Reader Falls Victim To Spot Delivery Dealership Scam

Andriy writes:

It seems as I’m falling a victim to a Yo-Yo Car Financing | Spot Delivery Scam from a car dealer…

I purchased a new Toyota (scion) vehicle at a dealership exactly 2 weeks ago. I drove away. The total price was $20600 – I left a $500 down-payment. 13% APR in my contract. $470 payments for 60 months. Finance manager pressured me into purchasing GAP and extended warranty (around $2100 total) saying that banks would likely grant me a loan if I show them I’m serious about investment. Well, my credit is sub-prime (620 FICO) with few accts that are almost falling off and 2 recent ones for a few hundred bucks. But I still smelled something fishy though…

To make a long story short – last Friday, finance manager called me and told me he wasn’t able to obtain financing through 5 banks. I told him I had a blank check from Capital One, that I’d be willing to use after verification process – so I’m working on that now. He said that’s fine. But he also asked if I could put more money down, to which I said “NO”, explaining that my rent and other monthly expenses need to be covered. I’m in the process of repaying debts to my friends, so I’m not able to put more money right now.

My question is – what happens if Capital One doesn’t finance? Am I correct believing that I’d have to return the car back to the dealer? Will they refund my $500 down payment? What about car not being new anymore and having 1300 miles. I heard about dealers asking to bring car back before – but not sure how the process goes. I have that long contract on my hands with APR and payments, etc. – and it says Toyota Motor Finance. I actually don’t mind bringing car back to punish them *they knew what my credit was like*, I’m just worried about down-payment. I think they’ll try to pressure me into higher APR / payment situation. Do you know what the proper course of action is?

That sucks and they’re totally tying to scam you. Check out this site for more info. Honestly, your best bet is to take the car back and get your deposit back. Sorry boys, guess the deal didn’t work out. If they say no, tell em it’s either one of two ways: either one, you, Andriy, own the car and will pay the financing based on the terms offered, or 2, Andriy doesn’t own the car and so here it is, thanks for the free ride, give me my money back or I’ll sue you in small claims court. You should go for returning the car, as those financing terms are a disgusting ripoff.

Great advice,

Thanks Ben. I just spoke to a friend’s brother (who was a Toyota selling guy for 10 years) and he told me that I was scammed and that I should a) do what you suggested + cancel my gap and extended warranty.
The only thing I’m not clear about is the deposit – actually it’s not big by any means (but 500 is 500) and I did put 1200 miles in 2 weeks – so I’m wondering whether they’ll try to charge me. I actually realize that it doesn’t make sense to them to take the car back, since it’s not officially new.
I’ll keep you posted. Have a great holiday season!
My only concern left is whether: A) I should arrange my own financing (possibly with higher APR) – I really don’t want that and I think I could live without a car for few weeks till I get something else.

-Andriy

Well like I said, either you own it, or they own it. So they have to take it back. If they try to snake your deposit, fight tooth and nail for it back. Hell, tell them your old pal is the editor of the most popular consumer rights site on the internet with over 9 million pageviews per month and we will drop the wreckage on their asses.

As for your next car, ever think about driving a used beater? There’s a concept we enjoy on the site called, “don’t buy what you can’t afford,” which is to say, avoid going into debt. If this is too hard, and you do go through a dealership, come with your own financing, i.e., arrange your financing with your bank or credit union first and walk in with that.

Actually, that’s the reason I don’t want to keep the car. With 3 monthly payments I could get a 10-15 year old Honda….Traffic is so bad around DC that I realized that I’m not driving as much as I thought I would.
I guess I could loose the deposit, but that’s better than overpaying $8000 in interest on a $17k car. I’ll see how the developments will go. That old pal editor – is a powerful thing anyway. I just sort of feel bad, cause the finance manager seemed so be willing to help me, etc. I guess they have to pretend friendly. Actually spot delivery is something big in MD – Here the say that MD MVA (DMV) doesn’t permit temp tags – “

“Temporary registration permits, or certificates and plates, may not be used by dealers in cases where vehicles are released to potential purchasers prior to consummation of a vehicle sales transaction. These types of transactions are commonly referred to in the industry as “Spot Delivery,” “Fronting” “Macarthur Statement,” etc.
I guess it’s just a lot of stress, etc. I’ll try calling the manager and let me know what’s going on. The only thing I’m worried about is that he doesn’t mind me getting my own financing.

(Photo: Vince Brown (attila))

Comments

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  1. joeblevins says:

    Actually, I would get out of it no matter what at this point. Forgive me for pointing this out, but why are you buying a new car anyway? You can get a perfectly servicable vehicle for 5-6k that you could better afford. Then in a year or so when you have your FICO above the scary level, upgrade.

    Once the dealership started to screw you, like the GAP thing, you need to back out. GAP is available from your own insurance company most of the time anyway, for MUCH cheaper.

  2. Sucko-T says:

    Scions come with a warranty, unless your planning on keeping the car for more than a decade it probably wasn’t worth it.

  3. remusrm says:

    give teh car back… simple… get ur car back… if they do not give it back to you call the cops… they only loose money… that intrest is high, even for my 580 credit score

  4. eltonito says:

    Take the car back and be done with it while you can. Do it now, don’t try to keep the car. Get the GAP back and the extended warranty.

    Financing $20,000 at 13% is highway robbery and you’re only shooting yourself in the foot financially if your credit is only so-so. By my calcs, your payment is around $455 a month and you’ll end up paying over $7000 in interest in only 5 years.

    You are paying over $27,000 for that car, it is not worth it.

    If 13% is the best rate you can get (which they claim you can’t) then you should buy something much more affordable and revisit the car situation when your credit is better, you have more cash to spend and your APR is more agreeable.

    Trust me, dodge this bullet now and in 2 years when you are in better fiscal shape you can buy a sweet car on your own terms and feel much better about it.

  5. eltonito says:

    Heads up, the link the Lemon Law isn’t functional.

  6. privatejoker75 says:

    consider this a blessing in disguise and return the vehicle asap. 13% is robbery. If your credit is that bad then work on getting it straightened out instead of financing a new car at twice the interest rate that it should be

  7. Egakino says:

    @joeblevins: Agreed, damn you for posting my thoughts before me.

    Easy solutions to simple questions. Hey I can’t afford this car, should I still try even though they are scamming me? Ummmmmm noooo. Not a hard solution to buy used, I have never had a new car in my life.

  8. mom22bless says:

    Yeah I would consider it a blessing. You shouldn’t be buying that much CAR. Save 5-6 K and get a used one. 11% id stupid.Return it tomorrow!! Get out while you can.

  9. parad0x360 says:

    $470 a month for a scion…damn who would pay that for those fugly cars? Sorry, the TC isnt bad but the rest…horrid.

    You should never have taken the car without having the deal set in stone. Its not worth the risk these days. Also why did it take them 2 weeks to call? Normally they should know if you were approved or not by the next day even if they have to hit up 5 banks.

  10. gingerCE says:

    Get out of this deal. You can’t afford the car. Buy a used car for cheap elsewhere.

    However, because you used the car (from a new car) they’re gonna go after you for some money even after you return the car to them. Your deposit is gone and honestly, not worth fighting for. If they let you out of this deal for $500, consider yourself lucky and leave–but I don’t think they’re gonna stop at $500.

    When you say you have a blank check from Capital One–are you talking about a credit card advance check? You have a credit limit of over 20K with Capital One? This sounds bad from both sides–stop and get out of this deal asap.

  11. bswinfor says:

    Give the car back and go to a GM dealer. They’re so desperate to make a sell that when I bought my Saab this summer, I was offered a car with $3000+ options instead of the base manual that I wanted for the same price. Thanks to incentives and such, I paid less for the Saab than I would have payed for a Fusion or Accord equipped to my standards. All that on a credit score befitting a recent college graduation that lived off of credit cards for three years.

  12. gingerCE says:

    Wait a minute–you put 1300 miles on a car in 2 weeks?

  13. supra89t says:

    If you look through your paperwork, you will probably find a form called something like “Bailment and Revision Agreement”. You signed it. Read this. It basically states that your financing is not actually approved when you took delivery of the car but that the dealer expects that they can get your financing approved at the terms on the contract. If they are unable to do so, you have the option of signing the new contract with the corrected terms OR you can return their vehicle, with a catch. You are liable for any damage, excess wear and tear and excessive miles. Any mileage driven over the amount specified (usually a miles per day allowance) will cost you $X amount. They will probably take that money out of your down payment before refunding it.

    You say you bought it exactly 2 weeks ago and have driven 1300 miles. Many dealerships use 20 miles per day as the allowance. At 14 days, that’s 280 miles. You may be responsible for the cost of the additional 1020 miles @ around $.25 per mile = $255 or so that you will *legally* owe the dealer.

    Good luck, man. Its a tough spot to be in. I *always* tell people to get pre-approved (at a minimum) at their own bank before going shopping. This accomplishes a couple of things: now you know your exact rate and the amount you have to stay under. If the dealer can offer a better rate, take it.

