Comments on: Part 6 of the car debacle http://www.iwillteachyoutoberich.com/blog/part-6-of-the-car-debacle/ Personal finance blog for college students, recent graduates and everyone else -- including entrepreneurship -- for getting rich. Featured in the Wall Street Journal and New York Times. Tue, 16 Mar 2010 17:35:08 -0700 http://wordpress.org/?v=abc hourly 1 By: Herb Overstreet http://www.iwillteachyoutoberich.com/blog/part-6-of-the-car-debacle/comment-page-1/#comment-4565 Herb Overstreet Sat, 10 Feb 2007 00:28:28 +0000 http://www.iwillteachyoutoberich.com/blog/part-6-of-the-car-debacle#comment-4565 Hey Ramit: Did you receive my email on this topic? Email me and say you didn't and I'll resend it. Cool site. And a mention in the NYT. Wow. Hey Ramit:

Did you receive my email on this topic? Email me and say you didn’t and I’ll resend it.

Cool site. And a mention in the NYT. Wow.

]]> By: Steve Johnson http://www.iwillteachyoutoberich.com/blog/part-6-of-the-car-debacle/comment-page-1/#comment-4501 Steve Johnson Thu, 08 Feb 2007 22:51:21 +0000 http://www.iwillteachyoutoberich.com/blog/part-6-of-the-car-debacle#comment-4501 It's probably way too late for this to have any chance of working, but there is one tactic that can occasionally work in situations like this. Dealerships rarely carry their own contracts. They are nearly always sold to the financing institution (like a local bank, Chrysler Credit, GMAC, Ford Motor Credit, etc.). One can call up the financial institution, bypassing the dealership entirely, and tell them that 'yes, I realize this is a contract and it's legal. BUT--the dealership hoodwinked me and I can NOT afford this payment. If you buy this contract, I will NOT make the payments. I know I will be stuck with penalties and all kinds of stuff, but I simply cannot do it.' Financial institutions are not really wanting to buy a contract that will go into default right out of the box. They lose, and it costs the dealership nothing, as most contracts from big dealers are purchased on a 'non-recourse' basis, meaning that once the contract is funded, the FI has no recourse against the dealer . Another way to contest an obviously outrageous contract is to threaten the dealer with action through the Attorney General's office alleging improper disclosure of contract terms. There is a box on the contract that states the amount borrowed, rate, etc., and it MUST be covered with the borrower by federal law. A lot of F & I guys will gloss over this section of the contract so the borrower doesn't get scared. If that happens, then the borrower does have a little bit of recourse--the basis of a threat, if nothing else. It’s probably way too late for this to have any chance of working, but there is one tactic that can occasionally work in situations like this.

Dealerships rarely carry their own contracts. They are nearly always sold to the financing institution (like a local bank, Chrysler Credit, GMAC, Ford Motor Credit, etc.).

One can call up the financial institution, bypassing the dealership entirely, and tell them that ‘yes, I realize this is a contract and it’s legal. BUT–the dealership hoodwinked me and I can NOT afford this payment. If you buy this contract, I will NOT make the payments. I know I will be stuck with penalties and all kinds of stuff, but I simply cannot do it.’

Financial institutions are not really wanting to buy a contract that will go into default right out of the box. They lose, and it costs the dealership nothing, as most contracts from big dealers are purchased on a ‘non-recourse’ basis, meaning that once the contract is funded, the FI has no recourse against the dealer .

Another way to contest an obviously outrageous contract is to threaten the dealer with action through the Attorney General’s office alleging improper disclosure of contract terms. There is a box on the contract that states the amount borrowed, rate, etc., and it MUST be covered with the borrower by federal law. A lot of F & I guys will gloss over this section of the contract so the borrower doesn’t get scared. If that happens, then the borrower does have a little bit of recourse–the basis of a threat, if nothing else.

]]> By: Me, Myself and Money http://www.iwillteachyoutoberich.com/blog/part-6-of-the-car-debacle/comment-page-1/#comment-4316 Me, Myself and Money Sat, 03 Feb 2007 10:28:23 +0000 http://www.iwillteachyoutoberich.com/blog/part-6-of-the-car-debacle#comment-4316 Boy, you are stretching this car debacle thread too much!! Lets have some finance posts (sorry, I don't mean to sound rude) Boy, you are stretching this car debacle thread too much!!
Lets have some finance posts (sorry, I don’t mean to sound rude)

]]> By: Jennifer Lynn http://www.iwillteachyoutoberich.com/blog/part-6-of-the-car-debacle/comment-page-1/#comment-4315 Jennifer Lynn Sat, 03 Feb 2007 09:09:00 +0000 http://www.iwillteachyoutoberich.com/blog/part-6-of-the-car-debacle#comment-4315 ... *is speechless* In fact, this ordeal is so blatantly disturbing that it just crashed my system hmph =^..^= … *is speechless*

In fact, this ordeal is so blatantly disturbing that it just crashed my system

hmph =^..^=

]]> By: Cazi http://www.iwillteachyoutoberich.com/blog/part-6-of-the-car-debacle/comment-page-1/#comment-4314 Cazi Sat, 03 Feb 2007 03:32:26 +0000 http://www.iwillteachyoutoberich.com/blog/part-6-of-the-car-debacle#comment-4314 I would have to say "John's" best course of action if he doesn't get a new loan is to definitely set up automatic payment for his car payment. To prevent any forgotten or late payments. (And if possible pay $50-100 more than the minimum). I would have to say “John’s” best course of action if he doesn’t get a new loan is to definitely set up automatic payment for his car payment. To prevent any forgotten or late payments. (And if possible pay $50-100 more than the minimum).

