Author Topic: Ridiculous Things Dealerships Say and Do  (Read 38880 times)

TheGrimSqueaker

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Re: Ridiculous Things Dealerships Say and Do
« Reply #150 on: January 06, 2017, 07:03:25 AM »
They don't "just take your keys" or "just lock you in," they lie to you or convince you to willingly go along with it. It's sales tactics, not kidnapping. There's a slight difference.

I've never gotten caught with the key-handing-over thing. But leaving you in an office "for five minutes" while they "go talk with a manager" is normal, and they frequently lock the door behind them. If called on it, they will say it was "on accident" (not "by accident", that would be proper grammar). There's a major Ford dealership in town that's known for it. They actually got their fingers slapped a few years ago when someone they locked in called 911. (No, it wasn't me.) Obviously nobody would actually arrest or charge a major auto dealer who contributes to all the major political campaigns: it would be on par with requiring real estate developers to conform with building codes or requiring Wal-Mart to follow liquor licensing laws and procedures.

I can't say whether Bob Turner Ford actually changed what they were doing. I'm not inclined to get close enough to the quicksand to find out where the edge is.

I solve the problem by buying vehicles from people I know who do not engage in these practices. But if you just walk in off the street, you're pretty much fresh meat.
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Re: Ridiculous Things Dealerships Say and Do
« Reply #151 on: January 06, 2017, 08:54:38 AM »
FWIW, we've had much better luck going with small-time, independent (used car) dealers.  Several years ago, we were in the market for a minivan.  We went to the big dealer near us, took one for a test drive, and told them our budget.  They came back with a number $2500 higher.  We told them "this is how much we have to spend, sorry."  They tried to do the whole four-square thing, but we were young and naive and stubborn and ignored any numbers except the OTD price, and just told 'em that our budget wasn't flexible.   We walked out of there without a van that day.


Sounds to me like you were a badass :)
It was more a matter of "we want to buy product X at price $Y, will or won't you sell us X for $Y?" situation.  The salesman seemed honestly baffled and kept trying to go back to his four-square script.

While he didn't lock us in an office (they had cubicles), we did find ourselves left alone for long periods of time.

BlueMR2

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Re: Ridiculous Things Dealerships Say and Do
« Reply #152 on: January 06, 2017, 10:23:14 AM »
But leaving you in an office "for five minutes" while they "go talk with a manager" is normal, and they frequently lock the door behind them.

I wonder how often they have to replace doors that irate locked in ex-customers end up just breaking down to get out?

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Re: Ridiculous Things Dealerships Say and Do
« Reply #153 on: January 06, 2017, 10:32:55 AM »
I'd call 911 if I was locked into an office and knocking on the door didn't get me out in a matter of seconds. Fire hazard! Or being held against your will. Either way- NOT cool.

But all the dealerships I dealt with had you sit in an open area, the sales guy had to keep going to "talk to his manager".

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Re: Ridiculous Things Dealerships Say and Do
« Reply #154 on: January 09, 2017, 12:02:22 PM »
It is not. The classic maneuver is they take your car keys, for some random reason, when you come in to the dealer. Never give up your car keys unless everyone has signed a trade-in agreement.

They'll also make you wait in the office to wear you down, far too often.

Dirty tricks. Easy to fuck with them if you know what's up.

I brought both sets of keys with me when I was planning to trade my car.  It was becoming clear that the deal wasn't going to go through, so I asked for my keys.  Salesman said the used manager had them.  I said. "My car is right there.  Either give me my keys now, or mail them to me.  You have my address.  Either way, I'm leaving."  Keys were in my hand in under a minute.

I suppose they could have just "lost" them, but this was back when keys were only $5 to replace at the hardware store.

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Re: Ridiculous Things Dealerships Say and Do
« Reply #155 on: January 09, 2017, 02:40:59 PM »
wow great read.

Best story I have is 12+ years ago (last time I shopped for a car!) first dealer I went to wanted to run my credit and photo copy my drivers license before I had even seen any cars.  I was rather "data privacy" oriented at the time and said no.  Sales man did not react well to me not giving him my drivers license and I walked out shortly there after.  Wonder if I would have got it back - had not considered that aspect!  I think I did see a guy locked in an office and it stuck me as odd, guy did not look happy.  Contributed to a bad vibe there.  After I started walking out salesman followed me and was yelling at me to come back. 