  14. warf0x0r says:

    “Andriy doesn’t own the car and so here it is, thanks for the free ride, give me my money back or I’ll sue you in small claims court.”

    Can he still do that? Almost all car contracts have a binding arbitration clause these days.

    Anyone know?

  15. latemodel says:

    I think you would be wise to get out of the deal if you can, but if you go in there and start complaining I think they would just settle for the initial screwjob and give up going for the extra-special screwjob, and let you pay the 470. I would approach them with the intent of drawing up a NEW contract, then drop the warranty and gap coverage, and insist on a new, lower APR, and when they refuse, just walk. I think you owe them rental car rates for the use of their car which could be $.45 cents per mile. Losing the $500 would be cheap IMO.

  16. theysaidwhat says:

    Report this dealer to Toyota US HQ, to Toyota Motor Finance, and BOTH of them to your local Better Business Bureau, regardless of what you decide to do to get yourself out of this. They are yanking your chain and trying to scam you. At least try to protect the next poor fool who walks into that dealership.

    With my first Saturn, a car I loved BTW, I had some issues with the local service dept jerking me around when they damaged my car while it was in for a warranty repair. Every time I brought it in for them to fix the last thing they messed up, they managed to break something else. I called Spring Hill TN and they got it straightened out darned quickly, since Saturn is supposed to be all about a good customer experience. Both the local dealership and the Spring Hill office followed up with me repeatedly to make sure things were put right. (I had told the local guys that I had called Spring Hill, and that I would call them again to let them know the issue had been resolved if it ever got resolved. And I kept my word.)

    It was resolved well enough and quickly enough that I bought my second Saturn 10 yrs later(a different state and dealer since I had moved 3 times by the time a needed a new car). Hope to drive this one for 10 yrs as well.

    But do tell Toyata US HQ–this is NOT the image they hope to promote. They’ll give the dealer a major headache over this, I’m sure.

  17. theysaidwhat says:

    @warf0x0r: It should be spelled out in his contract. Some brands, like Saturn, have a 30 day return policy on the car, believe it or not.

    But I’d agree it’s more likely that they will charge the guy some sort of rental/mileage fee.

    It should all be in his contract.

  18. castlecraver says:

    Finance manager pressured me into purchasing GAP and extended warranty (around $2100 total) saying that banks would likely grant me a loan if I show them I’m serious about investment.

    A new car is not an investment. It is a good that depreciates in value. I’m unsure if using the word “investment” is just due to common ignorance on the part of the finance guy, or the fact that the word “investment” makes it sound more like a smart and rational financial decision.

    It is not. You cannot afford this car.

    If purchasing GAP seems smart, you cannot afford the car. Said another way, if you cannot afford the loss due to depreciation, you cannot afford the car.

    Also, if you need to purchase an extended warranty, you may need to reconsider the overall value of the car and it’s reliability. There are likely other options out there with better warranties.

  19. socalrob of the 24 and a half century says:

    I have to say it, its the gamer in me, You got PwNeD!

    I just bought a used car with only 3k miles on it and less than a year old, thats a full size sedan and paid after tax and license the same that you did and only had an 8% interest rate.

    You sir chose a car that is too popular for your own good. Also 1200 miles in 2 weeks? You picked the wrong car for that. Do like someone mentioned and get a used car with 20k miles on it or something. You should be able to get it for less than half that price.

  20. Pylon83 says:

    I guess there really is a sucker born every minute. This guy has done everything wrong. First off, he clearly should not be shopping for a car on his own. He let the sales guys do what they do and sold him more than he wanted and more than he could afford. What in the world is a person deep in debt, with bad credit, who owes people money doing buying a brand new $20k car? Not to mention the excellent interest rate he agreed to. Seriously, 13%? I could put that car on my credit card at nearly 1/2 that. I just don’t understand the logic (or lack thereof) that some people employ in their daily lives. I don’t see how he got “scammed” by the dealership. They didn’t make him buy the car. I’m sure all the terms are spelled out in the sales contract that I imagine he neglected to read. It’s really saying something when a car dealer, who has significant pull with the banks, can’t get you approved for a loan, even at that kind of a rate. The OP has no business buying a car right now, especially a new one. I suppose it’s all about keeping up appearances anymore, which is probably what got him into the unmanageable debt that resulted in such a poor credit score. While I think the dealership did take advantage of him, I don’t think they scammed him. They are not supposed to be baby sitters. They sell a product. If someone comes in wishing to buy that product, they do everything in their power to make sure that happens. And seriously, 1300 miles in two weeks? The dealer should and will come after you for some sort of “damages” for the excessive use. And really, they can still sell the car as “new” because it has never been titled, they will just have to take a hit on the price because of the mileage. I imagine the thoughts going through the OP’s head at the dealer went something like this “Hmm, my credit is terrible, there’s not way I can get approved or afford this car. What? You can get me approved for a loan? Ha, what suckers. Sure, I’ll take it then. The GAP and warranty will help you get me that loan? Sure, I’ll take those too. You guys really are suckers, loaning money to me. I sure pulled a fast one on you.”

  21. InThrees says:

    Calling it a deposit makes it sound like something they conceivably keep ater some arguing. (Or stonewalling.)

    Is it a down payment, or a deposit?

  22. Pylon83 says:

    @InThrees:
    It’s a deposit until the financing is approved, then it is converted to a down-payment (I’m guessing here). The “deposit” is used in case exactly this happens. Now when he takes back the car, they can keep some of that money to cover his excessive use.

  23. Freedomboy says:

    Cars suck, soon all will agree. Repeat- “cars suck…….”

  24. chucklebuck says:

    @gingerCE

    I think that Cap One’s auto finance (or maybe just personal loan in general) product is actually called Blank Check. We used this for our car financing (through Costco). They basically approve you for $X and you can write the check for any amount up to that (with some minimum). It’s actually pretty nice, and (assuming you’ve done your research, comparison shopped, etc) puts you in a great position when you start negotiating price (because they can’t fall back on the “how’s this sound for a monthly payment” schtick).

  25. Pylon83 says:

    @Freedomboy:
    I agree. I sold my car and my wifes 8 months ago when we moved to Chicago. It’s almost like a weight has been lifted off my shoulders. Now when I drive I find it to be terribly inconvenient. No gas, no insurance, no repairs, no payments. Anymore I prefer to be driven, be it in a taxi, a bus, or a train. Cars are for suckers.

  26. SacraBos says:

    Take the car back. Cancel the contract. Get your money back. You made the offer in good faith and drive the car off in full expectation you OWNED it. If they didn’t feel they could finance you, they wouldn’t have let you drive it off the lot.

    I’d bet they will suddenly manage to find a willing bank.

  27. tadowguy says:

    Why did you buy a new car when you can obviously not afford one?

  28. tadowguy says:

    You should buy a POS car and take the money you save and “pay back your friends” as you mentioned doing and then work to improve your credit score. I don’t know my exact score, but I can get an auto loan from my credit union for 5.99%. By my calculations, you would pay $7522.60 in interest over 5 years, and I would pay $3289.60.

  29. meeksthegeeks says:

    Dude, go get a USED certified car for less. Or go to KIA and get a new car for under $10k and get the 10 year/100k warranty…but you will need that warranty with Kia.

    or buy a junker and build your credit up.

  30. Ecoaster says:

    Before entering a dealership to buy or lease a car:

    1. Know all about your own credit score.
    2. Get internet average pricing (Edmunds TrueMarketValue is pretty good).
    3. Secure your own financing or make sure you qualify for any manufacturer’s incentive financing deals (See #1).
    4. Avoid dealer extended warrantees and watch out for bogus “fees” they might have other than the “Ad fee” which is usually OK.
    5. Make sure you can understand and reproduce ALL finance and payment calculations on your own and the papers you sign agree with your own calcs.

    Skip any of these things and you can easily get taken.

  31. bohemian says:

    Run screaming from this “deal” no matter what. Most of these sub-prime car loans through the dealers come with a fine print clause where you can’t pay down or pay off the loan without taking a huge hit on your credit that shows as a “settlement”. So paying off early looks like you damn near lost the vehicle on your credit.

    Take the car back, go to a bank or credit union and get a reasonable loan for something used that you can afford.

  32. balthisar says:

    Let’s come back to the Capital One blank-check. Once upon a time, there was a company called People First, and they’d send you a blank check valid up to a certain amount, with a contractual, guaranteed rate. Capital One bought them out. Is that what you’re talking about? If so, what’s the rate???

    I used People First for my current car (now paid off), and the experience was friendly all the way. I even needed extra customer service for permission to get paperwork to go to Mexico. First class all the way, and better than the rates I could get through my employer (an actual Big 3 auto manufacturer). Even though I wouldn’t want a Capital One credit card (hear lots of bad stories), their servicing of the loan was exemplary.

    If you’ve got a People First (err, Capital One) blank check, and a rate you’re happy with, why didn’t you use it in the first place? Use it now, if it makes sense financially.

  33. KingPsyz says:

    I feel complelled to post on this.

    First off, I work for a Toyota / Scion dealer and I know Scion has very strict rules regarding how customers are handled.

