unbillievable Posted August 27, 2015 Posted August 27, 2015 I recently purchased a used car. During financing, the salesperson convinced me to buy an extended maintenance and service package. While I tried to get into specifics he kept insisting that it would only raise my payments by $10/month. I calculated that it would raise my principal only $600 at that price and was worth it, so I accepted. He didn't contradict me and even re-inforced the idea by showing me a brochure close to the price. I signed the pile of papers and moved on. At home I had time to go over the stack of forms carefully, and while it was highlighted that our agreed upon monthly was only $10/month more like he said, the final principal was raised $4500 instead of $600 as I figured. It took me time to figure out how he did it, but the dealership increased the interest rate to come up with the initial monthly figure, then lowered it and pocketed the difference. The next day I immediately went back and canceled the maintenance package. They told me that it would take 4-6 weeks to clear the refund and would be delivered to the lean holder, not me. Perfectly reasonable. I waited two months with nothing happening. I called and they again repeated that it would go to the lean holder (which I said was fine) but it might be a little longer. I waited another month. This time they told me they don't know what is going on and that they would email their Financial branch (in another city) for the holdup. They told me that they would call me with more information when they get it. It's been a week. My question, is what can I do now? Do I see another loan officer to see if he's lying? (have been working with the same guy) Do I see his manager? (not sure that changes anything) A lawyer? (a bit extreme) what do I need to show? Should I be asking for copies of the cancelation? (which I don't have)
Nervous Guy Posted August 27, 2015 Posted August 27, 2015 Contact BBB or your state's Consumer Protection Agency or state AG?
plenzmd1 Posted August 27, 2015 Posted August 27, 2015 (edited) I have no idea on how those things work, other than the fact the financing guy I would think gets at least 20% chop of the package, and he might not be able to pay back that $ 1000 commission. I would go directly to the GM of the dealership and let him know the situation. Let him know you are prepared to go to BBB etc. Also call that other financial branch and see where this site. Edited August 27, 2015 by plenzmd1
NoSaint Posted August 27, 2015 Posted August 27, 2015 (edited) i assume this is a large dealership? after the guy ripped me off and lied once, the leash would be pretty short. id want some written confirmation of the refund and timeline. id talk to the bank right up front to make sure they are expecting it and it sounds like standard practice to them. after the 4-6 week promise, on the day 6 weeks closed id have likely been having a nice chat with anyone there above him. possibly on a busy saturday morning in their lobby where other potential buyers could hear about their scam. then id start looping in their corporate office and if you have any legal type friends maybe get a quick letter sent over demanding the refund. there would definitely not be an over 3 month period without pushing the issue, if i felt they legit ripped me off and it wasnt an honest mistake. Edited August 27, 2015 by NoSaint
Saxum Posted August 27, 2015 Posted August 27, 2015 Do you have locally a radio station, newspaper or tv station which does consumer action pieces? Locally WTOP has "Call for Action". Contact them to see if they have interest which will put spotlight on this practice.
BringBackFergy Posted August 27, 2015 Posted August 27, 2015 Two things: 1) Typically, a dealer (or anyone arranging financing for you) has to give you either a good faith estimate of costs or a Truth in Lending form which shows the APR (Annual Percentage Rate) for your loan. APR is the interest rate plus closing costs that gives you a snapshot of the cost of your loan over the term. There are many, many laws out there that control when the TIL must be given or signed (mostly in the real estate field but I'm thinking there are some regulations re. car loans and consumer credit transactions like this as well.) Had you seen an accurate Good Faith Estimate or a TIL when you signed, you would have seen a percentage interest rate that was wayyyyy higher than they promised. If they didn't have you sign one, then see Item 2 below. 2) The best department to call in NYS is the NYS Banking Department. Anyone lending money (and any party receiving a commission on financing packages like a dealer) are governed by very strict laws that require certain disclosures. If they didn't provide you with all the information or if your request to cancel the maintenance package is not be addressed, the Banking Department can provide some good influence which may speed things up (because car dealers make a ton of dough off financing packages (for instance, when you finance a car at 3%, their "partner bank" may only be loaning the money to the dealer at 1.5% - meaning the dealer is making 1 1/2 % on your deal over 5 years. Therefore, if you threaten their livelihood as far as financing goes for other sales, they may respond a lot quicker....especially if the State Banking Department investigates or makes a few calls. Just my opinion.
