blondeviolin Posted February 8, 2013 Share Posted February 8, 2013 Because of his job, we are in need of a second car fairly quickly. We have a VW bug with an bad engine. It needs to be rebuilt. It would cost $3-4k to do that. We also have a mini van with a broken water pump. We have plans to repair the water pump. Unfortunately funds have gotten extremely tight. Saving to fix the bug engine would take quite a long while. Sad tale, right? Well, here's where it gets worse. My husband was told that there is a car dealership here that will pay off loans/credit cards when you buy a new car. We currently have a personal loan that we pay $500 to each month. He's figuring that we could buy a new car and the dealership pay off our loan. He's thinking that we'd be paying the same amount, but get a new car for it. I'm thinking the dealership will roll the loan amount into the new car loan and we'll be paying for both with a higher interest rate. He thinks I'm thinking the worst-case scenario. I'm thinking it's highly likely. Help me convince him that it's not worth it to even pursue it. What a waste of my weekend if he pushes this! Quote Link to comment Share on other sites More sharing options...
Jennifer in MI Posted February 8, 2013 Share Posted February 8, 2013 Can you call the dealership and ask what the deal is? Quote Link to comment Share on other sites More sharing options...
Murphy101 Posted February 8, 2013 Share Posted February 8, 2013 There is no worst or best case scenario. There is this one scenario: They will roll the loans into your car loan and the interest is likely to be too high for either a car loan or an unsecured loan. Quote Link to comment Share on other sites More sharing options...
Guest inoubliable Posted February 8, 2013 Share Posted February 8, 2013 Um, rolling the personal loan in with the vehicle loan is exactly how they'll do it. They don't just pay off your loan for free... I don't know what to throw out for another option. :( Quote Link to comment Share on other sites More sharing options...
LaxMom Posted February 8, 2013 Share Posted February 8, 2013 I would think what you're thinking: they'll use whatever rebates and incentives to pay off the CCs, and roll any balance into the car loan. I don't know how much good information you would get calling them; dealerships want you in their showroom so you feel "stuck" despite the information given to you. Quote Link to comment Share on other sites More sharing options...
Tammyla Posted February 8, 2013 Share Posted February 8, 2013 There is no worst or best case scenario. There is this one scenario: They will roll the loans into your car loan and the interest is likely to be too high for either a car loan or an unsecured loan. :iagree: Exactly.... Quote Link to comment Share on other sites More sharing options...
Parrothead Posted February 8, 2013 Share Posted February 8, 2013 Your dh needs a lesson in finance if he things a car dealership is just going to pay off a loan or CC for free. They will be making money off the deal one way or another. More than likely they will charge a higher interest rate than you are paying now. If money is so tight that you can't save up to have the bug fixed within a reasonable amount of time you don't need to add a vehicle payment you your budget. Unfortunately it sounds like this is one of those cases where one must suck it up and deal with being a one vehicle family for the time being. Quote Link to comment Share on other sites More sharing options...
Element Posted February 8, 2013 Share Posted February 8, 2013 Ugh! That stinks. I'm sorry you're in a tight spot. The only thing I know is a dealership's new car deal is rarely the answer. I wish I had something more productive to offer you. Quote Link to comment Share on other sites More sharing options...
blondeviolin Posted February 8, 2013 Author Share Posted February 8, 2013 He's normally a really bright guy. I just think the allure of getting something while we're making a payment is nice. :rolleyes: I'm betting he'll have to GO THERE and be told how they'll actually roll it all in, see the paperwork before he runs away. *sigh* He is just going to have to take time off work and rebuild his bug engine. I'm pretty sure we can scrape up the funds for that somewhere. He'd enjoy it, but I don't think he wants to take the time off to do it. Quote Link to comment Share on other sites More sharing options...
2squared Posted February 8, 2013 Share Posted February 8, 2013 Can you go to a credit union/bank under the pretense of checking their loan rates, and discuss the car dealership option with the credit union/bank loan people? Maybe your dh will "get" it if someone else tells him, and you won't have to be the bad guy. You could even say, "Dealership xyz is offering this scenario of $ and %. What can you do for us?". Quote Link to comment Share on other sites More sharing options...
Murphy101 Posted February 8, 2013 Share Posted February 8, 2013 Argh!! Even doing that isn't good. That means a credit check, which hurts his credit. And they will probably try charge him a credit processing fee whether he takes the loan or not. I'd be pretty ticked at him at this point. Any dealership working such crappy cars that no one (or rather only the very desperate who don't understand or who have no other option) will buy them unless they can roll in a bunch of other debt for an exorbant interest is 2 steps, maybe only 1 step, above loan sharks. I wouldn't even want to scrape my shoe off on their lot if I could at all avoid it. May you be blessed with more patience than me! :) Quote Link to comment Share on other sites More sharing options...
