Advising a friend.

[Micjones]

So there's this girl at my job who is currently having a Hell of a time with her car dealership. It's one of those "buy here, pay here" lots. Her last car was repo'd after she missed a couple payments so she's been scrambling to find reliable transportation. Turns out that she moved a bit too quickly and took a flyer on a 2002 Ford that has upwards of 100K miles on it. A car that also brings with it a financial responsibility of right around $10,000. Obviously she's going to come out on the losing end of the deal. In all likelihood...the car will shoot craps long before she sees the light at the end of that contract.

So she tells me she's going to ask the dealership to refund both her first few payments and the initial down payment she remitted when she bought the car. Getting that money back is her end game.

I'm trying to talk some sense into her and help her realize that getting that money back at the expense of having this reported as another repo on your credit isn't a fair trade-off.

Am I wrong to suggest to her that the dealership is under NO legal responsibility to let her out of that contract?

She swears that she's going to get another car with an even LESS reputable lot. I tell her that they're going to see the open car loan and tell her to hit the bricks.

She's one of those people who talks her way out of everything with customer service personnel. But those are significantly smaller battles. Removal of NSF fees, refunds on hotel stays, etc. She's convinced she's going to win this fight. I think she's in BIG trouble.

Am I off-base here?

[BigMeatballDave]

Originally Posted by luv

Just don't offer to cosign.

He won't have to worry about that. Its a Buy Here Pay Here. Which means they finance, not a finance company. Those places will sell anyone a car.

[Mr. Flopnuts]

Originally Posted by OnTheWarpath58

Then they'll turn around and put that car back on their lot and sell it to the next sucker that walks in. These places make money hand over fist selling cars to begin with, and make even more money because in some cases, they sell the same car several times.

That's exactly why I put sell it at auction in quotations. They play the paperwork game and hold her on the hook for the delinquency balance, while being able to resell the same car on their own lot to the next sucker at the same rate. Used car sales is a helluva racket.

[Micjones]

That's what I tried to tell her OTWP.

She doesn't have the upper hand here.
They'd be foolish to write a contract in such a way that it gave the buyer an advantage.

[luv]

Originally Posted by OnTheWarpath58

I've been biting my tongue, but he's right. She ****ed up huge by buying from one of these places, and she's about to make it worse.

Then again, so does anyone else who buys from these lots.

I have a friend who used to work for one of these places, and finally grew a conscience and quit.

They'll keep every dime she's given them, and when she misses a payment, they'll take the car - and legally, there's nothing she can do.

Then they'll turn around and put that car back on their lot and sell it to the next sucker that walks in. These places make money hand over fist selling cars to begin with, and make even more money because in some cases, they sell the same car several times.

Also why they target people with no/bad credit. Higher likelihood they'll get the car back. They get so much money upfront, and charge a buttload on interest.

[Micjones]

Flops when she tries to get a car from this other dealership won't they see an open car loan and deny her application?

I'm hoping so... That'll be her saving grace.

[luv]

Originally Posted by BigChiefDave

He won't have to worry about that. Its a Buy Here Pay Here. Which means they finance, not a finance company. Those places will sell anyone a car.

Yeah, I know. That was my slam on myself. Trying to make a joke.

[Micjones]

Originally Posted by luv

Also why they target people with no/bad credit. Higher likelihood they'll get the car back. They get so much money upfront, and charge a buttload on interest.

It's insane. She's paying roughly $400 a month on this car.
It's almost 8 years old.

[luv]

Originally Posted by Micjones

It's insane. She's paying roughly $400 a month on this car.
It's almost 8 years old.

I'm guessing she might have gone five years on the loan? That's $24K. Even at four years, that's just over $19K. On an eight year old car.

[OnTheWarpath15]

Originally Posted by Micjones

It's insane. She's paying roughly $400 a month on this car.
It's almost 8 years old.

Jesus tapdancing Christ.

I just bought a brand new, $35K car, put no money down, and I'm not paying much more than that.

(Helps to have decent credit and be a smart consumer)

[OnTheWarpath15]

Originally Posted by luv

I'm guessing she might have gone five years on the loan? That's $24K. Even at four years, that's just over $19K. On an eight year old car.

Probably.

A place like that is willing to go longer term. All about the $.

You'll rarely, if ever see a real dealership find someone to finance a used car for more than 3 years. Unless the car is only a year or two old, and/or is ridiculously low on milage.

[wazu]

Originally Posted by luv

Also why they target people with no/bad credit. Higher likelihood they'll get the car back. They get so much money upfront, and charge a buttload on interest.

Usually the down payment covers the value of the car. Once they get a single customer to make that payment, they can repossess it over and over again and resell it over and over again for a ridiculous profit margin. Only costs are collection/repossession. They'll do it until the car breaks down and might actually cost them something significant to repair.

[OnTheWarpath15]

Originally Posted by Adam

Usually the down payment covers the value of the car. Once they get a single customer to make that payment, they can repossess it over and over again and resell it over and over again for a ridiculous profit margin. Only costs are collection/repossession. They'll do it until the car breaks down and might actually cost them something significant to repair.

This.

[luv]

Originally Posted by OnTheWarpath58

Probably.

A place like that is willing to go longer term. All about the $.

You'll rarely, if ever see a real dealership find someone to finance a used car for more than 3 years. Unless the car is only a year or two old, and/or is ridiculously low on milage.

I got a five year on my Lexus. It was 6 years old when I bought it, and it has about 65K miles. I was able to get it without a cosigner. My credit was halfway decent (this was before my stupidity). That thing will go forever though. A GM, not so much.

And mine is financed through a bank.

[WilliamTheIrish]

Mic, I recall a similar story (possibly a title loan(?) from you about another friend). Is this the same person?

Let her learn the lesson.

[OnTheWarpath15]

Originally Posted by luv

I got a five year on my Lexus. It was 6 years old when I bought it, and it has about 65K miles. I was able to get it without a cosigner. My credit was halfway decent (this was before my stupidity). That thing will go forever though. A GM, not so much.

And mine is financed through a bank.

That car is low mileage, and is a higher quality of car. Not surprised at all by your terms.

I guess my point was, you're not going to see a bank give out a 5 year, $10K car loan on a 1999 Malibu with 110K miles.