Marv's Neighbor Posted August 27, 2015 Posted August 27, 2015 Most states allow a 24-36 hour period for you to cancel. You can: contact BBB, consider small claims court to recover your money-pain in the as* but you would likely win, or take it to your local TV station that is big on consumer advocate stuff. If they get behind it, that's better, because the typical car dealer hates bad publicity. Sounds like the finance guy was a real snake!
unbillievable Posted August 27, 2015 Author Posted August 27, 2015 Two things: 1) Typically, a dealer (or anyone arranging financing for you) has to give you either a good faith estimate of costs or a Truth in Lending form which shows the APR (Annual Percentage Rate) for your loan. APR is the interest rate plus closing costs that gives you a snapshot of the cost of your loan over the term. There are many, many laws out there that control when the TIL must be given or signed (mostly in the real estate field but I'm thinking there are some regulations re. car loans and consumer credit transactions like this as well.) Had you seen an accurate Good Faith Estimate or a TIL when you signed, you would have seen a percentage interest rate that was wayyyyy higher than they promised. If they didn't have you sign one, then see Item 2 below. 2) The best department to call in NYS is the NYS Banking Department. Anyone lending money (and any party receiving a commission on financing packages like a dealer) are governed by very strict laws that require certain disclosures. If they didn't provide you with all the information or if your request to cancel the maintenance package is not be addressed, the Banking Department can provide some good influence which may speed things up (because car dealers make a ton of dough off financing packages (for instance, when you finance a car at 3%, their "partner bank" may only be loaning the money to the dealer at 1.5% - meaning the dealer is making 1 1/2 % on your deal over 5 years. Therefore, if you threaten their livelihood as far as financing goes for other sales, they may respond a lot quicker....especially if the State Banking Department investigates or makes a few calls. Just my opinion. Not sure about it but.. I think the Credit Union paid off the balance of the car to the dealer and now they hold my loan exclusively. The problem is that the statements only come every quarter, so I don't know if the dealership has refunded the money to them until I check the balance history. The local credit union has no online/phone service to check myself (technically it's available, but actually doesn't work). I have to go to the physical bank and speak to a representative. (which is the reason I waited 3 months since it's a pain to keep checking, -probably why they use this institution) I'm considering the BBB and lawyer, but didn't think about involving the news. I'd hate to take it that far unless it gets to ridiculous levels of incompetence. I figure it's costing me about $7/month extra in interest.
USMCBillsFan Posted August 27, 2015 Posted August 27, 2015 I'm a Business/Finance Manager at a dealership. You can cancel a service contract anytime and if you simply cancel it on the car you're paying on the refund will go to the bank. I'm not sure what company was used for your package but I know the one we use takes 4-6 weeks to issue a refund. If you were trading the car and cancelled your service contract the refund would come to you because the loan it's under would be paid off by the dealership. You're best bet would be to contact the warranty company from which you cancelled to see the status of the refund. I know at my dealership they are sent right away but I can see dealerships delaying the process because there is a "chargeback" on that profit. It's one of the things I hate about this job is that there are very "shady" finance people out there and that's something I have to overcome. I'm one of the few honest ones but I have a military retirement and VA disability check that comes in every month so I'm not desperate to make money. But keep in mind that most Finance Managers are only paid on profit from extended service contracts and maintenance packages. Yet rate can be marked up a certain percentage and they are paid on that profit too, however, all the warranty or environmental packages (undercoating, rust proofing...etc..) we sell are well worth the money we charge. We don't gouge our customers. Two things: 1) Typically, a dealer (or anyone arranging financing for you) has to give you either a good faith estimate of costs or a Truth in Lending form which shows the APR (Annual Percentage Rate) for your loan. APR is the interest rate plus closing costs that gives you a snapshot of the cost of your loan over the term. There are many, many laws out there that control when the TIL must be given or signed (mostly in the real estate field but I'm thinking there are some regulations re. car loans and consumer credit transactions like this as well.) Had you seen an accurate Good Faith Estimate or a TIL when you signed, you would have seen a percentage interest rate that was wayyyyy higher than they promised. If they didn't have you sign one, then see Item 2 below. 