Odd thing that I've noticed...

[mrsilv04]

Every time I'm at the Credit Union, I check out what I refer to as "the repo row". It is the cars, trucks, vans, motorcycles, and boats that people apparently haven't been able to make the payments on, for one reason or another... and the credit union sends out the repo man to get them back.

However, one odd thing that I've noticed. Every three in four cars have the same dealer's name on the back, or has the dealer's plate frames still on it.

It would sure seem that one sleezy Toyota/Mazda/Kia/Scion/Hyundai/Volkswagen dealer is doing a good job of putting people in cars that they apparently can't afford. And you'd think that the geniuses at the Credit Union might notice that as well... and they might throttle back the upper limits of credit at that dealership just a tad bit.

I can't imagine that the Credit Union *likes* losing money on these repos and *likes* taking cars back... but apparently they aren't very observant either. I would think that if anyone at the Credit Union ever noticed the correlation...

As a member of this Credit Union, I'd sure like for them to stop blowing money this way. Who do they think they are, the federal government?

 

[eljefino]

I suspect these are late model cars but the "buy here pay here" clunker lots get a large down payment that pays the wholesale price of the car then a monthly nut that's pure profit. If repo'd, no biggie, they have the equity in the car and come out ahead.

This repo row sounds fascinating!!!

 

[getnpsi]

Not sure if credit unions posess the license to sell automobiles even if they own them. They might just use the dealer nextdoor to do the sales, prepwork etc. for them. My credit union boasts 2.5% used car rate but if you are only 3 years away from paying off at 9% its dumb to add on 1-2 more years. People see bills as montly payment, I can still see an auto loan as 24 or 36 left, even if my rate is worse it would be over faster.

 

[mpvue]

I sold cars for a little while, and one thing I learned is that the lender and the F&I guy are in cahoots. the bank never really loses money, they make all their money right up front.
another thing I learned is that people buy cars they really can't afford (duh!) and are really only concerned with the monthly payment. and sometimes they can't even afford that.
as for your observation, of course some dealers are better at up-selling than others. or they just may be the biggest dealer in the area.

 

[eljefino]

The credit union has the lien and owns the car until its paid off, the dealer handles the paperwork. Supposedly an officer in the credit union dictates who gets approved, but their criteria are getting fudged by this shady dealer.

 

[Quattro Pete]

Originally Posted By: eljefino
This repo row sounds fascinating!!!

Yeah, I know!

mrsilv04, which credit union is this?

 

[Mr Nice]

I notice that when I drive by the public school credit union.

 

[Cristobal]

This happens all the time in Los Angeles. They sell the cars on a big down payment to a person who they know cannot afford the monthly note. The car is repossessed and sold again & again and the process repeats itself. The borrowers have to pay a lot of money to get out of the loan even after repossession. It is a cash cow for the lender.

 

[OtisBlkR1]

we have a big local bank in our area that does a lot of this, they even have a big "bullpen" by there corperate office on the main drag through town. there'salways repo's in there. Most of the repos i see are new cars, I wonder if they just dont bother with the older ones or what the deal is ? anyways the bank lists the cars for sale on there banking website for sale at prices below retail. they resale alot of cars. they also sell alot of land, homes, comercial buisness, etc.. like i mentioned before. Big local bank.

 

[mrsilv04]

Originally Posted By: getnpsi
Not sure if credit unions posess the license to sell automobiles even if they own them.


They do, they take sealed bids and sell them. However, you can't finance a repo that they sell with them. You have to finance it elsewhere.

They had a big Sierra that I submitted a bid on. I asked them if there was any way that I could drive it, and they handed me an Illinois license plate that had "REPOSSESSOR" on it in big letters.

People *looooooked* at me while I was driving that truck with that plate.

Want to feel like a big bad guy? That's a good way.

 

[Kuato]

Originally Posted By: mrsilv04
...

As a member of this Credit Union, I'd sure like for them to stop blowing money this way. ....



As a member, you should be able to go talk to a manager about what you've noticed. For a CU, this is a bad practice because either A) they're losing money or B) they're allowing members to ruin their credit with bad loans or C) Both. Time to tighten things up, CUs are supposed to be there to serve their members, not repo cars.

If it was a bank, maybe...meh. But a CU is supposed to be different.....

 

[JHZR2]

Since when do credit unions go around selling loans to the general public via car dealerships?

That makes zero sense to me, by virtue of what Ive experienced as the CU's business model, which is depositor owned, restricted membership operations.