Next time I have to go car shopping I will take my lock pick set with me :-)  Seeing the expression on the sales guys face after I 'escape' from an office would be priceless.  Hell that might be worth a trip to a dealer this weekend :-)  Or maybe it would be more fun to just starting making announcements over the intercom "Talk to Jim about our 2017 F150 for 5000$!!!"
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Tasty Pinecones

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Re: Ridiculous Things Dealerships Say and Do
« Reply #156 on: January 09, 2017, 03:28:41 PM »
FWIW, we've had much better luck going with small-time, independent (used car) dealers.  Several years ago, we were in the market for a minivan.  We went to the big dealer near us, took one for a test drive, and told them our budget.  They came back with a number $2500 higher.  We told them "this is how much we have to spend, sorry."  They tried to do the whole four-square thing, but we were young and naive and stubborn and ignored any numbers except the OTD price, and just told 'em that our budget wasn't flexible.   We walked out of there without a van that day.


We were at a dealer that did this and we discovered they had a webcam pointed at us from between some books on a shelf. Listening and watching while they left us alone. No thanks. We walked.

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Re: Ridiculous Things Dealerships Say and Do
« Reply #157 on: January 09, 2017, 03:32:04 PM »
FWIW, we've had much better luck going with small-time, independent (used car) dealers.  Several years ago, we were in the market for a minivan.  We went to the big dealer near us, took one for a test drive, and told them our budget.  They came back with a number $2500 higher.  We told them "this is how much we have to spend, sorry."  They tried to do the whole four-square thing, but we were young and naive and stubborn and ignored any numbers except the OTD price, and just told 'em that our budget wasn't flexible.   We walked out of there without a van that day.


We were at a dealer that did this and we discovered they had a webcam pointed at us from between some books on a shelf. Listening and watching while they left us alone. No thanks. We walked.

That might be a felony in some states...might make for an interesting certified letter from an attorney a day or two later.

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Re: Ridiculous Things Dealerships Say and Do
« Reply #158 on: January 09, 2017, 09:42:23 PM »
Dealer is still there but my story is probably 15 years old.

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Re: Ridiculous Things Dealerships Say and Do
« Reply #159 on: January 09, 2017, 11:25:22 PM »
Dealer is still there but my story is probably 15 years old.

I'm just picturing the grainy resolution on an over-the-counter 2002 webcam/monitor set up.
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Re: Ridiculous Things Dealerships Say and Do
« Reply #160 on: January 10, 2017, 02:57:34 PM »
My first new car purchase story (I’ve purchased 2 cars new but have now repented).   I had just graduated with an Accounting degree.  I was reading all documents they handed to me when I saw one titled “4 corners.”   I told the salesman that I had just had this in business law that semester and we talked about it briefly. 

The next day, the dealership’s financial office calls and tells me that my credit score wasn’t high enough and I had to put down another $1000.  I not-so-politely told him that I signed the 4 corners paper and they could come get the car now.   I kept the car for 8 years but told everyone I could about this incident.  The dealership changed owners about a year after my purchase but there is no way I would ever buy anything from any business on that location.   

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Re: Ridiculous Things Dealerships Say and Do
« Reply #161 on: January 10, 2017, 03:14:00 PM »
My first new car purchase story (I’ve purchased 2 cars new but have now repented).   I had just graduated with an Accounting degree.  I was reading all documents they handed to me when I saw one titled “4 corners.”   I told the salesman that I had just had this in business law that semester and we talked about it briefly. 

The next day, the dealership’s financial office calls and tells me that my credit score wasn’t high enough and I had to put down another $1000.  I not-so-politely told him that I signed the 4 corners paper and they could come get the car now.   I kept the car for 8 years but told everyone I could about this incident.  The dealership changed owners about a year after my purchase but there is no way I would ever buy anything from any business on that location.

Can you elaborate on the "4 corners" and why this is important?

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Re: Ridiculous Things Dealerships Say and Do
« Reply #162 on: January 10, 2017, 03:20:54 PM »
My first new car purchase story (I’ve purchased 2 cars new but have now repented).   I had just graduated with an Accounting degree.  I was reading all documents they handed to me when I saw one titled “4 corners.”   I told the salesman that I had just had this in business law that semester and we talked about it briefly. 

The next day, the dealership’s financial office calls and tells me that my credit score wasn’t high enough and I had to put down another $1000.  I not-so-politely told him that I signed the 4 corners paper and they could come get the car now.   I kept the car for 8 years but told everyone I could about this incident.  The dealership changed owners about a year after my purchase but there is no way I would ever buy anything from any business on that location.

Can you elaborate on the "4 corners" and why this is important?

I think he's talking about the four-square technique many dealers use.

https://consumerist.com/2007/03/30/dealerships-rip-you-off-with-the-four-square-heres-how-to-beat-it/

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Re: Ridiculous Things Dealerships Say and Do
« Reply #163 on: January 10, 2017, 04:27:12 PM »
Thank you, I was wondering what that was all about, too. Never saw this particular sales technique in action but then again I've never purchased a new car and every used vehicle I've ever bought I did let them know straight ahead that I was paying cash. Maybe that's why they never bothered.