    Scion is a no pressure buy, so if they did in any way put the screws to him he needs to contact Scion RIGHT NOW. They will act, guaranteed.

    Scion’s are also pure priced, meaning we cannot discount the cars whatsoever. So it is not in this dealers best intrests to take this car back. Unfortunately there’s no guarantees in credit and considering the car sells for $17,270.00 fairly well loaded up, this guy obviously has some issues with knowing when to stop if he got to 20k. Probablyl couldn’t live without Navigation or some other useless options.

    Shit my score is in the same range and Toyota Financial Services got me in aorund 7% on a certified used. So for all we know even though his score seemed okay, he could have had some late/slow pays reported recently while they were funding the loan or who knows.

    The thing with GAP is, if you live in an area with bad accident rates or have so so credit then you need to get it. The ammount you pay (when you’re smart about it) well makes up for the peace of mind in not paying out the ass when some drunk kid creams you.

    If you have the Cap One financing, I don’t know why you’re even attempting to finance at 13% unless Cap One is hitting you for more.

    Take in the Cap One paperwork and drop the extended warranty.

    Then start getting smart and quit shopping outside your means.

  34. KingPsyz says:

    @Ecoaster:
    Most of what you suggested doesn’t apply to the Scion brand.

    Although he should have been smarter about the financing, I’ll give you that.

  35. balthisar says:

    Let me add — without being a shill but trying to be enthusiastic about my company’s products — if you’d be interested in a step up, I can try to arrange friends/family price on a larger, trendy, well-received car. It’s an American brand, but has excellent reviews. You’d have to contact me privately, though, and still bring your Capital One check (or hope they don’t try to screw you at the dealer). If you check my entire comment history you’ll see I’ve never shilled before.

  36. KingPsyz says:

    And also have no residual value on resale… Sorry but I see Amercian car buyers get hosed daily on owing well more than their domestic is worth within a very short time.

  37. pdxgrease says:

    I have lease and bought a total of 5 vehicles with sub 650 credit. They are trying to screw you or are extremely incompetent. Also it sounds like you are going to put a ton of miles on your car… but if you can actually afford $450/mo that puts you in a lot more car leased. Im leasing a 2007 bmw for that payment and its a $44k car. Im not gaining any equity, but im not going to be upside down when the lease is up and Im driving a sweet car that is a tax right off. But still, you can get funding. I dont think 13% is soo bad if you are really attached to the reliability of having a new car and are using it to buy your credit up. If you accept a higher interest loan like that, though, be on time with every payment so you are getting something out of it, IE better credit. Just keep in mind, also, that at that high of a rate you will likely always be upside down in the car.

  38. pdxgrease says:

    Oh also, I have gap coverage as part of my auto policy and it adds like $10/mo.

  39. PS-running the car in reverse won’t roll back the miles Ferris Bueller lied, I already attempted that with my dad’s car

  40. Pylon83 says:

    @pdxgrease:
    Wow, that’s some really rational and reliable advice. Sure, 13% isn’t a bad interest rate, it’s a great deal. And if you average 2,600 miles per month, hell, lease a car. They’re just kidding about the mileage limitations. Plus, if you can’t come up with the $2500-3000 inception fee, just charge it. Or even better, borrow it from from a friend. Additionally, insurance on a car that expensive is WAY cheaper than insurance on a $5-6k car.

  41. camp6ell says:

    dear me, you obviously can’t afford this car if you can’t afford more than $500 down!
    take it back, let them keep the deposit and get the fuck out of there before they want more money from you. $500 for two weeks and 1300 miles is a reasonable rental rate.

  42. verdegrrl says:

    As everyone else has said, take back the car. Hang on too long you’ll end up with a (voluntary) repossession on your credit record. Not something you need now.

    Go pound the pavement looking for a decent rate at a lending institution. Realize that the more inquiries you have on your credit report, the more it lowers your score. Read all contracts and do your homework before signing anything or taking possession of anything.

    [www.edmunds.com]

    Buy a used $5000 car, and make sure to make payments on that sucker on time every time. Pick something really basic and as new as you can find. That way it will cost you less to maintain it. No it won’t be sexy, and you might even have to wind the windows yourself, but in two years everything will be roses. Then go buy a new car.

    Without this much self control, you are going to be one of those scmucks with perpetual bad credit who always wail about being a “good person.”

  43. Tank says:

    i’m pretty sure the dealer didn’t drag him in off the street and force him to buy this car. he went to the dealer oh his own, and made bad choices. y’all make it sound like he got raped, but it from what i read, he took down his own knickers.

    shopping outside his means? sure, but like someone above me pointed out, the salesman did what he got paid to do. it’s stupid to make a what amounts to the largest business decision of your life based on emotions. if you aren’t logical and resonable, you’ll get this treatment every time.

  44. oneswellfoop says:

    Try an early 2000′s vw jetta/golf. they depreciate like hell, but hey, most of that major depreciation is over and done with. You can get one with leather interior and good build quality that you seem to feel that you “need” if you’re spending that much on a new car in your situation, and your’s doesn’t even have leather.
    It’s hard to believe that someone who reads this site failed to do the research and heed so much of the other basic financial advice that gets dished out here.

  45. oddseth says:

    Also, who in their right mind would purchase a loan with a rate as high as 13%? I don’t care what your credit rating is, that is a terrible rate. And, you can lease an A4, 328, C300, or a Mazda 3 for much less than $460 per month…who would pay that much for a Scion?

  46. dialing_wand says:

    Used does not have to = beater actually. Take what you learned about this experience (be more careful, do more research) and apply it to a quality used car. If you’re looking, and can afford something new-er there are always tons of just-off-lease cars that might fit the bill.

    But used is the best way to buy, preferably after the first two years which is the worst for depreciation anyway.

  47. KingPsyz says:

    the only reason he would pay that much for a Scion is because he loaded it with luxury items or options.

    An automatic transmission, power everything, side, curtian, knee, and front airbags, keyless entry and cruise, iPod Pioneer sound system, ect for $17,220.00

    So to get to that extra 3k more he would have had to load it up. Which is silly. If you really need navigation, wait til you can afford it. Scion navigation units can be installed at anytime.

  48. celyn says:

    Scions are Toyota-built cars. Why on earth would you get an extended warranty? The thing will make it to at least 100,000 miles before anything breaks.

  49. Pylon83 says:

    @oneswellfoop:
    I’m a huge VW/Audi fan. I drove an A4 for awhile. Loved it. The only caveat with those cars is maintenance costs. If I couldn’t do the work on my own, I would have literally gone broke with maintenance costs. Another piece of research that a prospective buyer should do. Maintaining a used, european semi-sport sedan can really eat into the wallet. Parts are crazy expensive, and labor is insane.

  50. Pylon83 says:

    @KingPsyz:
    Or buy a $300 Garmin GPS that is portable, and not $3000.

  51. KingPsyz says:

    @Pylon83:
    That too, as long as he takes it with him when he parks as those have been the cause of numerous break ins of late.

    While fairly expensive, if it’s within your means, a nice voice activated large screen in dash unit is pretty choice. But when it puts your payments in that range on a Scion, you’re doing it wrong.

  52. Odwalla says:

    Something doesn’t add up. A $20,600 car minus a $500 down payment equals a total cost of $20,100. That, amoritized over 60 months at a horrendous 13% works out to a monthly payment of $457.34. That leaves $12.66 per month unaccounted for. That’s an extra $759.60 stupid tax the dealer managed to work out of this guy…on top of the $2100 in useless crap they sold him.

    I’m guessing the sticker had the usual “dealer prep” and “delivery” charges on it and this guy didn’t haggle those out of the price, either.

  53. KingPsyz says:

    You can’t haggle a Scion, nor can they add extra fees. They’d loose their Scion contract which would basically fuck them completely in Toyota’s eyes.

    If they did rope him, he needs to get Scion National involved. If he just overspent then he needs to get this straightened out ASAP.

  54. goller321 says:

    This guy sounds like all the idiots that jumped on the subprime mortgage bandwagon. He’s a prime example of why our countries banking is in complete shambles. Take the car back, you don’t really deserve anything back for your stupidity, but get what you can an realize you dodged a huge bullet. I doubt Bush will put any plans in play to bail the subprime car loan industry out…

  55. sonichghog says:

    I always thought gap insurance was a good idea. Unless your insurance will pay for the full value of your loan. Since most cars lose a ton of value as soon as you drive it off the lot.

    I mean you may pay 30k for a new car, and as soon as it leaves the lot and is “used” it may go instantly down in value to 23-25k. You total the car pulling out of the lot and insurance will only pay the cars value,not the loan value, so you could be out a few thousand.

    Also, twards this buyer, try going to some banks in your area, you can probably get a better loan.

  56. balthisar says:

    It doesn’t seem that 13% is too bad for bad credit. I’ve had that rate in the past, and sucked it up. What rate should you expect for good credit? Non-manufacturer rates are about 6% for excellent credit, and you can certainly do worse than 13%.

  57. BBF_BBF says:

    Sounds like Andriy’s in quite a pickle.

