Disappointed. May have to return vehicle.

[jb1231]

I purchased a car three weeks ago only to find out today that Honda denied credit. I still have Capital One blank check but loan to value clause has me thinking that maybe this won't work. Thoughts? This sucks.

[daxtell]

i used the capital one blank check program. and loan to value is already calculated on the forms they mailed to you and also listed when you log onto the site under your account. it takes into account the total loan versus the value of the car (i.e., edmunds, kelly)... i ended up getting a great deal at a local dealership using this check program on a nice used car that was still 'certified'... within their guidelines for the perks (transmission and engine covered for life etc.). i did a lot of research all over town at all the dealerships before choosing a vehicle though. and when you walk into the dealership, that check is just like giving them cash so you can barter with them. i got them to come down on the price of my car about 1,500 dollars.

[jb1231]

I see. Well, to give some background, LTV is 110%. The cash price of car is $19,385. Add in the taxes, tags and "dealer extras" and everything comes out to $26,800. Not sure that meets the guideline, LTV limit. I feel like a total idiot. Sorry to be a downer.

[IBroke]

The cash price of car is $19,385. Add in the taxes, tags and "dealer extras" and everything comes out to $26,800.

WHAT?? What "dealer-extras" add $5,000 to the price (and I already considered sales-tax)? Tags aren't that expensive either..

I recommend you purchase a car for its value. Buying a $19K car for almost 27K is a VERY BAD idea.

[jb1231]

Let's see:

Lo Jack= $995
Paint Protection= $995
Service Contract= $2400
GAP= $750
License & registration= $343

Those first four items are optional but they managed to toss them in there. The tax on the vehicle price plus those items is $1875.

[jb1231]

Dang, am I going to have to go down there with guns-a-blazin'? (figuratively speaking, of course).

[davedude]

You are getting RIPPED!

$2400 for a service contract is absolutely ridiculous. If it's a certified vehicle then why do you need the extended warranty? At MOST I wouldn't pay more than $900 for a service contract ... and if you are buying a certified car I wouldn't even bother.

Tell them to take the low jack out of the car - you don't want that. Also paint protection is a load of bull - take that off too.

[jetsfan2010]

Take the car back today. No way in the world I would spend 7k over the "cost" of the car. No way...

[ValleYum]

I would look on this as a blessing (to be able to get out of this deal).

I worked for a car dealer as a service department cashier and I can tell you that the paint protection/undercarriage protection/upholstery protection is a joke and 90%+ profit for a dealer. Service contracts are also a huge $$ maker for dealers and usually are not what they are cracked up to be when you need them.

You can usually buy GAP insurance (auto-loan coverage) from your insurance company much cheaper than from a dealer, too.

Good luck in finding a better deal for you.

[helpmeout]

Let's see:

Lo Jack= $995
Paint Protection= $995
Service Contract= $2400
GAP= $750
License & registration= $343

Those first four items are optional but they managed to toss them in there. The tax on the vehicle price plus those items is $1875.

Have them removed. They can't toss them in there without your permission.

[hedgecat]

I, too, have a Cap One blank check for a car and since I just read the details this morning, I can tell you that you can't put the GAP on that check - it's not allowed. If that dealer wants your business, and usually they do, they will find a way to lower the cost of that car plus extras to exactly what you can put on the blank check and not a penny more. What I can't understand is that they let you drive off the lot with a brand new car, only to tell you three weeks later you didn't quality for financing? Now, that's a trusting dealer!

[jetsfan2010]

I, too, have a Cap One blank check for a car and since I just read the details this morning, I can tell you that you can't put the GAP on that check - it's not allowed. If that dealer wants your business, and usually they do, they will find a way to lower the cost of that car plus extras to exactly what you can put on the blank check and not a penny more. What I can't understand is that they let you drive off the lot with a brand new car, only to tell you three weeks later you didn't quality for financing? Now, that's a trusting dealer!

That happens more than you would think. Most of the time they may let you drive off the lot, but then call you back in if the terms of the loan change. I have seen that happen when my ex bought her car.

[nokia123]

I would look on this as a blessing (to be able to get out of this deal).

I worked for a car dealer as a service department cashier and I can tell you that the paint protection/undercarriage protection/upholstery protection is a joke and 90%+ profit for a dealer. Service contracts are also a huge $$ maker for dealers and usually are not what they are cracked up to be when you need them.

You can usually buy GAP insurance (auto-loan coverage) from your insurance company much cheaper than from a dealer, too.

Good luck in finding a better deal for you.

Thank you for that info. I always knew that extra stuff was crazy.

[AlmostAmos]

You are getting RIPPED OFF. Walk, er RUN, away while you still can.

[LadyInTheRed]

When I bought my Honda, I negotiated over the phone with a couple of dealers. I had made a deal with one dealer and the guy called me back to tell me that the car has a paint protection package and hub locks and wanted to add $250 forr the Paint protection and $150 for the locks that I could get at Kragent for $75. I told him I didn't want those items and wouldn't pay for them. They removed the locks and threw in the paint package, which is a few strips of rubber on the edges of the doors and around the wheel wells.

For anyone buying a new car, I highly recommend the Consumer Reports Car Buying Guide. (I'm sure there are other sources out there too). One thing it tells you is don't let them sell you the dealer options. They are over priced and can be had elsewhere for less. It's too easy to be taken advantage of if you aren't educated. Prepare yourself before walking onto the dealer's turf. Once you decided on a car, the CR's New Car Price Report is a good resource. It costs $14 and tells you exacatly what the dealer is paying for the car and what dealer incentives are currently available from the manufacturer. You shouldn't pay more than 5% over the dealer's cost, after inccentives. I think I read that the dealers are usually happy with 2 or 3%, depending on the demand for the model. If you know what they are paying and how much profit they are willing to live with, you are in a much better bargaining position. There is also a $12 Used Car Price Report which I haven't used.

The one extra I bought was the maintenance contract. It covers a certain number of miles, regardless of how long it takes me to drive that far (I have a very short commute). The warranty doesn't cover routine mainenance. I knew the car payment (including the cost of the maintenance) would be paid through my Chap 13 plan and only decrease the amount going to unsecured creditors. It is nice to not have to worry about paying for maintenance during most of my Chap 13. But, I bought it knowing that I was probably paying more than I would if I paid for each service as I needed it.