Popular posts, last 5 minutes

Confident Consumer: Don’t take car until loan is final

February 7th, 2013


It can seem like a great perk: Driving your new or new-to-you car home while a dealer works out the financing.

But it can turn out to be a bad idea.

That’s because the terms of the loan deal discussed at the dealership can change to a much higher rate after a buyer takes a car home. Unscrupulous dealers may try to bring buyers back one or more times to sign new, costlier deals — a practice known as “yo-yo financing.”

Prodded by state attorneys general and consumer groups, the Federal Trade Commission is considering whether to propose new regulations to address the practice.

The National Automobile Dealers Association said in a statement that it’s important for regulators to distinguish between “fraudulent yo-yo financing” and what it calls “legitimate conditional sales or spot deliveries.”

NADA calls yo-yo financing “abusive spot deliveries” and says the practice already is illegal in every state because it is deceptive or misleading. In such cases, the dealer acts in “bad faith,” such as knowingly quoting a rate that won’t be approved for that buyer, failing to say the deal being discussed is conditional and refusing to give back the down payment or trade-in if the deal is not approved.

And those are the exception, said NADA: “Tens of millions of conditional deliveries occur nationwide each year without any hint of problems for consumers.”

But Dana Manner, a Miami auto fraud lawyer, says about a third of his practice involves yo-yo financing cases. And Phil Reed, Edmunds.com’s senior consumer advice editor, says the shopping service has gotten a “steady stream” of complaints about it for years from people with “mid-tier” credit.

The Center for Responsible Lending told the FTC in 2011 that 27% of people who contacted one of five groups that handle auto finance problems reported being victims of yo-yo scams. More than half of these 590 people had trouble getting their down payment or trade-in vehicle back, or had the dealer threaten legal action against them if the new car was not returned. Most signed new loan contracts at higher rates.

Dealers urge you to take cars home to keep you from going to a rival and to get you used to driving it, says Reed, who wrote a book in 2003 after working undercover as a car salesman.

Dealers argue that they have no interest, however, in putting people in cars they can’t afford, in part because the value drops precipitously once a car is driven off the lot. They say they do conditional deliveries to accommodate consumer preferences.

Whatever the reason or however often deals change after customers take cars home, it’s clear that dealers aren’t the only ones taking a risk. Your trade-in can be sold, down payments lost and use of the newly purchased car could cost you a lot more than you expected if the bad outcomes other consumers have experienced happen to you.

Which means taking a car home before the deal is done is a bad idea, no matter how much you want to and the dealer encourages you. “Dealers want to get you emotionally invested and financially invested in the car,” Manner says.

Marv Eleazer, finance manager at Langdale Ford in Valdosta, Ga., says there’s responsibility on both sides in what he and NADA say are the rare cases when consumers may be subjected to yo-yo financing.

“During the purchase, customers often get excited with that new-car smell and may not listen or note that the deal isn’t finalized, ” he says. “It’s incumbent upon the dealer to strongly emphasize the car is being delivered subject to final approval with a written notice confirming the terms of the delivery.”

How dealer financing works

After dealers run a credit report on consumers seeking financing, salespeople, finance or other managers often estimate what they can offer a person with that credit rating based on how much they put down, the length of the loan and other factors, Eleazer says. If that initial offer is acceptable to the buyer then the process goes a step further for an actual loan approval. Usually, such deals are approved within 15 minutes, he says.

Buyers with low credit scores, however, often get a preliminary offer for financing that might be contingent upon proof of employment or other documentation, and getting these things may take some time. Then, the dealer will shop the loan to various financing sources to get that deal, and the amount of profit they hope to make on it, he says. In the meantime the consumer can take the car on a conditional basis.

But if the consumer has delinquent credit or other issues with their application, the interest rate may be higher than discussed, and the dealer may need to ask for more money down or take less profit.

In such cases, says NADA’s chief regulatory counsel for financial services Paul Metrey, signing a new deal “with a dealer in the conditional delivery situation … is completely optional. Typically, the customer is approved on the terms submitted.”

Consumer advocates, however, say that buyers often believe they have little choice but to take a dealer’s new, less favorable, offer, especially after they’ve already driven the car and shown it to family and friends.

The FTC won’t comment on its deliberations, but Malini Mithal, assistant director for financial practices, says that because auto purchase and financing is such an “expensive and complicated transaction … protecting consumers in the auto marketplace remains a top priority for the commission.”