    I wouldn’t depend on “internet” advice and find somebody through your local state, county or city’s consumer protection agency that can refer you to consumer counsellor. Definitely, we’re only getting one side of the story, but it doesn’t seem that the dealership isn’t really *that* inconsiderate. Honestly if Andriy had a “Blank Check” already set up with CapitalOne, shouldn’t he/she have used that to finance the purchase to begin with rather than agreeing to the Dealers’ terms?

    Andriy’s definitely gotten him/herself in a worse position by not getting financing *before* taking posession of the vehicle, agreeing to a bad deal, and then putting *HUGE* miles on a car that he/she didn’t even actually have financing for. I would think that even *if* the dealership let Andriy out of the deal, they would due compensation for the diminished value of a car with 1300 miles on it.

  58. Pylon83 says:

    @balthisar:
    That doesn’t mean you should be financing a $20k brand new car at that rate. A $5k reliable vehicle maybe, but not a $20k new car. Some people simply have no sense.

  59. alexanderpink says:

    How has no one recommended a Honda yet? You cannot afford this car. Go and buy a used Honda for less than $5k, it will last you forever and allow you to build up your credit and savings. In addition, this car would barely depreciate during the couple of years you would be paying it off. Get lucky and get a good deal, you may only lose the interest on the loan. Honda or Toyota make the best cars, but a new Scion is out of your range right now and should be taken back immediately. At least you were trying to buy a Toyota and not a BMW 3 series though. You will be lucky to get out for only $500, consider it a blessing to get you out of a horrible financial situation.

  60. Pylon83 says:

    @BBF_BBF:
    I struggle with this one a little bit. I suppose that in my mind a dealer in this position assumes the risk that the car will be driven some during the transition period between possession and financing. For that, I don’t think they should be able to recover anything. However, in this case, his usage was FAR above what anyone would consider reasonable for 2 weeks. I would say at most the dealership would have to eat maybe 400-500 miles, but the OP should be responsible for the balance. However, I still struggle with that a little bit. I suppose it would be foreseeable that a customer in the OP’s position might drive the car that kind of distance when they are under the impression they own it. That being said, part of me thinks the entire risk is on the dealer. I suppose I’m a bit torn.

  61. Odwalla says:

    @balthisar:
    My last car loan (and I mean last in final as well as chronologically) was 6.49% with less than stellar credit. I got it through a (ta da!) local credit union, not dealer financing or a mega-bank.

  62. trollkiller says:

    Call the dealership and tell them to call you when your down payment is ready and then you will bring in the car. They might threaten to call the law on you, this is a hollow threat as this is a civil not criminal matter.

    Do not give up the car until you have the money in hand.

  63. RvLeshrac says:

    Craigslist, craigslist, craigslist. I should add to that ‘mechanic, mechanic, mechanic.’

    Look at Craigslist for a cheap car with some reasonable problem. “Does not run” and “will not start” are not reasonable problems for the average joe.

    Next, have a mechanic (or at least someone who is competent enough to give the car a once-over) take a look at the car.

    I picked up my car for $450 via Craigslist. Bad transmission (skipping 2nd and 3rd gear). Everything else was fine, and the individual selling it had very good service records. $1250 for a transmission rebuild, and the car is fine. I *will* admit that the rebuild hasn’t gone quite right, and it had to be taken in for warranty work – but if you have a quality mechanic, everything involved will be covered. I’ve been without it for two weeks, only because the transmission place is quite some distance away (100 miles, and don’t ask me to explain the details!). If I had the original work done locally, it would have cost me an additional $400, though I would’ve been able to pick the car up a week ago.

    All in all, counting the taxis I’ve needed to get to and from work, the car has cost me around $2000, which is a good deal.

    If you’re interested in a *fully working* vehicle, there are plenty of those on CL. Many individuals will dump perfectly good cars after a few years so that they can have something new. Most of them end up as trade-ins, but plenty of people are going to be more willing to sell the car to you for $5k-$6k instead of taking the measly dealership offering.

    You can also take a look around your neighborhood. I can walk out into my apartment complex now and see a half-dozen recent-model cars in decent condition with “$8k obo” or “$10k obo” on the windows.

  64. RvLeshrac says:

    @RvLeshrac:

    I should also point out that I can have my transmission rebuilt another 3-4 times at full price, and this car would still be cheaper than most. Again, though, if you can’t live without your car for a week or so every six months due to some random failure, you’re better off paying $10k for a fully working vehicle than $1k for something that needs work.

  65. famboozled says:

    Triple check your contract, it might cover this situation and might be detrimental to you. As for the police and the civil/criminal thing. Make the payment in the amount agreed- even if you send the amount to directly the dealer and not a finance company.

    As for the car when I get the downpayment thing- you also want a full release/discharge/holdharmless from the dealer in this transaction in writing on this in consideration of return of the vehicle so they do not come back later for more$. Think downpayment and full discharge in writing.

    If this thing does drag on- DO NOT MISS A PAYMENT AND DO NOT MAKE A PARTIAL PAYMENT- PAY AS AGREED. Do not default on this contract or give them a reason to reposess this vehicle. Your Fico will really be in the toilet. I would make the payment with a cashiers check with the vin in the memo line and Month/Year/Payment # of 60 and not allow them access to your checking account info or credit card number beyond what they already have.

    Start a file folder NOW, take copious notes and keep copies of everything including the cashier checks. Do not let they say that you did not preform on the contract, repossess the car, and sell it at auction for pennies and then come after you for the residual.

  66. maestrosteve says:

    Amazing! 60 something responses so far, and only a few BLAME the OP.

    The OP didn’t shop around for a finance rate.
    The OP managed to buy a loaded $17K car and somehow added $3K more in options, even though he can’t afford to pay his other bills on time and has a subpar credit rating.

    Drove 1300+ miles in 2 weeks and is worried about whether he’ll get his $500 down payment back. Unbelievable!

    Yet, there are people here who think he should call the shots.
    “Don’t bring back the car until you get your down payment back” and similar statements.
    I’ll bet the contract he signed has a clause in it about costs if financing is not secured, and various other legal items that make sure the dealer recoups all lost costs. The OP doesn’t stand a chance at calling any shots.

    I personally know 2 people who have each had multiple bankruptcies. They spend beyond their means, can’t make payments on time, continue to buy new things as the finance charges get higher and higher, and yet they feel it will work out, until it finally ends and they realize it’s over.
    This OP, like the 2 people I know, would never consider buying a used car of any kind to help fix their finances. Buy new and finance is the way to go!

    I also don’t believe we are hearing the entire story about the OP’s credit.
    I don’t believe the OP has the Capital One Blank Check, because he asks “What if they don’t finance?”. If he had the check, he’d use it and live with the new car and high payments that he deserves.

    This would really be a delivery scam if the OP had great credit, did their research, and then the dealer pulled something. I’m not sure there is a scam going on here, and if there is, who is scamming who?

    Is it possible that the OP’s credit was so bad, worse than he told the dealer, that the dealer couldn’t get a bank to deliver even a 13% finance rate?

    Maybe they’re both to blame, but the OP gets the major share of it, as far as I’m concerned.

  67. Pylon83 says:

    @maestrosteve:
    “who is scamming who”
    Precisely. I think the guy was ecstatic when he found a “sucker” to give him a loan and sell him a car. Maybe he grossly overstated his income, etc. but I just can’t bring myself to see how the dealership is screwing him here. I don’t think they are entirely correct, but he bears the blunt of the blame.

  68. trollkiller says:

    @maestrosteve: Not going to argue that the OP should not be buying a new car, that is a given. But the fact is the dealership is trying to scam the OP with a spot delivery.

    The dealership should get their car back just as soon as the OP gets their money back. As for the OP not standing a chance consider this. 1) the OP’s credit is already screwed up, so no threat there. 2) this is a civil matter so no threat there 3) the OP has a $20k vehicle and the dealership has $500. How much will it cost the dealership to even attempt a suit or even arbitration? It is easier and cheaper for the dealership to refund the money to get the car back.

    Why should the OP risk $500 because the dealership did the song and dance?

  69. XTC46 says:

    take the car back, get your money back, go buy a good used car for a ton less. Buying brand new cars is almost always a bad idea (from the financial perspective) so doing so when you have a bad credit score is just dumb.

  70. Pylon83 says:

    @trollkiller:
    I think your view on this whole thing is a bit twisted. The OP will be lucky if the dealership doesn’t come after him for more than the $500. What if he has scratched the car? Trashed the interior? He’s got little ground to stand on. Further, I’m not sure he can prove that he owns the car. Without reviewing the criminal code for whatever state he is in, the dealership might be able to report it as stolen. If you rent a car, and don’t return it, they can report it as stolen. At this point, he doesn’t own the car, he is basically renting it. If he doesn’t return it upon demand, it could be considered stolen. So if he tries to play your game of “give me my money and I’ll give you the car”, he could find himself in alot more trouble than simply being out $500 and having gotten to “rent” a nice new car for what must have been a trip (1200 miles?).

  71. trollkiller says:

    @Pylon83: It took 2 weeks before the dealership called and said 5 banks turned them down. Horseshit. Even if you contacted one bank a day what happened to the other 5 business days?

