Life Advising a friend. - Page 4

Micjones · 07:03 PM

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?

**Saul Good** · 12-16-2009, 08:13 PM

Quote:

Originally Posted by Tylerthigpen!1!

College kid here. What do you mean by whole life insurance? And do most used car lots run this business model?

Whole life insurance is life insurance that has an investment component attached to it. You've probably heard of the Gerber policies that grandparents buy on their grandkids. For $15 a month you get $10,000 of coverage. It builds up cash value, so the kid can cash it in when they turn 16 and get about $3,000 to buy a car or something.

If you just buy term life insurance on a kid that age, $10,000 costs about $1 a month. You can invest that other $14 and wind up with more than double that amount. Most of the money for a whole life policy goes towards fees and commissions.

Most used car lots don't use this business model, but the "buy here pay here" places all do. Generally, you find them near liquor stores, pawn shops and payday loan stores. Just stay away.

If you ever think about taking out a car loan, find a financial calculator online. Plug in the monthly payment, the loan duration, and the 8%-10% interest rate you could be earning on that money if you invest it instead of buy a car with it.

If you buy a $20,000 with nothing down and finance it at 9% for 5 years including 6% sales tax, your monthly payment comes to $441. If you then trade that car in and do it again every 5 years, you will purchase 8 cars from age 25 to age 65 for a total purchase price of $160,000.

If you had invested that same monthly payment at 9% during the same period of time, you would retire with $2,080,000. Only $185,000 was from money that you saved. The rest is interest.

**Saul Good** · 12-16-2009, 08:16 PM

Seeing as you are a college kid, if you start at age 20 instead of 25, that final number moves from $2,080,000 to $3,300,000.

If you put away $500 a month starting at age 20 and get 9% on your money, you can retire a millionaire at age 50 even if you never save another dime.

**Mr. Flopnuts** · 12-16-2009, 08:18 PM

Quote:

Originally Posted by Tylerthigpen!1!

College kid here. What do you mean by whole life insurance? And do most used car lots run this business model?

If you're going to borrow money to buy a car, line up your own financing with a bank or credit union and go the lot to negotiate a cash price. If you can't do that, don't borrow money to buy a car. That's the best advice I can give on financing vehicles.

**OnTheWarpath15** · 12-16-2009, 08:19 PM

Quote:

Originally Posted by Saul Good

Seeing as you are a college kid, if you start at age 20 instead of 25, that final number moves from $2,080,000 to $3,300,000.

If you put away $500 a month starting at age 20 and get 9% on your money, you can retire a millionaire at age 50 even if you never save another dime.

Possibly a stupid question, but where are you getting 9% on your money?

**OnTheWarpath15** · 12-16-2009, 08:23 PM

Quote:

Originally Posted by Mr. Flopnuts

If you're going to borrow money to buy a car, line up your own financing with a bank or credit union and go the lot to negotiate a cash price. If you can't do that, don't borrow money to buy a car. That's the best advice I can give on financing vehicles.

Yep.

Exactly what we did.

Used Edmonds and others to determine invoice pricing on the car/options we wanted.

Secured financing through a credit union.

Went to the dealership that had what we were looking for in stock and told them, we'll give you "X" amount for this car, or we're walking out.

Best of both worlds - a $35K car for under $30K, and a super-low interest rate - and I didn't have to waste time trying to get fleeced by the dealership's finance manager.

**Saul Good** · 12-16-2009, 08:29 PM

Quote:

Originally Posted by OnTheWarpath58

Possibly a stupid question, but where are you getting 9% on your money?

Nowhere. Right now, I'm getting a hell of a lot more than that. The historical average of the stock market is about 12%. Inflation averages around 3%. That nets out at 9%.

**Saul Good** · 12-16-2009, 08:32 PM

Quote:

Originally Posted by OnTheWarpath58

Yep.

Exactly what we did.

Used Edmonds and others to determine invoice pricing on the car/options we wanted.

Secured financing through a credit union.

Went to the dealership that had what we were looking for in stock and told them, we'll give you "X" amount for this car, or we're walking out.

Best of both worlds - a $35K car for under $30K, and a super-low interest rate - and I didn't have to waste time trying to get fleeced by the dealership's finance manager.

That's a lot of jack to lay down for a car. What'd you get?

**Bwana** · 12-16-2009, 08:34 PM

A. If she keeps it she will pay at least 3X what the car is worth. 10K.......wow.

B. There is no way in hell she is getting her money back. She signed the contract and is on the hook for the car. They may tell her nicely to her face no, but the minute she drives off, they will be cracking up and that's all they will be talking about for two days.

Sorry dude, she's boned.

**OnTheWarpath15** · 12-16-2009, 09:05 PM

Quote:

Originally Posted by Saul Good

That's a lot of jack to lay down for a car. What'd you get?