Hikin' Mama Posted February 8, 2013 Share Posted February 8, 2013 Car dealerships, and other businesses for that matter, exist to make a profit. So of course they are going to roll that loan into the cost of the car loan. The only "benefit" to you is that you'll make one payment a month instead of two. The added benefit to them is that now they are earning interest on your car loan AND your other loan. Sounds like a great money maker for them! Quote Link to comment Share on other sites More sharing options...
2squared Posted February 8, 2013 Share Posted February 8, 2013 Argh!! Even doing that isn't good. That means a credit check, which hurts his credit. And they will probably try charge him a credit processing fee whether he takes the loan or not. I don't think this is automatically true. Anyone can sit down with a loan officer to explore options. In fact, you could make an appointment with the stipulation that they not run a credit check prior to the appointment. Even without an appointment - just walk in and ask to talk to someone. They wouldn't have a chance to run a credit report. Don't you have to sign something to give them permission to run a credit check anyway??? And even if they did run a credit report....it would be a small price to pay to get away from her dh's plan. Quote Link to comment Share on other sites More sharing options...
Murphy101 Posted February 8, 2013 Share Posted February 8, 2013 No, it's not automatic, but it is reliably predictable that these types of dealerships will barely give you a nod hello without a credit check. And the "processing fee" can often be anywhere from $50-$100. That may not be much to some, but for many people in a tight crunch, that's a lot. And really none of them have to pay it, even if they do buy a car. But the pressure to do it is strong and many don't understand they have the ability to refuse. Some dealers even ask for credit card as a second ID and charge the fee that way. Seriously. Those places are swindlers taking advantage of people. Quote Link to comment Share on other sites More sharing options...
TranquilMind Posted February 8, 2013 Share Posted February 8, 2013 Because of his job, we are in need of a second car fairly quickly. We have a VW bug with an bad engine. It needs to be rebuilt. It would cost $3-4k to do that. We also have a mini van with a broken water pump. We have plans to repair the water pump. Unfortunately funds have gotten extremely tight. Saving to fix the bug engine would take quite a long while. Sad tale, right? Well, here's where it gets worse. My husband was told that there is a car dealership here that will pay off loans/credit cards when you buy a new car. We currently have a personal loan that we pay $500 to each month. He's figuring that we could buy a new car and the dealership pay off our loan. He's thinking that we'd be paying the same amount, but get a new car for it. I'm thinking the dealership will roll the loan amount into the new car loan and we'll be paying for both with a higher interest rate. He thinks I'm thinking the worst-case scenario. I'm thinking it's highly likely. Help me convince him that it's not worth it to even pursue it. What a waste of my weekend if he pushes this! Yes, you will be doing this unless you are very savvy. Dealers are trained to play games. The only way you go into a dealer is by having cash or getting your own loan arranged prior to entry at the dealership. Your husband's idea is a bad idea. You will pay heavily for the privilege of rolling in the loans, which is what they are doing. Quote Link to comment Share on other sites More sharing options...
TranquilMind Posted February 8, 2013 Share Posted February 8, 2013 No, it's not automatic, but it is reliably predictable that these types of dealerships will barely give you a nod hello without a credit check. And the "processing fee" can often be anywhere from $50-$100. That may not be much to some, but for many people in a tight crunch, that's a lot. And really none of them have to pay it, even if they do buy a car. But the pressure to do it is strong and many don't understand they have the ability to refuse. Some dealers even ask for credit card as a second ID and charge the fee that way. Seriously. Those places are swindlers taking advantage of people. Processing fee? For what? A loan? I went to a dealer a year ago, just to drive a few vehicles I was interested in (I bought private party). I did not permit a credit check, and only gave him a photocopy of my license with a note indicating NO credit check was authorized, which I then retrieved upon leaving. It was in my view at all times, so I'm pretty sure my restriction was not violated. Quote Link to comment Share on other sites More sharing options...
Random Posted February 8, 2013 Share Posted February 8, 2013 Processing fee? For what? A loan? I went to a dealer a year ago, just to drive a few vehicles I was interested in (I bought private party). I did not permit a credit check, and only gave him a photocopy of my license with a note indicating NO credit check was authorized, which I then retrieved upon leaving. It was in my view at all times, so I'm pretty sure my restriction was not violated. This is wise of you, but I don't think a lot of people are this savvy. I've heard multiple stories from guys who were car salesman, and sometimes, they do charge a fee, without the person's consent. Then, they bully you into paying it. Like, maybe they charge a credit card number that appeared on your credit report and then threaten to send the bill to a collection agency if you don't pay. I've been to both kinds of dealerships, the polite and courteous ones, and the bully-loan-shark ones. It seems that the ones who run the types of 'specials' in the OP are almost always the loan-shark ones. OP, your husband's idea is bad. I hope you can come up with a better solution together. Quote Link to comment Share on other sites More sharing options...