It just surprises me that people really are that stupid and don't even ask how long they'll be paying for. The first thing I would do in any sales pitch is get out my calculator and run the numbers. And if I ended up with a number twice or three times as much as the total cost of the car in that top right corner I'd start asking some serious questions.
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Kitsune

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Re: Ridiculous Things Dealerships Say and Do
« Reply #164 on: January 10, 2017, 04:56:35 PM »
We want to buy our first car. We research price, call to make sure they have what we want, make an appointment (!!!), show up, look around, confirm price/interest, and I say I'm willing to sign papers after a test drive.

Sales dude: "oh, you have to put down 500$ towards the cost of the car in order to be able to test drive that model." (A Honda Fit, not, like, a BMW or whatever)

Hahaha. Hahahahaha. Ha. HA.

yeah, what's about fuck no?

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Re: Ridiculous Things Dealerships Say and Do
« Reply #165 on: January 10, 2017, 05:25:39 PM »
My first new car purchase story (I’ve purchased 2 cars new but have now repented).   I had just graduated with an Accounting degree.  I was reading all documents they handed to me when I saw one titled “4 corners.”   I told the salesman that I had just had this in business law that semester and we talked about it briefly. 

The next day, the dealership’s financial office calls and tells me that my credit score wasn’t high enough and I had to put down another $1000.  I not-so-politely told him that I signed the 4 corners paper and they could come get the car now.   I kept the car for 8 years but told everyone I could about this incident.  The dealership changed owners about a year after my purchase but there is no way I would ever buy anything from any business on that location.

Can you elaborate on the "4 corners" and why this is important?

I think he's talking about the four-square technique many dealers use.

https://consumerist.com/2007/03/30/dealerships-rip-you-off-with-the-four-square-heres-how-to-beat-it/

I've heard extensively of the "four squares" as a sales gimmick, but not as a document to be signed.

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Re: Ridiculous Things Dealerships Say and Do
« Reply #167 on: January 11, 2017, 06:32:02 AM »
We want to buy our first car. We research price, call to make sure they have what we want, make an appointment (!!!), show up, look around, confirm price/interest, and I say I'm willing to sign papers after a test drive.

Sales dude: "oh, you have to put down 500$ towards the cost of the car in order to be able to test drive that model." (A Honda Fit, not, like, a BMW or whatever)

Hahaha. Hahahahaha. Ha. HA.

yeah, what's about fuck no?

That's freaking insane. When I test drove a BMW (my Dad wanted an opinion on the car he wanted...) they let me keep it overnight and all they did was held a copy of my drivers license.  $500 to test drive a FIT? 

(My Honda dealership wasn't that crazy at all, thankfully.)

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Re: Ridiculous Things Dealerships Say and Do
« Reply #168 on: January 11, 2017, 06:44:29 AM »
We want to buy our first car. We research price, call to make sure they have what we want, make an appointment (!!!), show up, look around, confirm price/interest, and I say I'm willing to sign papers after a test drive.

Sales dude: "oh, you have to put down 500$ towards the cost of the car in order to be able to test drive that model." (A Honda Fit, not, like, a BMW or whatever)

Hahaha. Hahahahaha. Ha. HA.

yeah, what's about fuck no?

When the dealers know they have the hottest car(s) on the market they will take max advantage. It's business, can be perceived as being pricks. If one can't put down $500 to test drive, then they probably can't afford it, and separates the browsers from the buyers.
When the 1st Gen Honda Fit first was released in the US in mid-2006, dealers were asking $3000 over MSRP. My nearest Honda dealer is near a lareg state university campus and they had tons of Fits being bought. My wife liked it, but for a much lower price, we got a brand new redesigned 8th Gen Civic. She's still driving it.
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Mezzie

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Re: Ridiculous Things Dealerships Say and Do
« Reply #169 on: January 11, 2017, 06:50:09 AM »
I used a credit union guaranteed pricing program for the 2013 Leaf I bought last month. I waited until I found a car with the mileage, color, and price I wanted, then I reserved it and made an appointment. When the quote was confirmed, I wrote my check. The salesperson stuttered, "Wait.. you need to talk to financing first," but that was my plan.

I went into financing, and had my check ready. The financer kept trying to add warranties I didn't need (it actually came with an excellent warranty already), etc. to which I kept saying, "Well, I already wrote the check, so I guess not." Eventually she got the point, and every time she offered something (which I'm sure she was required to do), she began, "You probably don't want to write a new check for X..."

Smart woman. :) If we could have skipped it all, it would have been better, but at least she was nice about it.
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Re: Ridiculous Things Dealerships Say and Do
« Reply #170 on: January 11, 2017, 07:18:29 AM »
Mezzie, she may have just been doing her job and has to try upsell each product 3 times. The bosses in the glass tower may be watching.
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Re: Ridiculous Things Dealerships Say and Do
« Reply #171 on: January 11, 2017, 07:20:28 AM »

Can you elaborate on the "4 corners" and why this is important?