Really? I think 30K is pretty average - and we spend a bit less than that.

**Saul Good** · 12-16-2009, 09:06 PM

I'm reeruned. What is that?

**OnTheWarpath15** · 12-16-2009, 09:10 PM

Quote:

Originally Posted by Saul Good

I'm reeruned. What is that?

Volkswagen CC

Built on Passat frame, but longer and sleeker. Also has bucket seats in the back instead of a bench.

Rides as nice as my cousin's Mercedes E350 coupe, and at almost half the price.

ClevelandBronco · 12-16-2009, 09:12 PM

She's so far beyond ****ed she couldn't catch a bus to ****ed.

badgirl · 12-16-2009, 09:15 PM

Quote:

Originally Posted by 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?

Lemon laws does not stand on a used car. IMO she can forget getting money back.

**Bugeater** · 12-16-2009, 09:30 PM

My only experience with a BHPH lot was when a girlfriend of mine bought a Chevette from one about 20 years ago. Sure she paid a bit more for it but she didn't have any credit, she ended up paying it off early, it actually worked out pretty well for her. Maybe they have become worse since then, I dunno. I know I would never go to one now, I always pay cash for my vehicles, your money goes so much farther that way.

**Saul Good** · 12-16-2009, 09:32 PM

Quote:

Originally Posted by OnTheWarpath58

Volkswagen CC

Built on Passat frame, but longer and sleeker. Also has bucket seats in the back instead of a bench.

Rides as nice as my cousin's Mercedes E350 coupe, and at almost half the price.

Nice. You may have noticed that I'm not a car guy (especially for a 31 y/o). I've got a six figure income, and my wife's car and my car combined probably aren't worth $10,000. They both look nice and drive perfectly, though.

I just can't justify shelling out money for a new car. (To myself. Nothing against anyone else buying one.) I bought mine for about $17,500 when it was 3-4 years old with 36,000 miles. It was in mint condition and would have run close to $40,000 new. I figure I'll hang onto it for about 3 more years and unload it. If I can get $1,500 for it, that puts it at under $200 per month.

My wife bought her car right out of college for $8,000. We'll probably get rid of hers about the same time as mine. (By then, all of the people who can't afford their cash for clunkers car should be unloading them for a song.) Her cost will be about $100 a month.

12-16-2009, 06:22 PM
Micjones Whose house? Join Date: Mar 2007 Location: KCMO Casino cash: $10005180	Advising a friend. 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? Last edited by Micjones; 12-16-2009 at 07:03 PM..
Posts: 15,344

12-16-2009, 08:16 PM	#47
Saul Good Quit your bullshit Join Date: Jul 2005 Location: Bored of winning Casino cash: $10052799	Seeing as you are a college kid, if you start at age 20 instead of 25, that final number moves from $2,080,000 to $3,300,000. If you put away $500 a month starting at age 20 and get 9% on your money, you can retire a millionaire at age 50 even if you never save another dime. __________________ Today is not a good day to be a pussy.
Posts: 41,870

12-16-2009, 08:34 PM	#53
Bwana It's Five O'Clock Somewhere Join Date: Aug 2000 Location: Billings, Montana Casino cash: $2135820532	A. If she keeps it she will pay at least 3X what the car is worth. 10K.......wow. B. There is no way in hell she is getting her money back. She signed the contract and is on the hook for the car. They may tell her nicely to her face no, but the minute she drives off, they will be cracking up and that's all they will be talking about for two days. Sorry dude, she's boned. __________________ Adventure is dangerous....but monotony can kill you.
Posts: 70,496

12-16-2009, 09:06 PM	#55
Saul Good Quit your bullshit Join Date: Jul 2005 Location: Bored of winning Casino cash: $10052799	I'm reeruned. What is that? __________________ Today is not a good day to be a pussy.
Posts: 41,870

12-16-2009, 09:12 PM	#57
ClevelandBronco I'm with the banned. Join Date: Sep 2006 Casino cash: $5658955	She's so far beyond **ed she couldn't catch a bus to **ed. __________________ "Faith and reason are like two wings on which the human spirit rises to the contemplation of truth ..." – Pope Saint John Paul II
Posts: 28,113

12-16-2009, 09:30 PM	#59
Bugeater The Maintenance Guy Join Date: Sep 2005 Location: Renovated Bugeater Estate Casino cash: $3992680	My only experience with a BHPH lot was when a girlfriend of mine bought a Chevette from one about 20 years ago. Sure she paid a bit more for it but she didn't have any credit, she ended up paying it off early, it actually worked out pretty well for her. Maybe they have become worse since then, I dunno. I know I would never go to one now, I always pay cash for my vehicles, your money goes so much farther that way.
Posts: 70,546