Is the dealership trying to rip me off?

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  1. MissMelissaK profile image81
    MissMelissaKposted 4 years ago

    Is the dealership trying to rip me off?

    I would like to buy a 2013 Chevrolet Spark.  The sticker price is $14,300.  He told me that it's only a couple of hundred above invoice.  According to truecar.com that is not true.  Also, they offered me two scenarios with bad credit.  One was a $3,000 deposit with $350 x 72 payments.  The other was a $4,000 deposit with $325 x 72 payments. My trade in is a Ford Escape 2007 in good condition.  I owe $7,225 on it.  I have negative equity in the vehicle.  I owe more than it's worth by $1,000 and then they have to resell it so its more like $3,000.  I have 92k miles on it.

  2. cfin profile image80
    cfinposted 4 years ago

    Yes, their job is to make money. Go to your local credit union and see what they can offer you in the line of a loan. I recently had a run in with a dealership when they pulled my credit without permission.

    Get the CU loan and only deal with the CU. All the dealership will do, is call the CU and get  the same loan with a higher rate. FACT. Also, try to sell your car privately first. You will easily get 2500 more for it. And don't be put off by low ball offers. Those are usually dealerships emailing you to see if they can get cars on the cheap. If they don;t get your car on the cheap, you will end up trading it in our of worry. They win either way.

    1. cfin profile image80
      cfinposted 4 years agoin reply to this

      Also, avoid their "extra warranties" like the plague.

    2. David R Bradley profile image83
      David R Bradleyposted 4 years agoin reply to this

      cfin, you're way off here brother.  Just because you had a bad experience doesn't mean every dealership is out to ge you.  Yes, dealerships need to make money, that's how they feed their families.  Let's find out how to help Melissa not confuse her.

    3. cfin profile image80
      cfinposted 4 years agoin reply to this

      @ David, Obviously you are, or know a car dealer. I have been burned 3 times by dealerships. Checking my credit without permission, and lying about numerous things. My opinion is based on facts. Not all, but most car dealers I know are corrupt.

    4. David R Bradley profile image83
      David R Bradleyposted 4 years agoin reply to this

      I sold cars for 10 years ethically and honestly and made a good living doing it.  I know how a dealer works.  I replied to your hub once about dealers hoping to have a honest debate, this isn't the place, you should publish my comment...

    5. cfin profile image80
      cfinposted 4 years agoin reply to this

      I am unbiased. I just state facts. You are biased. My father dealt in cars for 20 years and left the business because he couldn't stand the dishonesty of it. Simple as.

    6. David R Bradley profile image83
      David R Bradleyposted 4 years agoin reply to this

      We're both biased - be honest - dealers who operate like it's the 80's are finished - the market will not allow for it, let's take this discussion to your Hub...

    7. cfin profile image80
      cfinposted 4 years agoin reply to this

      I just did, and no, I am not biased. I am a consumer rights advocate.

    8. MissMelissaK profile image81
      MissMelissaKposted 4 years agoin reply to this

      Thank you for your advice.

    9. jaydawg808 profile image90
      jaydawg808posted 4 years agoin reply to this

      I think cfin has valid arguments. But you must understand that the dealer has to make money off of a car. Why would they not want a profit? They don't know you, and they're in the business to make money. That said there is no "deal"

    10. cfin profile image80
      cfinposted 4 years agoin reply to this

      @ jawdawg. I understand a profit is needed, but in this case, and in many cases, the dealership pushes too hard and takes the arm and the whole hand, leaving the customer feeling robbed.

      Its sad but happens all to often.

  3. David R Bradley profile image83
    David R Bradleyposted 4 years ago

    MissMalissaK, True Car will show you total dealer cost, which is not the invoice.  The invoice is what the dealer pays to buy the car from the factory and the invoice price doesn't reflect any factory to dealer incentives, advertising and hold back.  Cross reference what the dealer shows as their invoice with Edmunds and Cars.com.  TrueCar factors in all possible rebates and incentives to get a bottom line number that may or may not be fully accurate based on region and what incentives and rebates the dealer qualifies for from the factory.  New car margins are shrinking dramatically, especially in the economy car class.  The actuall pricing your talking about looks accurate to me.

    The structure of the car deal itself looks right as well.  Not sure what the rate is, but the payments will reflect negative equity, principle balance and interest which will be high for challenged credit.  Find out what the rate is, the final selling price of the car, total negative equity, taxes and fees and plug it into to a payment calculator and see if it's close.