It stated that the sales contract was complete and that no verbal representations made are enforceable. Thus, only the terms written in the four corners of the contract are valid.  Thus the salesman could tell me that the car could get 75 mpg but if I didn't have it in writing, I'd have no recourse for damages. 

My business law class was a long time ago so I googled the phrase and see this comment on FindLaw.com   NOTE: The number of states that accept the four corners rule is in decline.   So I guess its archaic knowledge now.

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Re: Ridiculous Things Dealerships Say and Do
« Reply #172 on: January 11, 2017, 07:50:48 AM »
Sales dude: "oh, you have to put down 500$ towards the cost of the car in order to be able to test drive that model." (A Honda Fit, not, like, a BMW or whatever)

Hahaha. Hahahahaha. Ha. HA.

yeah, what's about fuck no?
When the dealers know they have the hottest car(s) on the market they will take max advantage. It's business, can be perceived as being pricks. If one can't put down $500 to test drive, then they probably can't afford it, and separates the browsers from the buyers.
I can pay cash for a 911 Turbo S if I wanted to. That's not the point; I'm not interested in the time wasting or aggravation that writing a check for $500 and then getting that check back represents.

If a dealership doesn't want to let me test drive a car without playing games, the next dealer will, or the one after that. Life's too short for bullshit time-wasting games.

Kitsune

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Re: Ridiculous Things Dealerships Say and Do
« Reply #173 on: January 11, 2017, 07:54:08 AM »
Sales dude: "oh, you have to put down 500$ towards the cost of the car in order to be able to test drive that model." (A Honda Fit, not, like, a BMW or whatever)

Hahaha. Hahahahaha. Ha. HA.

yeah, what's about fuck no?
When the dealers know they have the hottest car(s) on the market they will take max advantage. It's business, can be perceived as being pricks. If one can't put down $500 to test drive, then they probably can't afford it, and separates the browsers from the buyers.
I can pay cash for a 911 Turbo S if I wanted to. That's not the point; I'm not interested in the time wasting or aggravation that writing a check for $500 and then getting that check back represents.

If a dealership doesn't want to let me test drive a car without playing games, the next dealer will, or the one after that. Life's too short for bullshit time-wasting games.

I... can be a bit aggressive when pissed off.

My next ACTUAL move was to ask for 5 minutes to check something, and take out my cell phone and call the other Honda dealership in the city, explain the situation, and ask if they were interested in doing business with us. In front of the sales dude. And then book an appointment in front of him.

After which I hung up and was basically like "I guess that solves that, we won't be needing your help with this. Paying for a test drive is nonsense. Good luck with that sales tactic."

For the record: we bought a Honda Fit, at a reasonable price, at the second dealership, and have been driving it ever since. Love that car. But MAN I've warned everyone I can away from Dealership #1.

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Re: Ridiculous Things Dealerships Say and Do
« Reply #174 on: January 11, 2017, 08:00:35 AM »
Sales dude: "oh, you have to put down 500$ towards the cost of the car in order to be able to test drive that model." (A Honda Fit, not, like, a BMW or whatever)

Hahaha. Hahahahaha. Ha. HA.

yeah, what's about fuck no?
When the dealers know they have the hottest car(s) on the market they will take max advantage. It's business, can be perceived as being pricks. If one can't put down $500 to test drive, then they probably can't afford it, and separates the browsers from the buyers.
I can pay cash for a 911 Turbo S if I wanted to. That's not the point; I'm not interested in the time wasting or aggravation that writing a check for $500 and then getting that check back represents.

If a dealership doesn't want to let me test drive a car without playing games, the next dealer will, or the one after that. Life's too short for bullshit time-wasting games.

I... can be a bit aggressive when pissed off.

My next ACTUAL move was to ask for 5 minutes to check something, and take out my cell phone and call the other Honda dealership in the city, explain the situation, and ask if they were interested in doing business with us. In front of the sales dude. And then book an appointment in front of him.

After which I hung up and was basically like "I guess that solves that, we won't be needing your help with this. Paying for a test drive is nonsense. Good luck with that sales tactic."

For the record: we bought a Honda Fit, at a reasonable price, at the second dealership, and have been driving it ever since. Love that car. But MAN I've warned everyone I can away from Dealership #1.
LOL, go you.  I don't think that was aggressive.  I think that was assertive.

