Capital One will only let me purchase a vehicle at WHOLESALE value?

[Stilltheone]

My husband and I decided to get rid of my Cadillac Escalade. Our original thought was to trade it in for 2 vehicles....a used minivan for me and a GTO for him....hoping our payment would increase by $150.

We went to the dealership tonight and Capital One approved us for his GTO at 16% interest. When we told the financial manager that we wanted to trade in the Escalade, he said that Capital One approved us only for wholesale value of the car....so we can't roll the negative equity of the Escalade into the new cars.

Has anyone ever heard of this with bankruptcy? Why on *Earth* would a financial company say "Yes, we will lend you money for a car, but we will only lend you as much as the car is worth as wholesale value".

I'm just wondering how much of this is the truth....

[Keebler]

My husband and I decided to get rid of my Cadillac Escalade. Our original thought was to trade it in for 2 vehicles....a used minivan for me and a GTO for him....hoping our payment would increase by $150.

We went to the dealership tonight and Capital One approved us for his GTO at 16% interest. When we told the financial manager that we wanted to trade in the Escalade, he said that Capital One approved us only for wholesale value of the car....so we can't roll the negative equity of the Escalade into the new cars.

Has anyone ever heard of this with bankruptcy? Why on *Earth* would a financial company say "Yes, we will lend you money for a car, but we will only lend you as much as the car is worth as wholesale value".

I'm just wondering how much of this is the truth....

Considering that the car is collateral on the loan, why in the world would the bank loan you even one dollar more than it's worth? I'm not saying that it isn't done all the time, but it's the act of loaning more than a car is worth that's illogical. If they can tell your financial situation is fragile, then they're bound to be much more guarded than they otherwise might be. Even if your situation isn't the problem, the economy is reason enough for them to be more guarded today than they had been in the past.

[Stilltheone]

I can understand not willing to loan money for more than a vehicle is worth, but for WHOLESALE value!??! I couldn't even walk in and pay RETAIL value for a car, according to Capital One.

If the car is worth $20K retail and $15 wholesale, they weren't willing to lend me more than $15K....How many people can walk into a dealership and say they want to pay wholesale value for a car?

[bal_ny]

I imagine that they expect you to come up with the difference as a down payment, not that the dealer will sell the car at cost. They're not willing to invest any more than the car is worth wholesale because they want to recoup the entire amount if you default on the loan. When I was shopping for a car pre-BK, no one would finance me over blue book value. It's not uncommon.

[Stilltheone]

I imagine that they expect you to come up with the difference as a down payment, not that the dealer will sell the car at cost. They're not willing to invest any more than the car is worth wholesale because they want to recoup the entire amount if you default on the loan. When I was shopping for a car pre-BK, no one would finance me over blue book value. It's not uncommon.

That's what I thought too but our downpayment requirement is $500 down. That's it.

We've decided to just keep our old one and maybe trade it in for a newer one 6 months from now. Gives us time to rebuild our credit.

Thanks!

[Cali]

Who said your DP requirement was 500$?

[debtmonster]

If the car is worth $20K retail and $15 wholesale, they weren't willing to lend me more than $15K....How many people can walk into a dealership and say they want to pay wholesale value for a car?

You don't go to a dealership. That's when you start hitting Autotrader.com and start looking for cars for sale by private owners. Then you look at trade-in values on cars you like and get numbers that are close. Then you call and see if the car is still for sale and ask if they can take a lesser amount that way you can meet the wholesale amount.

Say a car is worth $14k wholesale and a private seller is asking $15,500. Make an offer of $14k and get the deal pre-approved and have a check in hand to buy the car. This is far better than getting ripped off at a dealer and paying above and beyond what the car is worth.

Or even better, go to an auction and buy the car below wholesale. A friend of mine goes to auctions. He saw a beautiful 2006 convertible BMW go for $14,000 with NO BIDDERS! This same car would easily go for $30k+ on a dealer's lot.

There are deals out there. When you are pre-approved, you have the upper hand.

