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    Dealer took advantage of my situation

    About a week post discharge I needed a car. My car was repossessed and I needed transportation. I don't live where there is public transit, and I drive about 50 miles a day. I spent a week finding the right car for my budget. I found a 4 year old car, for just over 10k. I agreed on the price with the dealership. I was originally promised a loan, with a co-signor, by a credit union at 4.5% When I went to pick up the check, they changed their minds. Even with the co-signor. I was forced to go back to the dealership, tail between my legs, and ask them to help finance. In hindsight, I should have just tried another bank, or rented a car until I had cash, or gone to another dealership.

    They spent hours calling around and finally offered me the best deal they said they could get for me- 12.5%, the requirement that I purchase a $3k extended warranty, and spend another $1.5k for gap coverage since the car would be worth less than I owed. My affordable $10k car went up to $14.5k. I felt I had no choice, but in reality I should have walked away. This is another way they get you. they make you wait all day, to give you this line: "we worked all day to get you this, this is the best option". You've spent all day there, and you either have something to show for it, a set of keys in your hand, or you have wasted a day and start over the next. This was a blatant tactic on the dealership to extort money from me, and it worked. I since have spoken to other dealerships and they described that as predatory and completely unethical. Even if that was all they were willing to do for me, I should have walked away and gone somewhere else. In fact, if I had walked out they likely would have still sold me the car without the strings attached.

    The silver lining is that a year later, I was able to refinance the car, cancel the gap coverage and get a pro-rated refund on the extended warranty. They dealership sent me a check for about half of that I paid for both. The gap coverage through the bank was offered, and it was $400.00.

    I will never be bullied into purchasing an extended warranty. the gap coverage makes sense, but not at $1.5K.

    I will never finance a car again through a dealership, I will only use a bank. I've tried to trade the c

    #2
    I can understand why they required the extended warranty and the gap insurance. I’m not saying that I think it is fair but I can see why they would want it. Why was your car repossessed after getting your discharge?

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      #3
      Wow, I hope my husband and I won't be ripped off like that when he have to get replacement vehicles. His car is a 2013 and mine is a 2005 (purchased in 2004) and we have three and a half years of payments to finish out this Bk if we make it through!

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        #4
        You can cancel extended warranties and GAP coverage. You usually have around 60 days or so for a full refund and then a pro-rated refund after that. There was a class action lawsuit a few years ago about them refusing refunds in the past. Since then, I have never had a problem cancelling one. They will give you a hard time trying to keep you from cancelling, but just be persistent. Extended warranties and GAP coverage are almost always cheaper from third parties outside dealerships. Never buy them from a dealership. As an example, GAP coverage through credit unions I have used in the past was around $250 on $20,000 vehicles. Also, never sit at a dealer for any length of time; I cannot tell you how many dealerships I have walked out of and they get pissed. I've had one salesman try to block me from leaving before and then cuss me after I threaten to call the cops and that was at a large, well known brand dealer. Sometimes you can get $1,000 off or so if you finance through a dealer. I have done this before and then turn around 30 days later (not even one payment made) and refinanced through a credit union.

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          #5
          If you'd been able to hold out for a month more, you could have gotten a better deal on a new car. Come October, new-car dealerships will do anything to move the current-year cars off their lots. They need the room. I'm already getting calls from dealerships these past few weeks, and it's not even October yet. Come October, the phone comes off the hook.

          I like simple cars. I'd rather spend my money on other things than leather car seats. The cloth ones support my ass just fine. I also prefer manual transmission, which makes me especially beloved to dealerships in October because manual-transmission cars are especially hard to move. So two Octobers ago I drove into a dealership in a used KIA and drove out in a new one. It was a 2016 KIA Soul Base, with manual transmission. Simple car, great on gas, and comes with a great warranty.

          I think I paid less than $16,000.00 for it after the rebates and discounts, with $900.00 down and the traded-in used KIA that I was upside-down on. KIA finance gave me 0.0 percent financing and subsumed the loan on the used car (which was from a credit union) into the loan for the new one.

          That was about six years post-discharge. When they're motivated to move cars, they move cars.

          Your case was a bit worse because a repo is much worse than a BK to auto finance companies. Most people will subsist on Ramen noodles and canned beans before they'll let their car payments lapse, so a repo is the absolute worst thing you can have on your record as far as buying a car is concerned. But as you found out, if you're lucky enough to get a loan, making the payments for a while rapidly recovers you from the repo stain.

          It's all part of the post-BK dance, and we all have to dance it. You're doing fine. You have wheels and you got a better loan. So be happy, my friend. You're doing just fine.

          Richard
          Filed Chapter 7: 8/24/2010. Discharged: 12/01/2010
          Member and Exalted Grand Master: American Sarcasm Society (A.S.S.).

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