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Re: Ridiculous Things Dealerships Say and Do
« Reply #175 on: January 11, 2017, 09:17:30 AM »
Damn, this thread is pretty useful for recovering old memories :-)   When the wife and I were very young, and foolish, were were at a Honda dealer, trying to trade our two year old, base model Subaru in for a new Accord.  This was in the mid- 80's when Hondas were so hot that you waited for one to arrive at the dealer, and if you were an aggressive negotiator, you paid MSRP, not $1000 more.  We had a $3K balance on our Subby,  which wasn't too odd, since it was only $4995 to begin with. We just wanted to get out of the loan, with a $3000 trade in value and find an Accord for list.  The saleslizard agreed to everything, which was odd, and offered to write it up.  As we started to sign the paperwork, I found that they were trying to hide a personal loan to us, a "second mortgage" of sorts, in the pile of paperwork.  When I asked what the additional $181 a month was for, they casually stated that it was to "to cover the gap between the trade value of our car and what they can realistically afford to give us fo it". I then read the document, and discovered that they were attempting to trick us into signing a ridiculously high interest rate note for the entire payoff balance on the trade. When I questioned it, and asked then if they were actually attempting to steal our trade in, they danced around and babbled a bit, but both the saleslizard and his manager knew that they were busted. We walked out, totally stunned that these two were actually attempting to commit a crime.

TheStachery

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Re: Ridiculous Things Dealerships Say and Do
« Reply #176 on: January 11, 2017, 10:08:02 AM »
https://www.youtube.com/watch?v=wyJDAPjbzRY

can't believe i just watched that whole thing...  I wonder what happened to the Slasher.  My guess is he's in jail... again.  Obviously the guy was on coke or something...

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Re: Ridiculous Things Dealerships Say and Do
« Reply #177 on: January 13, 2017, 02:06:48 PM »
https://youtu.be/9f2ogIIyD2U

For some odd reason I clicked on this training video and I'm amazed at how people can be controlled so easily by others.

Now I'm watching his other videos just for the fun factor ;)
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gimp

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Re: Ridiculous Things Dealerships Say and Do
« Reply #178 on: January 17, 2017, 06:55:06 PM »
We want to buy our first car. We research price, call to make sure they have what we want, make an appointment (!!!), show up, look around, confirm price/interest, and I say I'm willing to sign papers after a test drive.

Sales dude: "oh, you have to put down 500$ towards the cost of the car in order to be able to test drive that model." (A Honda Fit, not, like, a BMW or whatever)

Hahaha. Hahahahaha. Ha. HA.

yeah, what's about fuck no?

When the dealers know they have the hottest car(s) on the market they will take max advantage. It's business, can be perceived as being pricks. If one can't put down $500 to test drive, then they probably can't afford it, and separates the browsers from the buyers.
When the 1st Gen Honda Fit first was released in the US in mid-2006, dealers were asking $3000 over MSRP. My nearest Honda dealer is near a lareg state university campus and they had tons of Fits being bought. My wife liked it, but for a much lower price, we got a brand new redesigned 8th Gen Civic. She's still driving it.

I assume they didn't go when the fit just launched, considering they bought one easily elsewhere.

A honda fit isn't worth mentioning the words "hot market" about ... it's an econobox. (And anyone paying over msrp for an econobox is stupid.)

I can walk into an exotics dealer tomorrow and drive a $150k car, they'll just want a copy of my license. A deposit to drive a honda fucking fit? The only thing honda makes that's hot enough to ask a deposit for is an NSX, except I bet most of those get sold without test drives (buyers really don't seem to like non-delivery miles on their supercars.)

SwordGuy

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Re: Ridiculous Things Dealerships Say and Do
« Reply #179 on: January 17, 2017, 07:03:01 PM »
A local Kia dealer is advertising to the "I spent too much on Christmas crowd."

Apparently the avg amount of time it takes people to pay off their Christmas presents is 8 months on the charge card (according to the commercial).  Yikes!

So, you can roll up to $10,000 of credit card bills into your car loan if you buy a new vehicle.

No mention of rate or price on the vehicle, but I bet it's full price (or more) and a bad rate for a car loan.

gimp

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Re: Ridiculous Things Dealerships Say and Do
« Reply #180 on: January 17, 2017, 07:07:18 PM »
When is the car note market going to burst?

Dealers are pulling out all the stops to roll every kind of debt into a car note. I'd guess a lot of it is not any more collateralized than credit card debt, but sold as if it's all backed by the car. ("Hey, if it's upside-down from day one, may as well add another ten grand into it, nobody will notice!")

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Re: Ridiculous Things Dealerships Say and Do
« Reply #181 on: January 18, 2017, 01:44:10 AM »
When is the car note market going to burst?

Dealers are pulling out all the stops to roll every kind of debt into a car note. I'd guess a lot of it is not any more collateralized than credit card debt, but sold as if it's all backed by the car. ("Hey, if it's upside-down from day one, may as well add another ten grand into it, nobody will notice!")

+1. It's smelling like the pre-crash mortgage market.