]]> By: y. http://www.iwillteachyoutoberich.com/blog/part-6-of-the-car-debacle/comment-page-1/#comment-4313 y. Sat, 03 Feb 2007 03:10:33 +0000 http://www.iwillteachyoutoberich.com/blog/part-6-of-the-car-debacle#comment-4313 It is not necessary to build your credit history or have credit cards. If you don't have the money, don't buy it. If you need a car, save up and buy something super-cheap. Then save up some more, and upgrade. If you want to get a mortgage, you can get a mortgage with manual underwriting instead of a mortgage based on a credit score. It is not necessary to build your credit history or have credit cards. If you don’t have the money, don’t buy it. If you need a car, save up and buy something super-cheap. Then save up some more, and upgrade.

If you want to get a mortgage, you can get a mortgage with manual underwriting instead of a mortgage based on a credit score.

]]> By: Casey http://www.iwillteachyoutoberich.com/blog/part-6-of-the-car-debacle/comment-page-1/#comment-4312 Casey Sat, 03 Feb 2007 00:20:40 +0000 http://www.iwillteachyoutoberich.com/blog/part-6-of-the-car-debacle#comment-4312 I only buy cars from a dealership whose stated policy is that they only charge $500 over what they paid for each car. They will not negotiate price at all. Their prices are always well below kelly blue book, which is why I believe them. They also do not offer any financing so you have to arrange outside financing. It's been a great way to buy cars. They don't sell any sexy cars--only used, clean title, Hondas, Toyotas and Nissans mostly. But we all know what sexy gets us, don't we? Just ask John. I only buy cars from a dealership whose stated policy is that they only charge $500 over what they paid for each car. They will not negotiate price at all. Their prices are always well below kelly blue book, which is why I believe them. They also do not offer any financing so you have to arrange outside financing. It’s been a great way to buy cars. They don’t sell any sexy cars–only used, clean title, Hondas, Toyotas and Nissans mostly. But we all know what sexy gets us, don’t we? Just ask John.

]]> By: Wei http://www.iwillteachyoutoberich.com/blog/part-6-of-the-car-debacle/comment-page-1/#comment-4311 Wei Fri, 02 Feb 2007 19:43:07 +0000 http://www.iwillteachyoutoberich.com/blog/part-6-of-the-car-debacle#comment-4311 I don't think he's learned anything. So instead of paying $15k on a $9k car, he's now going to pay $28k on a $19k car? I can just picture Peter Griffin saying "Yeah... I'll give them more money. That'll show em." I don’t think he’s learned anything. So instead of paying $15k on a $9k car, he’s now going to pay $28k on a $19k car?

I can just picture Peter Griffin saying “Yeah… I’ll give them more money. That’ll show em.”

]]> By: K http://www.iwillteachyoutoberich.com/blog/part-6-of-the-car-debacle/comment-page-1/#comment-4310 K Fri, 02 Feb 2007 14:55:18 +0000 http://www.iwillteachyoutoberich.com/blog/part-6-of-the-car-debacle#comment-4310 Well, good for John. I give him credit for standing up and taking responsibility for his own actions, instead of going the "poor me" route. Successful people take responsibility. And if he can learn from his mistakes (including the mistake of not asking for help) and apply these learnings to future decisions, I think he'll take away from the lesson more than he lost. Well, good for John. I give him credit for standing up and taking responsibility for his own actions, instead of going the “poor me” route. Successful people take responsibility.

And if he can learn from his mistakes (including the mistake of not asking for help) and apply these learnings to future decisions, I think he’ll take away from the lesson more than he lost.

]]> By: Matt http://www.iwillteachyoutoberich.com/blog/part-6-of-the-car-debacle/comment-page-1/#comment-4309 Matt Fri, 02 Feb 2007 00:17:31 +0000 http://www.iwillteachyoutoberich.com/blog/part-6-of-the-car-debacle#comment-4309 FFR, anyone who is thinking of buying a new car or the like, head over to <a href="http://www.carbuyingtips.com" rel="nofollow">http://www.carbuyingtips.com</a> first, to if anything, understand how the processes work many times...so you don't end up making an ignorant decision like this (not that you would now, but something similar). FFR, anyone who is thinking of buying a new car or the like, head over to http://www.carbuyingtips.com first, to if anything, understand how the processes work many times…so you don’t end up making an ignorant decision like this (not that you would now, but something similar).

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