First Car Purchase After BK

[copper2]

Hi folks, it has been a year now since I filed, and I found a pre-owned Toyota with much more room and all-wheel drive for thes now here. The financing was done through Fireside Bank, which is VERY APR-driven and specializes in borrowers with my situation. The interest was 21%. Three weeks later, I'm now playing phone tag with a Fireside rep. I am anticipating an adjustment to the already high interest, after what happened to a co-worker (took the car home and then was notified at home the interest rate on the deal was not approved). I want to be prepared for this sort of scenario. From the fine print on my contract about "original terms," it implies the contract is void if changes are made to the original deal. Has anyone ever driven the vehicle back to the lot and handed back the keys in a situation like this? If so, what happened?

[BassBoy]

This is called a Spot Delivery, which is not totally legal. No one should ever drive a car off the lot without having ALL of the paperwork completed. DO NOT drive a car home that does not have the financing completed. Dealers can sucker you into this deal because you have the opportunity to drive a new/newer car, fall in love with it and you'll want to keep it and you're willing to pay a higher interest rate, higher payment and longer term because you love your new ride.

Spot Delivery also allows the dealership to backdate the new loan to the original date you drove it home, thus having an additional XX number of days with back interest.....also illegal.

Be cautious of the Spot Delivery scam.

P.S., I posted some info about dealership scams, but give me some time to search for it and I'll post a link here for you. You can also go to edmunds.com and learn all of the tricks and scams dealerships can pull on would be buyers, especially those with credit isssues. Their website is very informative and you'll learn a lot.

[tess_bk]

Wow, BassBoy, that's illegal? I had no idea. A dealer that was trying to sell me a used Toyota a couple of weeks ago was trying to get me to drive it home ... and I live 1-1/2 hours away from them! I wasn't tempted in the least, it was obvious they were trying to rope me in, and I knew for a fact that getting the credit they were promising me was highly unlikely. (They were telling me they could get me 9.9% with no downpayment.) Three days later I finally heard from the finance manager, and he offered me 17.7% and $1000 down for the car! I just laughed and said no thanks, but boy oh boy was I glad I hadn't driven it home when that was "offered" to me!

tess

[razorguns]

HIGH interest rate is how the industry gets back some of the money it loses from bk.

Remember that $1500 you spent on bk? Well it just cost you $15k over 4 years. Ta da!

And the salespeople are trained to feed u that 'it's the best way to rebuild your credit, so sign on this bottom line for 25 PER CENT interest!!!'. Auto dealerships LOVE bk people. Sitting ducks.

Say no to that. Spend $750 on trinity credit to polish your cr. Save and spend $10g's on a half decent toyota with 40k on craigslist.org (cheaper if u go domestic) -- and your wallet will THANK YOU for it.

Bk and low interest auto loans dont go together. Wanna build credit? Buy a house, get a higher paying job, use trinity credit, dispute all items, wait a few years, get a bf/husband to buy a car 4 u, get more cc's in 2 years, etc. etc.

i have bk, and honestly - i have no need for credit at all. Not buying a house, car and i use a debit card eveyrwhere. I'm set for the next few years easily.

r

[HHM]

Whether its legal or not depends on a few factors, and what state you live in. I wouldn't go as far as say its illegal. The dealership works with all kinds of financing companies who give them various criteria for lending. If a customer meets that criteria the dealership will do the deal with the customer, However, the financing company has the last word and can say no...so they shop the contract around...some finance companies will say yes, but at a higher interest rate.

However, you should have never have signed off on a 21% auto loan, that is financial suicide and reflects the kind of poor decision making that gets many people into BK in the first place.

If the amount financed was $15,000, on a 4 year term, you will pay $7,295.30 in just interest, on top of the $15,000 principal. So if the care was purchased for $17,000, out the door, and you put $2K down, you will end up paying $22,295 for a $17,000 car. I hope you like it, because you won't be able to sell it for what you owe for about 3 years.

[BassBoy]

True HHM, maybe not 100% illegal, but surely a nasty trick played on many consumers, especially those with credit issues. Here's a case I found in Ohio (where I live) about a similar situation.

http://www.naca.net/WhitakerAppealBr...al080505_0.pdf

And yes, 21% is outrageous!