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Re: Ridiculous Things Dealerships Say and Do
« Reply #182 on: January 18, 2017, 06:02:36 AM »
When is the car note market going to burst?

Dealers are pulling out all the stops to roll every kind of debt into a car note. I'd guess a lot of it is not any more collateralized than credit card debt, but sold as if it's all backed by the car. ("Hey, if it's upside-down from day one, may as well add another ten grand into it, nobody will notice!")

Yeah, I've been wondering about that too. What next, 120-month loans? They can't continue rolling debt forever...even the banks will start to balk if there's no chance of recovering their money.

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Re: Ridiculous Things Dealerships Say and Do
« Reply #183 on: January 18, 2017, 06:52:18 AM »
When is the car note market going to burst?

Dealers are pulling out all the stops to roll every kind of debt into a car note. I'd guess a lot of it is not any more collateralized than credit card debt, but sold as if it's all backed by the car. ("Hey, if it's upside-down from day one, may as well add another ten grand into it, nobody will notice!")

Yeah, I've been wondering about that too. What next, 120-month loans? They can't continue rolling debt forever...even the banks will start to balk if there's no chance of recovering their money.

According to Forbes, it's likely to continue as long as there are buyers for the bonds the banks create when they package the debt. They also claim that there is little parallel to the housing collapse, since the potential failure of this market can't have the same impact, due to investors, not the banks, holding the notes.

http://www.forbes.com/sites/timworstall/2016/08/18/john-oliver-gets-the-risks-of-sub-prime-auto-loans-completely-wrong/2/#5443bdd74cfe

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Re: Ridiculous Things Dealerships Say and Do
« Reply #184 on: January 18, 2017, 06:54:26 AM »
A lot of their corporate success seems tied to their financing departments.  If I remember correctly, the financial sides of the auto industry was dragging them down more than the actual manufacturers and the bailouts didn't really change this part of the industry.

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Re: Ridiculous Things Dealerships Say and Do
« Reply #185 on: January 18, 2017, 07:38:36 AM »
When is the car note market going to burst?

Dealers are pulling out all the stops to roll every kind of debt into a car note. I'd guess a lot of it is not any more collateralized than credit card debt, but sold as if it's all backed by the car. ("Hey, if it's upside-down from day one, may as well add another ten grand into it, nobody will notice!")

Yeah, I've been wondering about that too. What next, 120-month loans? They can't continue rolling debt forever...even the banks will start to balk if there's no chance of recovering their money.

According to Forbes, it's likely to continue as long as there are buyers for the bonds the banks create when they package the debt. They also claim that there is little parallel to the housing collapse, since the potential failure of this market can't have the same impact, due to investors, not the banks, holding the notes.

http://www.forbes.com/sites/timworstall/2016/08/18/john-oliver-gets-the-risks-of-sub-prime-auto-loans-completely-wrong/2/#5443bdd74cfe

It may not lead to a recession but I do expect yet another bank bailout.
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Re: Ridiculous Things Dealerships Say and Do
« Reply #186 on: January 18, 2017, 08:24:12 AM »

Can you elaborate on the "4 corners" and why this is important?


It stated that the sales contract was complete and that no verbal representations made are enforceable. Thus, only the terms written in the four corners of the contract are valid.  Thus the salesman could tell me that the car could get 75 mpg but if I didn't have it in writing, I'd have no recourse for damages. 

My business law class was a long time ago so I googled the phrase and see this comment on FindLaw.com   NOTE: The number of states that accept the four corners rule is in decline.   So I guess its archaic knowledge now.

No, the four corners rule is still normal law in every US jurisdiction I'm aware of. It has nothing to do with this four-square sales technique, since the four-square document is not a contract. (It's an agreement to agree: "if we come up with numbers that are satisfactory to both parties, then we will enter into a sales contract for this vehicle"--and agreements to agree are meaningless, with no legally binding power.)

The four corners rule means that what is written in the contract is all that you agreed to; you can't come back later and say, for instance, "Wait, he told me if I wasn't satisfied I could bring the car back for a full refund in 7 days," because if that's not written down within the "four corners" of the piece of paper the contract is printed on, then it's not something you guys actually agreed to.

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Re: Ridiculous Things Dealerships Say and Do
« Reply #187 on: January 18, 2017, 08:28:28 AM »
I recently bought a new Hyundai.  I like the car.
Sales person was easy to deal with.  No hype, no drama.  She did ask what I wanted for payments.  I said "Zero."  She smiled.  I'm not a payments person.

She did start with the four square.  I pushed the paper aside.  I only negotiate OTD (out the door) pricing.  How they write up the sales contract (which figure they put where) I don't care.  I'm a bottom line person. 