    The dealership knew the OP’s credit and wrote a deal complete with payments and an APR of 13%.

    How would the dealership know the payment amount and the APR before the loan was approved? Unless, going by the credit score the dealership knew they could get the OP financed at a lower APR and sell the OP on the higher APR.

    I am betting what happened is the bank(s) did not offer as low an APR as the dealership had hoped and to make up the difference so they waited 2 weeks to give the OP a chance to become attached to the vehicle so they could try and pound out extra money from the OP.

    If the OP had bought the car on Mon. and then on Wed. the dealership called and said “sorry we tried but can’t get you done” I would say there was no attempt to extort extra money. Did not happen in this case.

  72. Pylon83 says:

    @trollkiller:
    There are 1000 reasons why it took 2 weeks for them to call. Some of them legit, some not. Either way, he’s obligated to return it on demand because he does not own it.

  73. trollkiller says:

    @Pylon83: It is not a rental, the OP entered into a purchase agreement for x amount of money for x amount of time. The dealership could not hold their end of the bargain. Now it is a contract dispute. Contract disputes are civil.

    I had the same thing happen to me and my down payment was $1500. It was not worth it for the dealership to attempt to sue me. It was easier and cheaper for them just to give the money back.

    There is no reason to wait 2 weeks before calling for the vehicle. The dealer was being shady and should not get any enrichment from the deal.

  74. trollkiller says:

    @Pylon83: Yes as soon as they have his money ready they can have the car back. The OP was not looking for a rental. And no legit reason why it ws two weeks.

    Dealerships have a network of lenders, enter the info and the yea or nea is returned in a matter of minutes, at the most the next day. Not 2 weeks

  75. yg17 says:

    I’ve been with my parents for the last 3 cars they purchased. Every single time, financing was secured right then and there, and they had guaranteed financing and knew the exact interest rate before leaving the dealer. The finance guy put all their info into the computer, which almost instantly pulled up a “yay” or “nay” from several banks, along with the interest rate, amount of monthly payments, everything. Every time, we got to see the computer screen with that list, and the finance guy could change things to see what happens….amount of loan, term of loan, and immediately get updated numbers. Once the bank was decided on (naturally, the one with the best APR), the application went through and it was confirmed within minutes.

    In this day and age, there’s absolutely no reason for dealers to not have secured financing before the customer drives off with the new car unless they plan to pull crap like this.

  76. EnderVR46 says:

    I had this happen to me once, only without the terrible rates and such. I was in to purchase a used Honda, had my own financing and all that at a good rate. They said they could beat it, so I told them to try. They came back with a rate 2% lower than my bank so I agreed. That’s when they started telling me I also had to get a warranty, which after doing the math, came out to still be cheaper than my bank with the cheapest warranty.

    I signed the paperwork and left with my car. A few weeks later I got a call from the finance manager telling me that I needed to come in as something came up in the paperwork. I went in, and they started on this story about having to re-sign the paperwork, at a higher rate, and a few other things.

    I laughed at him, took out my phone and called my bank to tell them that I would indeed be needing their loan. I canceled the warranty, and never did business with them again.

    I also never let another dealer talk to me about financing. My first words, after telling them which car I want to see, are that I bring my own financing. I never even give them my SS# until it’s required for the paperwork. If they start talking about monthly payments I stop them and remind them that I’ve already done that math before I came in, that I’m only interested in the cost of the vehicle.

    As a result, I have a great relationship with my bank, and when I need to purchase a new car I only need to call them up. I tell them how much I’m looking to spend, and they tell me the terms. At the dealership, I negotiate the price and have them fax a PO to my bank. 30 minutes later I’m out of the door.

  77. trollkiller says:

    I just had another thought on why it took two week. A lot of people get paid every 2 weeks. The OP may not have had extra money for a down payment when the deal was made, but there is a good chance they have some money they can lay their hands on now.

  78. EnderVR46 says:

    Oops, meant to say. Take the car back, take the lumps, and look into a good used car. Just like everyone else is saying.

    Shortly after the Honda Fit came out around here, I went in to look at getting one. After looking at the price to own a new one, and the price of the used one on the lot next door I quickly changed my mind. I might pick one up in a few years when they’ve depreciated.

    Cars aren’t an investment, get what you need for the cheapest price possible. Use your head, and spend some more time running things out on a calculator.

  79. Pylon83 says:

    @trollkiller:
    I guarantee you that in the contract it says until the financing is completed, they still own the car and that he has a license, or some other legal right, to use it. All the bank would need to do to report it as stolen is to prove they own it. He can’t prove he owns the car, they can. Since the car does not belong to him, he must return it on demand regardless of what the dealerships intentions/motives are. Again, if he decides to hold out and refuse to return it, he could wind up in a lot of trouble.
    @yg17:
    While I’ve never had a problem obtaining on-the-spot financing, I would imagine that for those such as the OP with less than stellar credit, the process is longer because the bank will only let the computer approve loans that fit into a certain little box of risk. Anything outside that box probably has to be approved by an actual person. It’s like applying for a credit card online. If you have good credit, and your income is reasonable, you are instantly approved by a computer. If you don’t fit in that box, you have to wait until it can be reviewed.

  80. trollkiller says:

    The OP should have a bill of sale to be able to get insurance on the vehicle. Trust me it is a civil matter. The bank/dealer can’t report it as stolen as they sold the OP the car. Even if the contract says the car must be returned on demand, the dealership would have to go to court to enforce it.

    The dealership will want to keep the money in house to make it difficult for the OP to walk away. The best way for the OP to get their money back is to hold the car.

  81. Pylon83 says:

    @trollkiller:
    It all comes down to who has better proof of ownership. While I agree that a contract dispute is most certainly a civil matter, the fact is he does not own the car. The dealership does. He has their property, they have demanded its return. I think that the dealership could get the police involved. Really it comes down to what paperwork he actually has vs. what paperwork they have. If the dealership can convince the police that they still own the car, they can report it as stolen.

  82. trollkiller says:

    @Pylon83: Maybe and the reason I say maybe is because of the exchange of money for the vehicle. Once money exchanges hands the ownership is muddled. I wish one of those lawyer types would clue us in.

    I see what you are saying, I just disagree with your view.

  83. EmmaC says:

    This whole thing sounds fishy, from this guy who has bad credit, owes friends money, but plans to buy a new 20K car? It sounds unrealistic that a dealership would let someone with such bad credit and who leaves a measly $500 deposit (on a 20K car) to drive off with this car–AND now this guy has put 1300 miles on it–I mean, that is ridiculous as well. Both sides deserve to lose money because they were both acting like idiots. I blame both parties.

  84. trollkiller says:

    @EmmaC: Solomon is that you?

  85. RvLeshrac says:

    @EmmaC:

    I’m wondering about the “1300 miles” thing, too.

    Even assuming a pizza delivery driver doing 100 miles a night, that’s only 1,000 miles over 14 days (10 working days). If he’s not a delivery driver, 1300 miles is ridiculous. If he *IS* a delivery driver, 1300 miles is more reasonable, but still a little out there.

  86. trollkiller says:

    @RvLeshrac: Just going to work and back I put on 1000 miles every two weeks. If I go to Wal~Mart on the weekends it would add another 120 to my total. So I am up to 1120 miles and I did not go “anywhere”. So it is possible without doing anything funny.

  87. SkyeBlue says:

    Not even including the INTEREST, with 60 payments of $470.00 a month, the $500.00 down and the extra $2100.00 before it would be even driven off the lot this $20,600.00 vehicle would actually cost $30,800.00!

    Doesn’t anyone even bother taking a calculator with them to add up the numbers on the contracts they are signing?

  88. Elhigh says:

    You bet he SEEMED willing to help you – that’s called acting, and all the best actors are in car dealerships.

    New car deals are generally carefully designed ripoffs. Don’t take the dealerships’s financing, ever. Arrange a loan through your bank – they know your financial situation and will be able to competently tell you what you can afford.

    Stick to the bank’s loan. Don’t go over it.

    The original warranty is sufficient – don’t pay for an add-on.

    “Dealer Prep” is a complete ripoff. I was a lot boy for a couple of years; dealer prep was my responsibility and it took me a grand total of an hour for each car, at minimum wage.

    Get a good used car. I’ve driven in DC for years and would much rather some sleepy diplomat smacked into something with the new already rubbed off.

  89. AlisonAshleigh says:

    I’m sorry, as much as I hate buying new cars and never will again, and as much as I hate spending more money than needed, GAP insurance saved me almost 10k last year.

    I had a car that I owed about 8k on that died. I mean literally DIED. I was living alone, needed a RELIABLE car for work (something with a warranty) so I bought a 6 month old car that had been a repossessed lease for about 10k.

    Five months later, some asshole blew through a stop sign and my car ended up fully wrapped around a telephone pole. They had to use a SNOW SHOVEL to pick up the pieces, thats how wrecked it was. They totaled my car, and gave me 12k for it. The GAP covered the remainder of the rolled over loan from the 1st car. If it wasn’t for that, I don’t know what I’d be doing right now.
    I paid $500 for the GAP at the time of sale.