Murphy101 Posted February 8, 2013 Share Posted February 8, 2013 What Random wrote. They call it various things. Credit check fee. Credit evaluation fee. Loan inquiry fee. Whatever they think they can get away with. I've been on both sides. Three kids and crappy finances and the only places in town to get a car are the ones no one who can choose otherwise would ever get a loan from. And yes, I completely agree TM. You go cash or personal bank approval in hand. I'd never get a loan they a dealer if I could avoid it. But I've learned over the years that the average citizen is scary uninformed about basic finance decisions and wouldn't know any of the things you and I take for granted as common knowledge. Quote Link to comment Share on other sites More sharing options...
TranquilMind Posted February 8, 2013 Share Posted February 8, 2013 What Random wrote. They call it various things. Credit check fee. Credit evaluation fee. Loan inquiry fee. Whatever they think they can get away with. I've been on both sides. Three kids and crappy finances and the only places in town to get a car are the ones no one who can choose otherwise would ever get a loan from. And yes, I completely agree TM. You go cash or personal bank approval in hand. I'd never get a loan they a dealer if I could avoid it. But I've learned over the years that the average citizen is scary uninformed about basic finance decisions and wouldn't know any of the things you and I take for granted as common knowledge. I did get one loan through a dealer, but you've got to be tough as nails. I took my two young kids, and they were getting loud and hyper by 9:30 at night. My husband was barely awake, the kids were loud and I was immovable that I would not sign a loan until I got the lowest rate available to people with our high credit score - and I knew what the rate was because I had previously researched it. They agreed in great disgust, with lots of obnoxious comments about how I was taking food out of the mouth of the salesman and finance guy, refused to shake our hands and threw us out of the dealership. This treatment is the KEY way that you know that you got a good deal. Quote Link to comment Share on other sites More sharing options...
Murphy101 Posted February 8, 2013 Share Posted February 8, 2013 Lol. Yep. I did that too once. Quote Link to comment Share on other sites More sharing options...
Granny_Weatherwax Posted February 8, 2013 Share Posted February 8, 2013 There is one and only one question that needs to be answered here . "What year is the VW?" I am wondering if it's a New Beetle or a classic one (pre-1970; I don't care much for Super Beetles). (so asks the VW fanatic) Quote Link to comment Share on other sites More sharing options...
2squared Posted February 8, 2013 Share Posted February 8, 2013 No, it's not automatic, but it is reliably predictable that these types of dealerships will barely give you a nod hello without a credit check. And the "processing fee" can often be anywhere from $50-$100. That may not be much to some, but for many people in a tight crunch, that's a lot. And really none of them have to pay it, even if they do buy a car. But the pressure to do it is strong and many don't understand they have the ability to refuse. Some dealers even ask for credit card as a second ID and charge the fee that way. Seriously. Those places are swindlers taking advantage of people. I suggested going to bank or credit union, not a car dealership. The credit union/band isn't going to do any of those things you mentioned. Yes, a car dealership may, but I have to believe that a financial institution is the place to start with the OP's situation. Quote Link to comment Share on other sites More sharing options...
Murphy101 Posted February 8, 2013 Share Posted February 8, 2013 Oh I would agree. Tho banks can be just as in reputable in practice sometimes. But a reputable bank is not going let them roll their current debts into a car loan either. Which is what her husband foolishly wants to do. Quote Link to comment Share on other sites More sharing options...
2squared Posted February 9, 2013 Share Posted February 9, 2013 Oh I would agree. Tho banks can be just as in reputable in practice sometimes. But a reputable bank is not going let them roll their current debts into a car loan either. Which is what her husband foolishly wants to do. Exactly. That's why I suggested they go to a bank. They can go to a bank, and the banker will explain why that choice is not wise. Hopefully her dh will hear the banker when he isn't hearing her. The banker will be the bad guy, not her. The banker may have other options or ideas for them too. Sometimes you get so far down a path that you can't see your way out. Sounds like her dh needs to find another way out, and maybe a banker would be a good navigator for them. Quote Link to comment Share on other sites More sharing options...
blondeviolin Posted February 9, 2013 Author Share Posted February 9, 2013 Well, he miraculously got off work early, went down to the dealership and asked. I told him he was not to allow a credit check without me, and he listened. Lol So they wanted to "crunch numbers" and got quite irritated when he just told them he did not want a credit check, just a loan amount and interest estimate. The man finally got perturbed enough to pass him off to the sales manager, who also got irritated. In his irritation the manager threw his hands in the air and admitted the extra would be rolled back into the cr loan. My husband felt rather proud he elicited such a response and walked out grinning. What a goof! :joker: We just agreed to taking some money out of our savings for him to get a cheaper rebuild kit and take time off to actually rebuild bug's engine before the baby comes. Not my favorite, but do-able. And he gets to drive the bug again, which he loves. There is one and only one question that needs to be answered here . "What year is the VW?" I am wondering if it's a New Beetle or a classic one (pre-1970; I don't care much for Super Beetles). (so asks the VW fanatic) :lol: It's 1972 standard beetle. He absolutely LURVES his car! Quote Link to comment Share on other sites More sharing options...
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