Passed on to the "paperwork" guy.  Kept trying to sell me warranties.  Nope.  Nope.  Nope.  Nope.  He said "XXX usually breaks on these cars so you want a longer warranty".  I replied "If you know that in advance, perhaps I shouldn't buy this car."  Got the deer in the headlight look.

All in all an easy process.  Anytime I thought they were stalling I went for a smoke.  It made them think I was leaving so they stopped stalling.

Also, zero interest from Hyundai (my credit union couldn't even match that).

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Re: Ridiculous Things Dealerships Say and Do
« Reply #188 on: January 18, 2017, 09:39:05 AM »
I recently bought a new Hyundai.  I like the car.
Sales person was easy to deal with.  No hype, no drama.  She did ask what I wanted for payments.  I said "Zero."  She smiled.  I'm not a payments person.

She did start with the four square.  I pushed the paper aside.  I only negotiate OTD (out the door) pricing.  How they write up the sales contract (which figure they put where) I don't care.  I'm a bottom line person. 

Passed on to the "paperwork" guy.  Kept trying to sell me warranties.  Nope.  Nope.  Nope.  Nope.  He said "XXX usually breaks on these cars so you want a longer warranty".  I replied "If you know that in advance, perhaps I shouldn't buy this car."  Got the deer in the headlight look.

All in all an easy process.  Anytime I thought they were stalling I went for a smoke.  It made them think I was leaving so they stopped stalling.

Also, zero interest from Hyundai (my credit union couldn't even match that).
Way to go.  If I ever end up buying a new car at a dealership I'll have to remember to bring a pack of cigarettes (and my own innate stubbornness).

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Re: Ridiculous Things Dealerships Say and Do
« Reply #189 on: January 18, 2017, 10:51:39 AM »
I recently bought a new Hyundai.  I like the car.
Sales person was easy to deal with.  No hype, no drama.  She did ask what I wanted for payments.  I said "Zero."  She smiled.  I'm not a payments person.

She did start with the four square.  I pushed the paper aside.  I only negotiate OTD (out the door) pricing.  How they write up the sales contract (which figure they put where) I don't care.  I'm a bottom line person. 

Passed on to the "paperwork" guy.  Kept trying to sell me warranties.  Nope.  Nope.  Nope.  Nope.  He said "XXX usually breaks on these cars so you want a longer warranty".  I replied "If you know that in advance, perhaps I shouldn't buy this car."  Got the deer in the headlight look.

All in all an easy process.  Anytime I thought they were stalling I went for a smoke.  It made them think I was leaving so they stopped stalling.

Also, zero interest from Hyundai (my credit union couldn't even match that).
Way to go.  If I ever end up buying a new car at a dealership I'll have to remember to bring a pack of cigarettes (and my own innate stubbornness).
If you don't smoke but need to play the part, you could use these:
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Re: Ridiculous Things Dealerships Say and Do
« Reply #190 on: January 18, 2017, 11:02:23 AM »
A few years back I went to a dealer to buy a car with the Mrs and handed them a USAA loan certificate/check for the final price. Dealer took it back to his financial manager and he eventually came back and said they had never see this and they couldn't take it BUT if I told him the loan info from USAA they would match it. I called them out on it since it is very common to use this, asked for them to toss the plates back on the car and I would take it down the road to the Ford dealer down the road since they don't have any problems using them. Magically the financial manager "figured out" a way to make it work. Told them to pound sand and left.

 

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Re: Ridiculous Things Dealerships Say and Do
« Reply #191 on: January 18, 2017, 11:40:18 AM »
When is the car note market going to burst?

Dealers are pulling out all the stops to roll every kind of debt into a car note. I'd guess a lot of it is not any more collateralized than credit card debt, but sold as if it's all backed by the car. ("Hey, if it's upside-down from day one, may as well add another ten grand into it, nobody will notice!")

Yeah, I've been wondering about that too. What next, 120-month loans? They can't continue rolling debt forever...even the banks will start to balk if there's no chance of recovering their money.

120 month car loans used to be available for corvettes, etc.  Don't know if they still are.

Drifterrider

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Re: Ridiculous Things Dealerships Say and Do
« Reply #192 on: January 18, 2017, 11:44:56 AM »
I recently bought a new Hyundai.  I like the car.
Sales person was easy to deal with.  No hype, no drama.  She did ask what I wanted for payments.  I said "Zero."  She smiled.  I'm not a payments person.

She did start with the four square.  I pushed the paper aside.  I only negotiate OTD (out the door) pricing.  How they write up the sales contract (which figure they put where) I don't care.  I'm a bottom line person. 

Passed on to the "paperwork" guy.  Kept trying to sell me warranties.  Nope.  Nope.  Nope.  Nope.  He said "XXX usually breaks on these cars so you want a longer warranty".  I replied "If you know that in advance, perhaps I shouldn't buy this car."  Got the deer in the headlight look.