2) The best department to call in NYS is the NYS Banking Department. Anyone lending money (and any party receiving a commission on financing packages like a dealer) are governed by very strict laws that require certain disclosures. If they didn't provide you with all the information or if your request to cancel the maintenance package is not be addressed, the Banking Department can provide some good influence which may speed things up (because car dealers make a ton of dough off financing packages (for instance, when you finance a car at 3%, their "partner bank" may only be loaning the money to the dealer at 1.5% - meaning the dealer is making 1 1/2 % on your deal over 5 years. Therefore, if you threaten their livelihood as far as financing goes for other sales, they may respond a lot quicker....especially if the State Banking Department investigates or makes a few calls. Just my opinion. You're pretty accurate Fergy. The bank contract the customer signs shows all the information such as APR, total interest paid over the loan, monthly payments etc... Many times when a customer is quoted a price an "average" interest rate is used because until credit is ran and the deal is submitted to the bank the actual interest rate is not known. Sometimes their credit warrants a better rate and sometimes the rate can come back higher. We don't know what a customers debt to income ratio is when it's sent and that can effect rate. So a customer can have a 700 credit score and get a higher rate because DTI or PTI (payment to income) may cause the rate to be a little higher. We're not all crooks!
unbillievable Posted August 28, 2015 Author Posted August 28, 2015 I'm a Business/Finance Manager at a dealership. You can cancel a service contract anytime and if you simply cancel it on the car you're paying on the refund will go to the bank. I'm not sure what company was used for your package but I know the one we use takes 4-6 weeks to issue a refund. If you were trading the car and cancelled your service contract the refund would come to you because the loan it's under would be paid off by the dealership. You're best bet would be to contact the warranty company from which you cancelled to see the status of the refund. I know at my dealership they are sent right away but I can see dealerships delaying the process because there is a "chargeback" on that profit. It's one of the things I hate about this job is that there are very "shady" finance people out there and that's something I have to overcome. I'm one of the few honest ones but I have a military retirement and VA disability check that comes in every month so I'm not desperate to make money. But keep in mind that most Finance Managers are only paid on profit from extended service contracts and maintenance packages. Yet rate can be marked up a certain percentage and they are paid on that profit too, however, all the warranty or environmental packages (undercoating, rust proofing...etc..) we sell are well worth the money we charge. We don't gouge our customers. You're pretty accurate Fergy. The bank contract the customer signs shows all the information such as APR, total interest paid over the loan, monthly payments etc... Many times when a customer is quoted a price an "average" interest rate is used because until credit is ran and the deal is submitted to the bank the actual interest rate is not known. Sometimes their credit warrants a better rate and sometimes the rate can come back higher. We don't know what a customers debt to income ratio is when it's sent and that can effect rate. So a customer can have a 700 credit score and get a higher rate because DTI or PTI (payment to income) may cause the rate to be a little higher. We're not all crooks! Is it better to deal with the financial manager (dealership) or go straight to the office holding the service package?
NoSaint Posted August 28, 2015 Posted August 28, 2015 Is it better to deal with the financial manager (dealership) or go straight to the office holding the service package? Id venture not the financial guy if that's the same one that's gotten no results in fixing this after causing it
unbillievable Posted August 28, 2015 Author Posted August 28, 2015 Pay in full next time. That wouldn't change my problem. They'd just be writing the refund check to me instead of the bank.
USMCBillsFan Posted August 28, 2015 Posted August 28, 2015 Is it better to deal with the financial manager (dealership) or go straight to the office holding the service package? If you want to cancel your service/maintenance contract you should go to the finance manager. You will need to do an odometer statement and that's what is sent to the service contract company used to cancel. If you've already done this I would contact the service contract company directly to find out the status of your cancellation and refund.
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