several deals appearing across their desk and they are trying to expedite the process with sign/initial here and here and so on...but I should read the numbers rather than just sign and trust them. Lesson learned with this one.

Glad you were able to get out of this.  These types of deals are what keep people who have have fallen down stay down.  $480/year for GAP insurance is insane.  I pay ~$60 for it on my car, and that is a brand new car with a $85k sticker.  An upfront gap policy should be around a few hundred dollars, you would've been paying over $2,000 (assume it was a 5 year loan).

[bravesfan]

6 hours ago, CTSoxFan said:

Glad you were able to get out of this.  These types of deals are what keep people who have have fallen down stay down.  $480/year for GAP insurance is insane.  I pay ~$60 for it on my car, and that is a brand new car with a $85k sticker.  An upfront gap policy should be around a few hundred dollars, you would've been paying over $2,000 (assume it was a 5 year loan).

It was 72 months. I was told that GAP has a ceiling and there is a chance that if you had to make a claim that you could still end up owing with a high interest loan.

[cv91915]

11 hours ago, CTSoxFan said:

Glad you were able to get out of this.  These types of deals are what keep people who have have fallen down stay down.  $480/year for GAP insurance is insane.  I pay ~$60 for it on my car, and that is a brand new car with a $85k sticker.  An upfront gap policy should be around a few hundred dollars, you would've been paying over $2,000 (assume it was a 5 year loan).

 Is this on a leased BMW?  I've read that BMWFS includes GAP in all its leases.

[CTSoxFan]

3 hours ago, cv91915 said:

 Is this on a leased BMW?  I've read that BMWFS includes GAP in all its leases.

Financed (through your favorite place, enn eff see you), and yes BMW does include GAP on their leases.  Having leased 6 of them, I am sure of this.

Edited May 21, 2019 by CTSoxFan

[CTSoxFan]

9 hours ago, bravesfan said:

It was 72 months. I was told that GAP has a ceiling and there is a chance that if you had to make a claim that you could still end up owing with a high interest loan.

Amazing a 72 month note, I am guessing at double digit interest rate wasn't enough, they have to gouge you for another $2800 for GAP insurance...unreal.

 

I have never heard of GAP coverage having a ceiling, unless maybe you were financing over 100% of the msrp/nada value and the policy only covered up to 100% of the value?

 

Either way, for future reference, you can probably get it from your insurance company for a hell of a lot cheaper (I say probably because I am not sure if all carriers offer it).  Plus once you have reached a point where the equity>loan you can just drop the coverage...much easier than trying to get a prorated refund from the initial insurer.  Plus you get an auto insurance renewal every 6/12 months so it is another reminder to see if it is worth carrying the coverage. 

[cv91915]

1 hour ago, CTSoxFan said:

Financed (through your favorite place, enn eff see you), and yes BMW does include GAP on their leases.  Having leased 6 of them, I am sure of this.

Thanks for confirming.  I'm inching closer to a BMW lease... 

[tmkats]

15 minutes ago, cv91915 said:

Thanks for confirming.  I'm inching closer to a BMW lease... 

Let me know what you decide to do.  I'm coming up to my mid life crisis point and hate my Hyundai.

 

Considering one of the X's as I'm pretty sure that I am done with Sedans.  DW wants me to be more reasonable and get a Toyota or Nissan, but what does she know? LOL.

 

Sorry to hijack.............

[cv91915]

45 minutes ago, tmkats said:

Let me know what you decide to do.  I'm coming up to my mid life crisis point and hate my Hyundai.

 

Considering one of the X's as I'm pretty sure that I am done with Sedans.  DW wants me to be more reasonable and get a Toyota or Nissan, but what does she know? LOL.

 

Sorry to hijack.............

I created a thread in the General Discussion Forum for all things automotive.  

 

I'm getting close to establishing a direction and will post updates over there.

 

OP, sorry for derailing your thread.  I want to reiterate how happy I am that you were able to get out of this awful deal.  As I said, best wishes on the next step!  

[CTSoxFan]

2 hours ago, tmkats said:

Let me know what you decide to do.  I'm coming up to my mid life crisis point and hate my Hyundai.

 

Considering one of the X's as I'm pretty sure that I am done with Sedans.  DW wants me to be more reasonable and get a Toyota or Nissan, but what does she know? LOL.

 

Sorry to hijack.............

The wife is currently in a X3 m40i.  Best SUV I have ever had (I have had a Jeep, 2 X5s, a Lexus RX350 and driven others).  If you have any BMW leasing questions I have done a ton of them, feel free to PM or start another thread so we don't continue to threadjack.

[bravesfan]

UPDATE: We got the Title to the Jeep that we returned. It shows no Lienholders. I am wondering why we got this. I would have thought that it would have went to the Lienholder first b/c we didn't pay cash for it.

 

I don't know what to do from here. Do I call the Dealership? I don't know if this will cause a problem for whomever they may have sold the Jeep to after we returned it. Does anyone know if I need to do anything with this Title that we received today?

[MarvBear]

Send or take it back to the purchase store.

Georgia is an ELT state since I believe 2009.