  90. eltonito says:

    After sifting through the comments and thinking about it, you clearly need to return this car. Even if you have to lose your $500 “deposit” and return the car, it makes more fiscal sense than the loan you have agreed to pay. Even if you have to spend another $500 to get out of the deal, you have still come out in better shape than you would financing $20k at 13%.

    Seriously, spend $1000 now and chock it up to the “stupid tax” we all pay at some point in our lives to get out of a bad situation. Follow the common advice here and buy a decent used car for under $10k or even under $5k.

    I know $1000 seems like a lot of money, but it isn’t compared to the financial burden of a high interest loan on a rapidly depreciating asset.

  91. Bobg says:

    I pay cash for everything and have done so for 20 years (ever since the credit card outfits started going crazy.) My vehicle died on me unexpectedly and I had to buy another one. I went to several places and everyone said 20% interest. I resisted and finally decided that I had to bite the bullet because I needed a car. I Figured that I would pay the vehicle off in a year so the interest bite wouldn’t be that big. I went to Bel Air Nissan in Towson, Md. (Jones Junction) and got a very low mileage used vehicle. I signed the papers at 20%. The finance person (Peg) said that she would try to get me a lower rate and asked for a couple of days to work on it. Yeh sure Peg-I’ve heard that one before. Two days later she called and said that she had gotten me a rate of about 12%. Not great but with absolutely no credit record it was very good. I guarantee that my next vehicle will be bought from Jones.

  92. whitesoxfan says:

    Same thing happened to me when I was in college. I put $500 down just like you, had the car for over a month or so, while they were trying to work the financing out. When they couldn’t approve me, they tried charging me for miles put on the car. I went through my attorney general and a week later I got a call from the dealership saying that I had a check waiting for me. This is their fault, because they let the car go out of their lot before it being approved. Don’t feel bad, get your money back and take the car back.

  93. mynamehere says:

    I went to purchase a vehicle one time and negotiated the price of the car. Once that was finished I told them I wouldn’t be willing to pay over $380 a month (this was a few years ago). This sort of forced them into finding a very good interest rate to make the sale. They told be to take the car home and they would work out the financing. When I came back they told me they could only get %X, which put the payments at $385. I politely handed them the keys back and walked away even after putting mileage on the car. Basically, there is no deal until you’ve signed all of the paperwork. They’re foolish to give you the car before they could lock up the terms. Take it back, get your money and go home.

  94. yg17 says:

    @Bobg: You got lucky. I’d say your story is the reason why anyone who says “avoid credit cards at all costs” needs to STFU ;)

  95. KingPsyz says:

    @trollkiller:
    You know not of which you speak.

    It does LEGITIMATELY take sometimes two or more weeks to secure financing. If they were tryign to screw him as you say they would have called him back the next day and said nope bring it in.

    The fact it’s taken two weeks is you have a finance manager probablly working his contacts trying to get this guy done. Like I mentioned before, he probablly had something hit the credit report after they initially ran the credit. They don’t do in house financing at Toyota/Scion dealers, so they’re APRs and payment estimates are based off of a credit menu.

    How could this be a scam if there’s really nothing in this deal for the dealership? Scions make dealers little to no money. If he did get the options added at the dealer, Scion makes the dealer eat the installation costs, so this could even be what’s called a “looser deal”.

    Even if they take the car back they’re screwed, they’ll have to sell it as used just because nobody will want this guys tore up xB, and they can’t discount if it’s a new Scion for the mileage. So they’ll end up taking a larger loss on resale due to any wear and tear.

    There’s gotta be something in it for the dealership to try and call this a scam., This is simply a matter of someone living well beyond their means and having it catch up with them.

  96. kbarrett says:

    If you avoid credit cards, you must have an emergency fund stashed away.

    Everyone else uses credit for emergencies.

    As for the OP …. he should consider this a god-send. He can return the car, and will be out, at most, $500 for his screw-up.

    If they don’t refund his deposit, and he pickets the dealership, they will probably hand him his $500 just to get him to stop scaring off other suckers.

  97. KingPsyz says:

    @mynamehere:
    wow, you’re a jerk…

  98. 12monkeys says:

    @Ecoaster: There is no TMV for Scion and the warranties and gap are supposed to be priced according to Scion posted prices.In most spot -delivery states there is no liability for the miles put on the vehicle and down payment must be refunded if the customer returns the vehicle un damaged in a timely fashion.You do not need to threaten anyone or be rude about it ,just politely take the vehicle back.I Hate it when people act stupid in these cases and I have been known to buy the rate down at the lender just to spite the rude customers.

  99. theysaidwhat says:

    Even on ‘pure price’ cars, like the Scion and Saturns, you can negotiate if you hit them at the right time.

    I bought my 2005 VUE the last week of the GM employee pricing event in Aug 2005. The 2006′s were already on the lots. They had to move what 2005 inventory was on the lot. I had told them what features I wanted in the car before I even saw what they had. Every time they told me how great some feature that I didn’t want was, I just said–but I don’t want that, so it’s of no value to me,sorry it’s in the car already, but not my problem.

    In the end, I got the car I wanted with everything I wanted on it, plus some things that I didn’t, all the cargo mats free, $8oo bucks off the GM employee price(they were stupid enough to show me the sheet on the car as they had to transfer the one I wanted in from another dealer, and were shocked I knew how to read it)and .09% GM financing. It probably helps that I am in sales so that negotiating doesn’t intimidate me in the least–it’s what I do all day, every day.

    So like my last Sat urn, I’ll drive it for 10 yrs, 6 without car payments, and have paid less than one car payment for the entire financing. you can negotiate anything. Just have to know your facts and stick to the guidelines you had before they start trying to work on you.

  100. KingPsyz says:

    @theysaidwhat:
    “Even on ‘pure price’ cars, like the Scion and Saturns, you can negotiate if you hit them at the right time”

    No, you can’t. Period. Ever.

    Maybe on Saturn, since they abandoned their plan. But not with Scion.

    Trust me, I know. You cannot negotiate a Scion ever. Please stop being edmunds dot communists people. Despite what they tell you, you can not buy a Scion for anything other than Pure Price.

    Now some dealers are able to discount them some, but they have to announce it on their website, can only set the price at the begining of the year, and everyone gets the same deal. If a deal came through with any difference Scion pulls the license to sell Scion, and Toyota usually frowns on dealers not able to offer Scion product.

  101. Gesualdo says:

    13%? Jesus. If you don’t understand compound interest, please learn. Buy used if you actually need a car. If you’re traveling within the beltway, you may be able to get by with a monthly metro and bus card. I did that when I lived in DC and saved a lot of money and hassle as a result (no gas, repairs, insurance, parking).

  102. eltonito says:

    @KingPsyz: Curious, how is “pure price” not “price fixing”? Even when Saturn had the “no haggle” price there were still cars sold under MSRP or with extremely discounted add-ons and accessories. What you are saying is that the manufacturer sets the price and then strong arms the dealer to sell it at that price. Sounds like price fixing to me.

  103. Sian says:

    They tried to rip you off. seriously, those financing terms are robbery. If you can’t keep the car, you owe them *nothing*.

  104. KingPsyz says:

    No price fixing is the name given when several corporations, usually considered competition, secretly adjust wholesale pricing to collude a fixed price for a good well above it’s normal cost.

    This is no different then brands like Apple that set a retail price and tell anyone licensed to sell it that they cannot deviate from that price.

    It’s not done in secret, they’re completely straightforward about it.

    The idea is to take the scam out of buying a car. When there’s no haggling on price like you’re in a turkish bazzar, then you can’t feel ripped off. Too bad the Edmunds.communists who feel like everyone should get a car at manufacturing costs keep that from happening on a larger scale.

  105. trollkiller says:

    @KingPsyz: Oh the poor Scion dealer, makes little to no money. Bullshit. Or did you mean they make little to no money on the car but make their money selling the difference in interest rate, dealer fees, add ons and bogus service?

    Dealers WON’T sell a vehicle if they can’t make money. It would be bad business to do otherwise.

    [www.bigtwoscion.com]
    Scion’s “Pure Price” purchase experience means no haggle, no hassle. The price you pay for all products and services offered equals the dealership’s posted and advertised price. Price menus are clearly posted in the dealership showroom for all products and services. Dealers are free to set their own prices.

    Whoops.. you might want to contact that dealer and tell him he is fucking up your story. Oh and you may want to contact these people too. [donmcgillscion.com] So “Pure Pricing” means you pay what is advertised. Novel concept I will grant you.

    Face it this dealership knew they could not get the deal done for $500 down and was waiting the two weeks to try and force more money from the OP. There is NO legitimate reason it would take two weeks for a loan approval.

    So what dealership do you work for?

  106. Pylon83 says:

    @trollkiller:
    I agree with your analysis of the “Pure Price” bit and I think the other poster is off-base with his “no adjustment” claims.
    However, I still firmly believe that it could, in some circumstances, take 2 weeks to arrange financing for one with poor credit. Maybe they wanted to verify his income and the HR person at his work took a long time to get back to them, etc.

