Dealer Tried To Pull a Quick One

[javacontour]

Not only the loan principle, but the payment.

I don't think the interest is a figure they can just plug in. The payment, interest charged, etc are fields that are filled in based on the principle and rate.

So there is really no way to fill in the finance charges.

They can play with the rate, or not correctly back-calculate the actual price of the car based on state fees, taxes, etc.

Those are more likely sources of the discrepancy.

That's why I negotiate one number, the OTD price with all the taxes, fees, etc, including trade.

I don't play the games of springing the trade on them at the last moment, because I already have an idea of where I want the difference to be if there is a trade. I come in with a bank draft if I'm financing, so my bank, USAA, whom I trust will do the calculations.

But if I'm not happy with the numbers, I walk away. No games, etc.

 

[The Critic]

Originally Posted By: javacontour
Not only the loan principle, but the payment.

I don't think the interest is a figure they can just plug in. The payment, interest charged, etc are fields that are filled in based on the principle and rate.

So there is really no way to fill in the finance charges.

They can play with the rate, or not correctly back-calculate the actual price of the car based on state fees, taxes, etc.

Those are more likely sources of the discrepancy.

That's why I negotiate one number, the OTD price with all the taxes, fees, etc, including trade.

I don't play the games of springing the trade on them at the last moment, because I already have an idea of where I want the difference to be if there is a trade. I come in with a bank draft if I'm financing, so my bank, USAA, whom I trust will do the calculations.

But if I'm not happy with the numbers, I walk away. No games, etc.


You're right, I'm probably wrong. After some thinking, it seems unlikely that the dealer would manually calculate the interest on the loan.

I went ahead and gave the sales contract and retold the story to my friend who is an independent auto broker in NY. He agreed with you and said that a number of things could've caused the inflated payment. He thinks that the dealer must have tried to mark-up the interest rate initially, but later backed off.

 

[Tornado Red]

Originally Posted By: M1Accord
Personally, the best way to finance a car is to pay cash and make monthly payment to yourself. I can't see myself buying a new car, let alone a $20,000 car. Everyone should get a new car once but continuing buying new cars every few years is a biggest financial mistake ever. A car you like enough to buy new should be good enough for you to like it 20 years from date of purchase. If you constantly switching cars, you're not really car person and more like a show-off person.


Most everything you say is correct, just not the first two sentences.

The decision whether to buy new or used depends on the individual's or family's situation: how much they drive each year is the key factor, IMO. If you drive a lot and keep your cars for a long time, then depreciation is not as much a factor. But too many folks who drive less than 10k miles a year are paying several thousand each year in depreciation. They would be better off buying a used car, maybe a nicer one than they could afford if they were buying new.