    Suggestion moving forward:  Make sure it's a simple interest loan with no prepayment penalty.  Then DO NOT miss a payment for 18 months and then refinance the loan at a lower rate with someone like Capital One or a your local credit union.

    Hope that helps!

    1. cfin profile image80
      cfinposted 4 years agoin reply to this

      And no, I am not way off. I also have to feed my family and half the inquiries on my credit were illegal and put their by shady dealership. I have also helped dozens of people who have been burned by them. I have facts, you have opinions.

    2. David R Bradley profile image83
      David R Bradleyposted 4 years agoin reply to this

      I too have helped people buy and sell cars - that's how I made my living for 10 years - the situation Melissa's in doesn't look like the situation you were in - you should have published my comment on your hub where we could have discussed it futher

    3. MissMelissaK profile image81
      MissMelissaKposted 4 years agoin reply to this

      Thank you for giving me your input.  But even when I try for a car that's worth $17,000 I still get double the cost of the car in the transaction.  I thought $14,300 would work out. I've decided to hold off for six months and try again in April 2014.

  4. junkseller profile image82
    junksellerposted 4 years ago

    I am a little confused with the trade-in part but it sounds like you are saying that you are going to take a $3,000 dollar loss on it which would basically mean your deposit and that loss cancel each other out and you will be taking a loan of $14,300. At a payment of $350 over 6 years that is a 20.8% interest rate which is pretty darn high.

    I agree with the other suggestion about selling your own car and trying to secure your own financing. With a $3,000 down payment, you'd have a loan of $11,300, at an 8% interest rate, your payment would be down at $200 over 6 years and the total amount paid would be $17,400. That same loan ($11,300) at the 20% rate they seem to want to charge you is $275 over 6 years for a total amount paid of $22,800.

    You may have to take a higher interest rate if your credit is bad, but even so, 20% is too high. Definitely shop around and maybe consider a co-signer.

    1. cfin profile image80
      cfinposted 4 years agoin reply to this

      Agreed

    2. MissMelissaK profile image81
      MissMelissaKposted 4 years agoin reply to this

      That's correct.  My brother said whatever sticker price you see, add $3,000 to that for the hit the dealership will take because you owe more on your car than it's worth by $1,000 plus they have to make something in order to sell it.

  5. MissMelissaK profile image81
    MissMelissaKposted 4 years ago

    Thank you for all your advice.  I greatly appreciate it.  I hate numbers and I fear getting ripped off.  I will spend the next six months paying down as much debt as possible and then try again in April 2014.  It is wise to wait and I'll definitely try a credit union.  Never went that route before.  I'll google to see if there is one where I live.  I have heard even the sharpest shoppers can get ripped off at car dealerships these days.

    1. cfin profile image80
      cfinposted 4 years agoin reply to this

      Yup.

    2. MissMelissaK profile image81
      MissMelissaKposted 4 years agoin reply to this

      The thing that bothered me was that even if I tried for the cheapest car, I still get SCREWED!!!  That's roughly $28,000 (including deposit) charged over 6 years for a $14,300 vehicle with the trade-in.  They say it's 16%.  I question that???

  6. lburmaster profile image81
    lburmasterposted 4 years ago

    Why are you trying to buy a car when you still owe on "your" car? Also, IT'S A DEALERSHIP! Of course they are trying to rip you off! Don't go to CarMax either. Gather some friends who work with cars on a daily basis. Mechanics will help give you better advice than anyone else on car purchases. Don't ask the salesmen or anyone at a desk.
    Having a previous mechanic as a husband has it's perks smile

    1. MissMelissaK profile image81
      MissMelissaKposted 4 years agoin reply to this

      Ah thanks.  The reason why is because my new job requires me to travel 50 miles a day.  I thought that a nice econo car would cut my gas bill in half because the Escape gets 20 mpg and the Spark can get up to 47 mpg.

    2. cfin profile image80
      cfinposted 4 years agoin reply to this

      Try a Kia Spectra. 9,000 for a 09' good reliable car that does 31 per gallon. It would also be a sensible, suitable vehicle. Have had one for awhile now and not one issue. I wouldn't touch a spark. Find me a non rusty chevrolet sedan.

    3. MissMelissaK profile image81
      MissMelissaKposted 4 years agoin reply to this

      Thanks for the tip. smile

    4. cfin profile image80
      cfinposted 4 years agoin reply to this
 
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