How to avoid car financing problems:

1) Know your credit score and what’s on your credit report before applying for financing from a dealer or other lender sources.

2) Join a credit union and see what loan amounts, terms and interest rates you can get from there or from other lenders before you go to a dealer to buy a car.

3) Don’t bring the car home until it’s truly yours — that is, the deal’s sealed.

4) Consider renting if you have to have a car before the deal is final.

5) Check out resources, including the Center for Responsible Lending, the industry-based www.autofinancing101.org and the Consumers for Auto Reliability and Safety.

Tags: Submit Your News  Politics  Conspiracy  Spontaneous  Confessions  
Author:
Source: http://rssfeeds.usatoday.com/~r/UsatodaycomMoney-TopStories/~3/mGWmblJM-Ao/

Check out these interesting topics:

1 2 3 4 5 6 7 8 9 10

Feinstein Rolls Out Draconian Attack on Second Amendment

Kurt Nimmo
Infowars.com
January 24, 2013

Senator Dianne Feinstein unveiled her promised attack against the Second Amendment Thursday on Capitol Hill. The legislation she has proposed following the Sandy Hook massacre last month will reinstate and significantly extend the federal ban on so-called assault weapons that expired in 2004.

“The purpose is to dry up the supply of these weapons over time,” Feinstein said. “Therefore, there is no sunset on this bill.”

Obama has vowed to sign Feinstein’s legislation if it clears significant hurdles in Congress.

Feinstein assembled an all-star cast to call for unconstitutionally rolling back the gun rights of millions of Americans. Those in attendance included senators Dick Durbin, Chuck Schumer and Rep. Carolyn McCarthy. The California lawmaker surrounded herself with “law enforcement officers, faith leaders, mayors, gun control advocates and other Democratic supporters of the bill,” according to Roll Call.

Others in attendance for their obvious theatrical value included survivors of mass shootings in Arizona, Colorado and at Virginia Tech, Philadelphia Mayor Michael Nutter and Charles H. Ramsey, Philadelphia Police Commissioner, the Washington Post reports.

A number of Democrats not attending the media event, however, have vowed to fight the legislation.

On the chopping block are 158 specific kinds of semiautomatic firearms listed by name (see the entire list here) and others – including handguns and shotguns – with at least one specific military characteristic. In addition, the legislation will outlaw all ammunition magazines that contain more than 10 rounds.

More draconian yet, the proposed legislation will target millions of so-called assault weapons already in the hands of Americans by subjecting owners to government background checks.

A number of states reacted to Obama’s call to rollback the Second Amendment and his pledge to back anti-gun legislation introduced by Democrats in Congress.

On Wednesday, Texas freshman Rep. Steve Stockman introduced his Restore the Constitution Act in response to Obama signing a flurry of unconstitutional executive orders and actions following his anti-firearms speech last week.

Stockman’s bill would designate any executive action to be advisory only if it infringes on the constitutional duties of Congress under Article I, or the Second Amendment.

Texas, Missouri and other states have introduced legislation to block enforcement of the gun ban.

Texas Rep. John Otto (R-Dayton) filed HB553 soon after Obama’s theatrical speech exploiting children as stage props.

The bill would make it a misdemeanor for any state or federal official to “enforce or attempt to enforce any acts, laws, executive orders, agency orders, rules or regulations of any kind whatsoever of the United States government relating to confiscating any firearm, banning any firearm, limiting the size of a magazine for any firearm, imposing any limit on the ammunition that may be purchased for any firearm, taxing any firearm or ammunition therefore, or requiring the registration of any firearm or ammunition therefore.”

This article was posted: Thursday, January 24, 2013 at 12:54 pm

Tags: , ,

Share this article:


Tags: Submit Your News  Politics  Conspiracy  Spontaneous  Confessions  
Author:
Source: http://www.infowars.com/feinstein-rolls-out-draconian-attack-on-second-amendment/

Category:

More Informative Information For You:

Political Trends Spontaneous Stuff

 
 

Check out these interesting topics:

, , , , ,

About Jim Smith

Hi members, friends and explorers. I know that some of you will not agree with my point of view. Feel free to let me know your opinion on the issues that I discuss. I was born in Chicago, (the windy city) where I learned how to shovel snow very well. I am an expert snow shoveler. I'm also passionate about politics and I love trying to help and wake up the uninformed and the misinformed.
No comments yet.

Leave a Reply

Scan ME
Scan ME