New car dealership sales policies/contracts?

Question

The dealership made a new car contract with Ted. Low and behold a rare thing occurred where they could fine no back to finance the car. So now they want to write a new contract under different terms. What are the things Ted should watch out for in order to avoid being further scammed by the dealer? What are the "do's" and "dont's"?

It's already past the date promised for him to make the first car payment but there is no back to make out the payment to.

Answer 1

Give the Car back, and shop elsewhere.

Answer 2

"ted" did not get scammed, to start with.  I love how, when banks cannot approve the financing, its the dealer who has somehow 'gotten over'.  We don't sell a car until one has been paid for.  There is a lot more on the line for us than you.  If the deal doesnt go down, y ou get your old car back, down payment refunded, and you are back to square one.  On the dealer side, we get back a car with more miles than it left, sometimes damaged, salesmen and finance offices lose comission, and no one wins.  So how is this beneficial to the dealer?

You dont want this to happen?  Pay cash.  Or, get your financing pre-approved through an outside lender.  Check lendingtree.com, eloan.com, capitalone.com for some options.

If you elect to go forward at the terms the dealer was able to secure, all areas are re-opened for discussion.  If the APR goes up,  you can negotiate to keep the payments and term the same as the old deal.  That means renegotiating the price of the car, or any extras you may have purchased.

Keep in mind that there is a HUGE credit crunch right now.  People are defaulting on loans like never before.  In response, banks are more strict on loans, tighter on credit, and giving out smaller advances at higher rates.  Deals that were a slam-dunk a year ago are getting sent back today.  I see it all the time.  We, as dealers, work on YOUR behalf to get a loan secured - as I said, we gain nothing by unwinding a deal.  But its harder and harder to know what a bank will accept, and at what terms.  The business has changed dramatically in the last year.

Without looking at logs, I would guess that a year ago, I maybe unwound or re-contracted 5-6% of my deals.  Last month, it was over 15%.  Thats not because we are playing some shell game with the customers - its because lenders are tight as heck right now.  We are all on this boat together.

Answer 3

Tell Ted to go to a credit union and get his own financing.  Usually it's in the fine print of the contract that if for some reason he gives the car back he has to pay an outrageous fee per mile.