  107. KingPsyz says:

    I know dealers set their own Pure Price, and as I already mentioned they have to set those prices at the begining of the year and make the SAME OFFER TO ALL CUSTOMERS AND CLEARLY STATE IT IN THE SHOWROOM AND ON THEIR WEBSITE IF IT DIFFERS FROM MSRP.

    I know, I have already spoken with Scion about a dealer in California that was breaking Pure Pricing.

    I know the industry sucks, I see it from our side and wish everyone would go the way of Scion. Sell it for MSRP, which in general is a $1,000.00 markup over invoice at most, which if you consider everyone that works in a dealership that is not a whole lot to go around. Then nobody gets ripped off.

    But because for some reason everyone thinks that they’re entitled a car for being alive, everyone thinks they should get the sharp pencil, sell it at cost deal. Which as you already observed, would nullify dealerships quickly.

    The reason Scion dealers exist is for several reasons. One Toyota’s whole goal is to sell vehicles at a low price point and give them a plesant experience and then when they’re happy and ready to upgrade into one of the Toyota models they’ll make some money there. So they “encourage” AKA basically force all Toyota dealers in large enough markets to carry Scion and follow Scion policy. Two, dealerships know that by giving them a hassle free experience on the car itself, they’ll be more inclined when they want to upgrade their Scion to come back to the original dealer.

    That’s the only time a dealer can make money off Scion.

    Everything is regulated on the original sale though. Even trade values are regulated by Scion. We have to offer top dollar and cannot negotiate trade value, once an offer is given it cannot be changed. Meaning there’s no incentive for a salesperson to lowball a trade value only to bump it in the negotiation. Same goes with fees, if any. They have to be announced in the begining and they can’t tack on extra or erronious fees. Scion watches this as well. In fact Scion regularlly sends people into the dealerships to run “audits” on Scion policy.

    Yes there are legit reasons why it takes two weeks to secure final financing as I already explained. Only if someone fits within a fairly narrow credit profile are they funded before they walk out the door.

    Most times the dealer secures financing a week or two after a customer dirves away but we meet or exceed the original offer and so they never know about any kind of delay.

    I work for a dealer, and because when I signed for the car I was in a simmial credit situation to the OP it took two weeks to get funded. But in the end I got a better rate and even got them to pay for registration. but it still took two weeks. The fact that it’s taking this long means someone is going to bat for him. But again, there’s nothing in it for them to have him default or return the car.

    If he honestly feels he was given the runaround, or pressured, or anything like that he needs to contact Scion immediately.

    I work for a dealer, but I won’t advertise for them here, that’s not the purpose for my posting here.

  108. jimconsumer says:

    Quick story: I once bought a brand new, $35,000 SUV from a Toyota/Mitsubishi dealership. The going deal was 0% interest. I had a 750 FICO and more than qualified. We traded in our car, signed loan paperwork and drove off the lot.

    A week later they called me: “You don’t qualify for the 0% deal. You need to come down and sign new loan papers at a higher rate.”

    My response was as follows: “No, I’m not signing anything. You either make it work under the terms of the original agreement or the deal is off, I’ll bring it back and you can return my old car to me.” When they pressured me by claiming they no longer had my old car, I told them, “Well, you’d better find it, then, because I’m going to sue the ever loving shit out of you people for breach of contract.”

    What do you know, suddenly I qualified for the 0% deal again. Funny how that works.

  109. eltonito says:

    @KingPsyz: Actually, Apple is a bad choice of comparison to Pure Price since I can and do get things for upto 15% less than MSRP from authorized Apple retailers. Heck, I usually get 10%+ discounts at the Apple store. And no, I don’t work for Apple.

    As for everyone wanting the “cost deal”… I blame this solely on dealerships. Decades of bad practices have created an environment where no one trusts or believes them and wants to stick it to the dealer/salesperson/industry for something that happened to them in the past.

    I have zero sympathy for any dealership or dealer salesperson and I prefer to aggressively haggle for a price that seems fair to me. Why? Because I’ve worked for a car dealer in a non-sales position and I see how hard dealers try to confuse customers and fudge numbers. Even when selling a car at “cost” the corporate incentives provided a decent profit on the backend. That and $500 undercoat that cost us about $25 in materials and 45 minutes of a $7/hr employee.

    I don’t believe for a second that a Scion has a $1000 margin on a $15,000 car. I like the Scion line, but the build quality is subpar for Toyota*. Couple that with cheap materials and a bargain basement powetrain and you have a lot more margin than $1000. Let me rephrase that – someone has a lot more margin than $1000. Maybe dealers are getting screwed by corporate, which sounds probable. If that is the case it should be self-correcting in the marketplace.

    * I test drove a last gen xB, things may have improved in the current iteration.

  110. KingPsyz says:

    Well all the Scions are built by the Toyota. They did try and get a little too agressive with cutting costs in the first gen xB and the new one is a huge improvement.

    You have to see the gaping hole in your logic about pricing though. You say it’s to make up for years of getting ripped off, yet now that so many customers are demanding cars at invoice and people not buying cars as often the dealers get desperate and try and get everything they can out of anyone they can and the cycle continues…

    I can’t wait til something like Pure Pricing is industry standard and sites like edmunds and lemon law are no longer required. All they do is create false experts and an air of animosity that doesn’t do anyone any favors.

    I work in sales but not as a salesperson, so I agree there’s some things in this business that suck to high hell. And there are a lot of us on the “inside” who are consumer advocates and are fighting for change. Internet sales departments are the way to go for a car buy until Pure Pricing is industry standard.

    I don’t know what brand you were working for, but with Toyota there is honestly a very narrow margin.

    Now I might get in trouble for this, but here goes.

    For an automatic 08 xB the MSRP starts at $17,220.00 Invoice on that exact MSRP is $16,400.00.

    That’s $820.00 above invoice… Now pay for building lease, sales commission, management, payroll, accounting, finance commission, phone center, website fees, utilities, ect with that $820.

    Obviously Scion doesn’t collect dust the way some domestics do, but you get the idea.

  111. Pylon83 says:

    @KingPsyz:
    What I see you laying out here amount to “sales” tactics. The dealer is going to make more than $800 on the sale. Whether that comes from kickbacks from the manufacturer or the banks, they certainly bank more than $800. The reasons you give come across as towing the company line. Most of us with logic know the dealers are there to make money, and certainly don’t expect them to lose money on the sale. However, it comes across pretty shady when you start saying “we have to pay rent, employees, etc.”. I don’t care what your problems are, or what bills you have to pay. We’ll negotiate. You (the dealer) will come down as far as you possibly can and still profit. I, the buyer, will come up as far as I am willing to. It’s a game. If I can find your bottom line before you find my limit, I win. If you find my limit before I find your bottom line, you win. It’s all a game, and I think it’s better for all involved than this “pure” pricing business. In some cases, the dealer can make more than they would have via pure pricing, in some they make less.

  112. trollkiller says:

    @KingPsyz: I think you honestly believe what you are telling us, sorry but I have to disagree on a few points.

    First that $820 does not reflect all the profit margin in that vehicle. As an underling I would not expect you to know all the ins and outs of the profit margin. If you charge a dealer prep fee, dock fee, or any other fee of that nature you are adding to the profit margin.

    You show a finance commission to your list of expenses. A sales commission is easy to understand, car gets sold, money is made, the salesman gets their cut.

    Now ask yourself why would you pay a commission on something that is not making a profit? You wouldn’t. Why does the finance guy get a commission? Would it be because he gets the loan done at a lower percentage than what is sold to the customer? So there is a few more thousand added into the profit of the vehicle.

    Add in the money made by selling gap insurance and now you have more profit margin added to the vehicle.

    Add in the money for undercoating, accessories, application fees and you add even more profit margin to the vehicle. Oh and don’t forget dealer incentives.

    As you can see there is a lot more margin then the dealership pretends is there. When was the last time you saw a dealership owner wearing Wal~Mart clothes?

    You say sometimes it takes two weeks to get financing but the customer never knows about it because you find a better deal? It may take two weeks before the paperwork is filed in all the right places but you know if the loan is approved before that.

    Look at the OP again, now ask yourself would you do a $500 down on a $20k vehicle with that FICO? Of course you wouldn’t. The dealer thought they could send it out the door and force more money from the OP after two weeks. The OP would at two weeks in be attached to the vehicle and most likely have no other means of transport. If they had a trade in you can bet they were dehorsed too.

  113. trollkiller says:

    @Pylon83: Personaly I like a “Pure Pricing” type of set up. The dealer sets what they feel will be a proper price and I as the customer can decide if I think it is worth it.

  114. Ben Popken says:

    Andriy writes:

    I know the loan is kind of high – but I was planning to refinance in 6 months. Also, having a large installment loan should help my history. I’m comfortable making payments, but I hate to deal with BS. I just called the finance manager, and he told me that he was waiting for a response from me. I wonder whether I should tell him I didn’t get financing even if I do get one – he’s still telling me I need extended warranty and GAP insurance after I suggested we remove it to get better terms. Also, he matched me with a very expensive insurance (“don’t call GEICO – it’s always too much”) – resulting in my inusrance being $120 more expensive that GEICO – btw I never thought insurance also considers your credit.