All in all an easy process.  Anytime I thought they were stalling I went for a smoke.  It made them think I was leaving so they stopped stalling.

Also, zero interest from Hyundai (my credit union couldn't even match that).

This story is a thing of beauty.  Love this.

I'm thrifty.  My very first lesson on finance was at about age six.

I knew what I was willing to pay and wanted what I wanted.  This is the first new car I've bought that was exactly what I wanted.  I wasn't willing to bend on anything but I was willing to walk away (I haven't had a car payment since 2006) and didn't want one now but, zero interest financing and by using auto-draft, I don't even have to write a check or buy a stamp.

AND, I really do like the car.  It is NICE.  and........ I can get 40mpg on the interstate.

Edited to add:  The absolute cherry on top; a few weeks after I bought the car, I got a check from the dealership for $205.00.  It seems they put the wrong figures in the contract for TTL and the state refunded some money, to ME!!!!
« Last Edit: January 18, 2017, 04:48:27 PM by Drifterrider »

Paul der Krake

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Re: Ridiculous Things Dealerships Say and Do
« Reply #193 on: January 18, 2017, 02:34:34 PM »
Regarding auto loan length: we're not even close to reaching maximum length. Look to the RV and bot industry for some inspiration, where 20 year loans can reach 20 years.

Granted, these are different products with longer lifespan, but I would bet 120 month loans are around the corner.

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Re: Ridiculous Things Dealerships Say and Do
« Reply #194 on: January 18, 2017, 03:01:59 PM »
We already have 8-year loans (96 months) ...

"where 20 year loans can reach 20 years. " I know what you meant, but that was a funny way of putting it.

I agree that this probably won't lead to a recession, because some lessons were learned in 2008 - namely, I doubt that people are happily writing credit default swaps on these notes with total exposures in the ten-billion range at each of a couple dozen large banks. As long as it's backed by investors, or at least investment banks without a huge amount of leverage, I don't care. And I don't see a bank bailout happening either.

Still want to know how to profit off it.

Also, what do you guys think for timelines? I don't think we'll start seeing heavy default rates until the next (possibly minor) downturn. As soon as unemployment ticks up a couple tenths of a percent, I think we'll start to see a snowball effect. Actually, do any of you guys know where to get localized data for... for example, for Texas circa ~2015 oil price crash? I saw a lot of corvettes, camaros, and trucks for very good prices in Houston/Dallas/etc at that time.

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Re: Ridiculous Things Dealerships Say and Do
« Reply #195 on: January 18, 2017, 03:17:20 PM »
Guys! 120 month loans for cars already exist! The sales associate at the dealership told me he had sold a few himself!


2. Their default loan length when you ask about rates is now 72 months and they are willing to go up to at least 120 months (See item 1)

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Re: Ridiculous Things Dealerships Say and Do
« Reply #196 on: January 18, 2017, 03:27:22 PM »
Regarding auto loan length: we're not even close to reaching maximum length. Look to the RV and bot industry for some inspiration, where 20 year loans can reach 20 years.

Granted, these are different products with longer lifespan, but I would bet 120 month loans are around the corner.

I believe many of these are effectively mortgages.  In other words, if it has a toilet, a kitchen and a bed, I think it qualifies as a second home for tax write off purposes.  (Or, to put it another way: I have had friends that did this... whether it is on the level or not, I don't really know.)
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Re: Ridiculous Things Dealerships Say and Do
« Reply #197 on: January 18, 2017, 03:28:04 PM »
Keep in mind, unlike houses, cars are very repossess-able and liquid.  Not hard for a bank to hire a tow truck driver to grab a car and then go auction it off.  Easy to recoup say, 75% of the losses the bank might have on the car. 
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gimp

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Re: Ridiculous Things Dealerships Say and Do
« Reply #198 on: January 18, 2017, 06:20:11 PM »
Keep in mind, unlike houses, cars are very repossess-able and liquid.  Not hard for a bank to hire a tow truck driver to grab a car and then go auction it off.  Easy to recoup say, 75% of the losses the bank might have on the car.

Which is exactly the point I brought up - cars are repossessable, all the other debt rolled into the car loan is not. In addition to the underwater portion of the car loan (a given, from day one, and for a couple years after), there are previous car loans that are now rolled in and backed by nothing (often a string of them), and now even other things like refinanced debt, toys to go with the car (4-wheelers, bikes, trailers, etc)...

If these car notes are still being treated as 75% recoverable with just a tow truck, things will get bad if those assumptions prove to be false.

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Re: Ridiculous Things Dealerships Say and Do
« Reply #199 on: January 18, 2017, 06:31:55 PM »
It's. it a given a car will be underwater on day one (downpayment??) and I think rolling in other debt is less common than you think; at least not common enough to pose a real threat to the market.
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