Is true what my car salesman told me?

Question

I bought a new car this weekend. The last part of the deal was in the finance office. They guy told me that if I didn't buy GAP insurance and the extended service plan that I would have a lot higher interest rate on my loan, or that the bank may not even want to give me the loan. I told them I didn't want it, so they made me talk to all these different "managers" about why I needed these extras. It was so frustrating because I had my kids with me and it was getting late at night. So finally I got to the point I just wanted to get out of there so I bought everything. This is why I HATE going to new car dealerships. I don't think I'll ever buy one again. I have bought 3 cars at CARMAX. I love that place. They are used cars, but you can usually find low millage cars. The prices are set, they don't haggle, and they don't give you a lot of bull if you tell them you don't want any extras.

Answer 1

I don't think Carmax is a good example of a reputable dealer, but it is true that you do not need to buy GAP insurance to get a better rate. It is a wise idea to have though unless you have made a substantial down payment so you aren't "upside down" on the loan. As far as the extended service plan..that is a big moneymaker for the dealers. It also is not required by the bank or any lending institution to secure a better rate.  

Answer 2

no.  The bank doesn't really care if you purchase the extension.  The loan is still the loan.  You have to pay for the car loan no matter what.

It is just a way to make your payments higher, and get more money from you.  

Answer 3

You were right, there is absolutely no law that says you have to buy an extended service plan or GAP insurance to purchase a vehicle.

Answer 4

He was lying to you.

If you want to purchase a new car from a dealership, you should get pre-approved first and then go online and get quotes.  In this day and age you shouldn't have to sit in a showroom/sales office where they got you by the cojones!

Answer 5

You got screwed. Or as we call it, "put together". You went to a turn-over house, the worst place ever to buy a car. At a T.O. house, they'll turn you from one person to another until you cave in. They apply so much pressure that they get you to a point where you'll sign anything just to get yourself out of there.

You made 4 huge mistakes:

1) going to a T.O. house

2) showing how badly you wanted the car

3) going late at night

4) going with your kids

The last three told the salesman, the sale manager and the finance manager they had a pigeon. And they worked you until they put you together.

You could have walked out at any time but you didn't. That told them how emotionally attached you were to get that car then and there. You went late at night so they knew if they kept you long enough, you'd cave in because you saw the dealer start to close up and just wanted to buy the car and go home. And bringing you kids along told them how much urgency you felt in getting them home. So they knew they could hammer you into submission.

This kind of dealer employs the "old blue suede shoes" style of selling. They give us honorable dealers a major black eye. We wish we could force all T.O. houses out of business.

GAP insurance and extended warranties are always optional. No lender will ever force anyone to buy them in order to approve them ... unless you're buying a used car, want a 60 month term on it and your debt-to-income ratio is near the limit. Then they want you to buy the extended warranty to protect themselves.

People in that situation will not fix a car if it's too expensive. They stop making payments on a car they cant drive. So the lender repo's the car, has to fix it themselves and sue the driver for all costs. That's the only instance in which a lender may require an extended warranty. But they never require GAP insurance.

What you need to do is kick youself in the butt for being such a pigeon. Call the Better Business Bureau immediately and file a complaint against them. Then contact the issuer of the GAP and extended warranty coverage. Tell them you don't want it.Make sure they record your wish on their records. Then call the finance manager at the dealership and tell him to unwind both contracts. And that you've already contacted both issuers about this.

If he refuses to, or transfers you to somebody else, call the owner and let him know you've taken all these steps already and you want out of the GAP and extended warranty immediately. Don't let anyone at the dealer intimidate you. You have consumer protection with the BBB and your local consumer affairs bureau.

One last bit of info ... ALL extended warranty and GAP contracts can be recinded at any time. These are not the same as signing a contract to buy the car. You can change your mind at any time. So don't let them tell you it's impossible. It's not. The only reason they will make it seem that way is because they get a huge spiff from the owner for selling these.

Make them unwind them or take further action against them in small claims court. Yes, you did sign up for them. But you did it under duress and they lied to you about the need to have it. That constitutes fraud.

Good luck.

Answer 6

he just took you money is all ..more he gets out of you the more he gets to put in pocket

Answer 7

Probably not true, If they started hasseling me like that I would have got up and left. There are plenty of car dealers in the world. You should punish the bad ones by shopping elsewhere.  

Answer 8

you didn't need to buy those things.  the GAP would be somehting the bank would tell you, not the dealer, if you actaully needed.

the extended warranty was just him sucking money out of you... but the good news is you can opt out of those on most cars and they have to give back the prorated difference, which at this point is nearly all of it.

go to a competeing dealership that you know someone at, they can tell you how to opt out, then go do it.

Consumer Reports says there is virtually no good reason to buy an extended warranty.  they are money makers for the dealer, which is why they hard sold you on it.  the only exceptions that CR gives is if you live in Alaska, Maine, Minnesota or Canada, as the cold wears things out, or if you live in the desert part of the southwest as the heat wears things out.  the other time is if you buy a European brand car as they have the highest breakdown index on the market and cost more to repair as well.

Answer 9

Absolutely not true.

Once you get your financing in order, go into the dealership and state that you want to cancel the GAP and the Extended warranty.

You have the right to cancel these at any time and will receive a pro-rated portion of the amount you paid.  In this case, almost the entire amount.

You could even lie and say that you decided to trade in the car to another dealership if they give you a hard time.

When it is all said and done, file a complaint with the Better Business Bureau about they shady business practices.

CarMax is ok for some, but not for experienced carbuyers.  Their used cars are extremely overpriced.

Next time you purchase a car, get pre-approved through a Credit union or bank, first.  This will prevent a car dealer from treating you this way.

Answer 10

It's not true that you must buy the extras to get a lower interest rate.

You may be able to cancel the extras. Read your documents.

Think twice about cancelling your GAP insurance, especially if you have a long-term loan -- 60 months or more -- or made very little down payment. GAP protects you if your car is stolen or totaled in an accident and your insurance doesn't pay enough to pay off your loan. It's good to have in that situation.