    I’m thinking about “returning” the car, and get something cheaper/used. The truth is – a car is a car – my friend’s old Torus drove us just fine. Yeah, 1300 miles – that was few trips to airport, a trip to NY, and a Shenedoah park trip. Also, driving manual in DC traffic is tough – I mean, it gets tiresome quickly jerking the shift-knob.

    The contract says that I agree to return vehicle without excess mileage – I wonder what they consider “excessive”.

    He knew I was a risk when giving me a 13% APR. My fault is – not realizing what spot delivery meant. I’m not playing innocent, I knew I had problem with credit in the past – but not slowly working it out. The finance guy pretended he had it all worked out.

  115. eltonito says:

    @KingPsyz: Where’s the flaw in my logic? A car dealership is a business that exists to sell a product. If they can’t sell their product for a profit they should not be in business. Like I said, self correcting problem.

    If people stop buying cars because they can’t get the price they want, dealerships will eventually close and the market will constrict. At some point prices will go back up and the cycle will be complete.

  116. KingPsyz says:

    @trollkiller:
    Actually as I said before, with a low 600 middle score I got into a Certified Camry with about 20k miles on it for about 19k with tax and all and I got a 7% rate and $500 back to pay my registration with.

    So yeah, they could have got him done. Did someone try and get a bump in theri commision in the finance department? Probablly, but again that’s why I mentioned that if he honestly feels like they put the screws to him or messed around to report them to Scion. They do respond. I have contacted them before, not letting them know I work for a dealer and I always hear from then in 24 hours or less.

    It’s fine if you and Pylon don’t agree with what I am telling you about Pure Pricing. I know it’s on the up and up, and you just won’t ever be able to purchase a Scion if you insist on bargining or haggling. We can’t even touch those deals with a 20ft cattle prod.

    Trust me, there’s once a year when we can make a fuck ton of money on special edtions if we we’re allowed to adjust pricing.

    You know how Ford dealers add 15k to a GT, or a Roush Mustang? We can’t do that. Period.

    I do this run around with people every day, they insist they should be able to make an offer, and I try and tell them we’re not allowed to change pricing or haggle on Scions.

    I think if the industry went with set pricing accross the board, you wouldn’t need commisioned sales people. The customers would be in a much better posistion because they all get the same deal.

  117. KingPsyz says:

    One last thing and I’ll walk away since there’s no changing your minds.

    Yes here in Vegas all dealers have a high DOC Fee, usually in the $500 range. That’s the only fee were allowed by Scion to add because we advertise it on our site and here in the showroom.

    The accessories are sold to the customer at Scion’s set price, we cannot charge for dealer installation or undercoating, or any other garbage. In fact for Scion customers here we just give them the paint sealant for a year, free. Nothing added to the deal, not allowed to. We give it for free hoping they’ll come back here when they do need some kind of service down the road or want to add accessories.

    There are no dealer incentives on Scion, ever. You can choose to not belive me, but it’s true. As I mentioned previously, Toyota considers the Scion brand a loss leader.

    And yes, I do expect the dealer to pay everyone involved, even if there’s not alot to be made, because why would anyone want to work for free?

  118. trollkiller says:

    @KingPsyz: I agree with you on the need for a true price like most other goods and services.

    I just produced an ad piece for a Scion dealer, it spoke of factory incentives, employee pricing, discounts.. etc. Because it is an ad piece I won’t take it as gospel but if what you are saying is true the old school dealers still want to play the game.

  119. trollkiller says:

    @Ben Popken: Whoa whoa whoa, they matched you with car insurance? I don’t know about your state but here that is illegal. Dude you are being clubbed like a baby seal, return that car. Even if you take the $500 hit you will come out ahead.

    You are dealing with a slimy dealer. Bail out NOW. Go back to driving the beater until you can buy the right car from the right dealer.

  120. trollkiller says:

    @KingPsyz: That DOC fee is extra profit on the vehicle, even if everybody is doing it.

  121. iheartconsumerist says:

    “Hell, tell them your old pal is the editor of the most popular consumer rights site on the internet with over 9 million pageviews per month and we will drop the wreckage on their asses.”

    I love it….

  122. KingPsyz says:

    @trollkiller:
    That Scion dealer could be in big trouble if Scion corparate got wind of that ad.

    Unless they were in regards to the Toyota portion of the dealer…

    Yes the DOC is profit, so they made a whopping $1,300.00 off a $17,220. car.

    Many companies would buckle under that kind of narrow margin. The car buisiness is pretty much a tightrope act. I agree there needs to be change industry wide, but in this one instance he bought a car from a manufacturer that tries to prevent their customers from getting the shaft.

  123. trollkiller says:

    @KingPsyz: The ad piece left it all pretty gray as they all do.

    They made a whopping $1,300 on a product they did not have to buy. If the dealer was out of pocket $15,920 to make that $1,300 he would be nuts. If the auto business was set up like a normal retail business the margin would be very thin. The dealer does not have to pay for his new car stock until it sells. If your boss tell you different he is a liar.

    If a lot is on the tightropes it is because they either do not have the products the customers want or their practices are so shady that only suckers buy from them.

    You mentioned before that you hate sites that make customers instant “experts” and I can feel you on that. Try selling electronics when you are up against Consumer Reports. Try explaining to the customer that the model they are dead set on buying was discontinued 6 months ago. Not fun.

    An educated consumer is the thorn in the side for a dealer, but the dealers are the ones to blame. Car dealerships have a well earned reputation as the OP demonstrates. I agree with you he needs to get corporate involved.

  124. wildmight says:

    Hi, this is Andriy. There’s no problem with Scion – the price is $17620 for the Scion tC (including $620 dealer destination charge). There’s $100 doc processing fee (that says not required on the paperwork – not sure that that is). There’re taxes and fees. Plus there’s Platinum contract and GAP insurance, which I know cost too much. Finance manager still insists I keep those (even though I know now those aren’t required). He told me not to return car – he said he’ll work something out. I sort of trusted him in the beginning since he told me not to get coating/alarm – told me it’d be waste of my money. I said strict no to adding more money / higher APR – told him we had a deal. So I’m just trying not to drive far away now. I’ll just hold on and wait. The car is nice to have, but public transportation is available here, so I shouldn’t be in too much trouble if I return it, so I’m not worried about it. I really appreciate everyone’s advice – I realize what my right are now. Really appreciate everyone’s help.

  125. Pylon83 says:

    @wildmight:
    Yeah, Keeping a car you obviously can’t afford, as well as the sucker additions the dealer talked you into and you know you should keep. I’ve got a bridge for sale in Arizona, let me know if you’re interested.

  126. KingPsyz says:

    I would call your own auto insurance to find out how much they charge for GAP. As to the PLATNIUM COVERAGE, yeah ditch that this is a brand new Scion and just about everything is covered. Unless this was a certified used model, then Platnium Certified should only run you about $750 max.

  127. ucntcme says:

    @KingPsyz:
    “1,300.00 off a $17,220. car.”

    7.5%

    That’s pretty damned good considering average margin on sold consumer products in the US is under 6%, with the majority under 4%.

  128. wildmight says:

    OK, things went from bad to worse….

    It’s been almost 7 weeks now since they’ve given me the vehicle. I think the finance manager screwed up and doesn’t know what to do.
    The car still looks good, but it has 3000 miles already. They told me (my manager and another guy) that they’ve exhausted their finance options, so they’ve tried me to do the financing myself. I didn’t see anything wrong with it (although contract stipulates that it’s dealer’s responsibility to come up with financing).
    Also, my 1st payment was due on the 5th, but I never received the bill. Contract says that they may ask me to return the car in good condition without excess mileage (not specifying what excess is).
    With my financing, i was pre-approved for up to 26k by HSBC AUto. I went to dealer and we closed the sale (i know he had to fax to them whole bunch of papers), I got congratulated on the phone by bank manager – dealer put filled-out Turbo and authorized check into safe. However, I get a call maybe 20 minutes later from the bank saying they’re voiding the check and they need more docs from me (I’ve been at my employer for 2 years, however, I wasn’t getting money while overseas for a good chunk of 2007 – so I think they’ll still deny when I send them other docs – my W-2 is still good).
    Anyway, the situation is that I realized that maybe God doesn’t want me to have this car anymore. That manager (whom I don’t trust a bit) told me I’d loose $3000 if I take car back (I’m sure he meant trade-in though).
    My question is this:
    A) Should I e-mail the General Sales manager and ask them to send a bill? I asked people around and they told me they’ve never heard about situation like this – usually if they can’t finance – they ask to bring car back within a week.
    cool.gif Who’s screwing whom? Is this bank’s fault, my fault for driving away (i had 100% impression i was approved 1st time I drove away).
    C) What’s the nice recourse I have? (leave them $500 downpayment and they take car, what if they want more money for mileage)
    Please advice as I’m very lost at this point – I’m just afraid that if I just wait – the whole situation will not be in my favor.
    I decided I don’t want the car at all – all I want is a peace of mind.