It just doesnt make sense to me for a dealer to use a CU vs a commercial bank or the financing arm of the manufacturer, who lends to everyone simply based upon income and credit.

Some credit union might be "easy", and have laxed requirements, but then it should hit all makes and models equally, based upon popularity within the region.

I think the correlation between dealer and make, unless the dealer is somehow in cahoots with the CU, and gets prospective buyers to sign up for membership in the CU, is that it has more to do with the demographics of the buyers in the area, their selection in cars vs some kind of industry and/or other criteria that makes them more prone to losing their cars.

 

[daves87rs]

Sounds fishy either way. Doesn't sound like a credit union I'd go to.....

 

[mrsilv04]

Originally Posted By: Quattro Pete
Originally Posted By: eljefino
This repo row sounds fascinating!!!

Yeah, I know!

mrsilv04, which credit union is this?


I've sent you a private message.

 

[antiqueshell]

Originally Posted By: Cristobal
They sell the cars on a big down payment to a person who they know cannot afford the monthly note. The car is repossessed and sold again & again and the process repeats itself. The borrowers have to pay a lot of money to get out of the loan even after repossession. It is a cash cow for the lender.


This ^^^^^^^^^^^^

 

[01rangerxl]

Originally Posted By: mrsilv04

It would sure seem that one sleezy Toyota/Mazda/Kia/Scion/Hyundai/Volkswagen dealer is doing a good job of putting people in cars that they apparently can't afford.



Where "Everybody ridez 2 day! Ur job is ur credit!"

A Suzuki dealer in Charlotte is notorious for stuff like this. The bulk of their inventory is ragged out auction cars and they play all kinds of games with people. I know one person who was a victim of the scam where they tell you they need to "make some changes to the financing" after having you take delivery of the new car and they have your trade.

 

[VicVinegar]

Originally Posted By: mpvue
I sold cars for a little while, and one thing I learned is that the lender and the F&I guy are in cahoots. the bank never really loses money, they make all their money right up front.
another thing I learned is that people buy cars they really can't afford (duh!) and are really only concerned with the monthly payment. and sometimes they can't even afford that.
as for your observation, of course some dealers are better at up-selling than others. or they just may be the biggest dealer in the area.


Yeah, and a lot of people are terrible with money.

I was also in the business for only a short stint, but in that time I saw people make decisions you just wanted to shake your head at.

One guy made about $70k a year and we struggled to get him bought at 13-14% on a $16k new car. He was happy with the deal.

Another woman had such a problem getting financed that she didn't even care what the price was. We ran her credit buying at sticker just to see if it went and when I told her what she was approved for she was ready to sign whatever. I think that loan was only 10%. We also gave her a modest discount even though she didn't care about it.

Then of course were the monthly payment seekers who would have taken a 240 month loan if it got their payments to what they could "afford".

Everyone's situation is different, I get that, and people need reliable transportation, but I'd argue a 60 month car note at 10% probably isn't the best way to do that. Most of the time you wanted to take them aside and suggest buying something cheap to get them by until their credit improved. But, that wasn't the job I was being paid to do.

The upside? I think all those loans came with "free" gap insurance. At least they threw that in.

 

[SwampSurvivor]

Credit unions are in it for your money just as much as banks are .... they just don't have as highly paid staff to satisfy.

There are a few local dealers that refer anyone to a credit union. One of the local credit unions (one I'm part of), has a reputation of financing anyone for anything; they don't advertise it but they tend to do that.

Most of the local dealers try to hook you up with Ally or a local bank from what I have seen. Some of them have crazy high auto loan rates too ...

I noticed there were a lot of cars in their back parking lot, I always thought it was just employees ... I'm going to see if they were repo'd.

Helping a friend go car shopping recently, I was amazed at the amount of NEW CAR dealers that try to do this stuff! I always thought it was just sleazy used car dealers.

One of the places was a dodge dealer (we stopped to look at an Accord) and the sales guy kept insisting the payment would be $200 a month with nothing down and a modest trade. He wouldn't tell us exactly what the figures were on the car (price, loan interest, etc) but was adamant that it was only $200 a month. Scary.

 

[uc50ic4more]

Originally Posted By: mrsilv04
As a member of this Credit Union,


It isn't a bank: you *are* a member and have voting rights - Why don't you bring it up to someone?

Originally Posted By: Miller88
Credit unions are in it for your money just as much as banks are ....


But, in very stark contrast to a bank, credit unions are not separate from those they serve.