[Ugh07]

Capital One does not allow you to buy from individuals or Auctions, franchised dealers only.

[debtmonster]

Capital One does not allow you to buy from individuals or Auctions, franchised dealers only.

By doing that, you're adding thousands to the cost. Why would they do this? That puts you thousands deeper in the hole than you need to be?

If I had my heart set on a vehicle that was $12,000 wholesale and a dealer had the same exact car for $19,000, why would I want to pay $7,000 more when I'd rather buy it from an individual and save the retail markup?

Plus you pay all of that interest on the $7,000 on top of that. This does nothing more than burn the consumer and put you into a worse situation. The gov't needs to mandate this and allow the consumer to buy whatever car they see fit.

[mnepitjr]

The Capital One loan I got did not say that. Only that you had a ratio of percentage over loan that you could go. The dealer is pulling your leg. You just go there and write the check to them. That's it. Now the problem you will have is finding a franchised dealer that will accept it. There were none here that would take it, Ford, Lincoln, Chevy, Ponitac or Jaguar here wouldn't accept because of the long delay for them to get their money. That's what the dealers told me.

[debtmonster]

The Capital One loan I got did not say that. Only that you had a ratio of percentage over loan that you could go. The dealer is pulling your leg. You just go there and write the check to them. That's it. Now the problem you will have is finding a franchised dealer that will accept it. There were none here that would take it, Ford, Lincoln, Chevy, Ponitac or Jaguar here wouldn't accept because of the long delay for them to get their money. That's what the dealers told me.

I just got off the phone with Capital One 5 minutes ago to check on my payoffs to add to my bankruptcy list. So far $7500. WOW!! I had no idea I had racked up this much debt. And the list is still growing.

I have 34 creditors on the list so far.

[Ugh07]

By doing that, you're adding thousands to the cost. Why would they do this? That puts you thousands deeper in the hole than you need to be?

i suspect the reason they do it is to keep people from getting cash back or some other unscrupulous type of thing.

[debtmonster]

i suspect the reason they do it is to keep people from getting cash back or some other unscrupulous type of thing.

Whatever the case is... the idea of me getting that nice Acura for $12,900 just ended real fast. I wish I cold hold on to my car for a year or so with no payments to allow me to save all the money to buy this car for cash. It's paying OTHER BILLS that keep me from reaching my original goal.

It's like wanting to buy a home while you're renting. If you weren't pissing away all of that money on rent, you could be applying it towards a town payment.

[mnepitjr]

I used the Roadloans thing. Even though it took several weeks, I bought from an individual and the taxes on the car were included on the loan. I bought a 2003 BMW 5 Series with 50k miles all buttons and whistles. My BK rolled off in June.

[debtmonster]

I used the Roadloans thing. Even though it took several weeks, I bought from an individual and the taxes on the car were included on the loan. I bought a 2003 BMW 5 Series with 50k miles all buttons and whistles. My BK rolled off in June.

As long as you live in town and can walk, ride a bike or take a bus to the grocery store, that's fine. But there's no way we could go several weeks out here without a vehicle. We need something immediately after the trustee takes our cars away.

I bet that BMW is sweet! 50k miles is NOTHING!! Mine has 25,000 and still runs absolutely no different than the day I bought it.

The trade-in on a 2003 525i with 50k miles is only $12,930. That car took a H-U-G-E hit in depreciation. Most dealers would probably give black book of $10-12k as a trade for that beautiful car. I'm sure the sticker on your car had to be between $40-50k when new.

I remember reading an article on MSN a while back. They said you're better off buying a 5 year old BMW than buying a brand new Honda. They said in 5 years the BMW would be worth more than the Honda since the BMW took the brunt of the depreciation already.

My friend's mom had an 1989 5-series and drove that thing until this year. It was an amazing car for such an old machine. The handling and braking was incredible. That's one of the reasons I bought my BMW is because I saw how long hers lasted. But for $740/mo, it's going to be included in my Ch. 7.

Why did it take several weeks with the Roadloans things? Did you put any money down?