2013 Purchased last week...Dealership calls me today and says...

First, thank you for the compliment. I honestly do appreciate it.

Please understand that I am not saying that every dealership, and every salesman is honest. I even said in my posts here that the dealerships are there for the purpose of making a profit. What I HAVE been trying to show in my comments here is that I do not feel that the dealership was taking advantage of the OP. From what he explained he left with the truck under the understanding that he was good, HOWEVER after the finance company did a full credit evaluation it appears that they wanted a bit more of an equity from the OP. Even he said that the finance company said that there was a problem. This is not the dealership's fault. This is how the finance companies work when it comes to purchases such as cars, trucks, boats, etc.
The same thing happened to me many years back when me and my 2nd wife went to buy a van for the family. We traded in our old one and was offered $1600 for it (Old van, high miles, to be honest I didn't think it was worth $1000, much less $1600) and the purchase price for the new van was acceptable to us. The initial financing went in and was good. A week later we were called in and was told that final approval was denied, and that we would need a more substantial "equity trade". Since we were not going to add any more cash, the finance officer played some interesting pool with the bank. Old contract ripped up, new contract with $2600 trade, but the price of the van was increased by $1000. (When you look at the math, it is a wash, trade in value went up, cash sale went up same amount) Now the loan itself was for the exact same amount, but since we had a $2600 equity trade in, the bank then approved the loan. It just shows you that it is a number game, and it is up to the lenders for approval or denial. Not the dealership. I mainly was trying to get people to understand 2 things. 1: It was not the dealership that was trying to "scam" him. Even the OP said that the extra cash went onto the loan, not the dealership. and 2: Read your contract, because pretty much every one of them will say that the contract is open to cancellation if final financing approval is not met. Again, not the dealership's fault, it is the lending institution who is doing the initial approval, then coming back later demanding more.

 

They financed GAP insurance, then demanded more down payment. Doesn't sound like he got the GAP money back - he got hosed. $3K down on a Tacoma (one of the highest retained value vehicles on the market) he sure doesn't need GAP.

It is a scam (and was from inception) - is it legal? Sure it is, but it's still a scam. Stick to talking about turning wrenches.

David

 

Dealerships look at critera on charts from preselected lenders. They just make sure the person sitting in front of them falls into one of those boxes. Then they send all the paperwork to one of the lenders and the lender has an underwritier, like me, look at the risk. Each lender may have additional critera for special situations the dealership was not initially aware of. The borrower may have had an ok credit score but little credit history so to minimize the risk the lender required more down. Putting an extra 2,000 down doesnt hurt the OP. If the OP wanted to play hard ball toyota may have been able to make an exception to there own lending rules and put it in there portfolio. Im glad the OP got it all worked out.

 

How much is gap? Like $2/month?

 

I'd pass on it, plenty more out there

 

Was that a 5 year loan?
I was able to get a 1.5% for a 4 year loan thru credit union.

 

For a vehicle that holds value (like the Tacoma), a moderate down payment and good credit, GAP can be had for $200 or less - of course you are pretty much just giving them $200 because there is never going to be a gap. I wouldn't be surprised to find out they stuck it to the OP for $500 or more.

This business of written applications being sent off to lenders where they are "evaluated" is pure Kabuki Theater. This isn't a home loan, there is no man with half glasses punching in numbers on a calculator - "Let's see, if I work the numbers like this... No, no, that didn't work. Hmmm let me try it this way....". The critical information is fed into a computer and answer is spit out. Done.

Loans typically are not shopped outside of Toyota financial services unless you've got bad credit. Regardless, the dealer knows within a few minutes of the paper work being filled out whether the financing will go through or not. In this case, Toyota (or whoever did the loan) wanted another few thousand more down than the OP wanted to give, so they wrote a bogus financial agreement that wouldn't get approved and let him drive his new truck for a week. Then they call and say you've got to give it back or get us another $2000.

Yes, I know it was applied to the loan and his payments went down a little. Regardless, they upsold him using a bogus financial agreement, gave him time to really start "loving that new truck" then called him back. It was always a scam to get him to execute the deal they wanted that he wouldn't initially sign and it worked!

I see several others have stated that this has happened to them or to others when they were young vehicle buyers. Anybody ever hear about this happening to a middle age guy that has just been through a divorce and has wife has just wiped him out and left him penniless? Do you know why you don't hear about that? Because they know he doesn't have any money and he doesn't have anybody to give it to him or cosign. He either meets the terms of the loans or they send him on his way.

If the OP can afford the new terms some want to say no harm, no foul. The dealership upsold him in an unethical fashion and I would have handed them the keys back and gone down the street and made another deal (even the exact same deal) with another dealership just so I wouldn't allow the unethical dealership to make money/sales quota off of me.

YMMV
David

 

I bought a 2011 brand new with $17,000 trade in and over 800 credit score. Finance lady said she had never seen a credit score as high as mine. I only got 4 something on the interest rate. Go figure that. I didn't care because I paid the truck off 6 months later and I got $500 of for military. The way I see it sucks the OP had to put more down but this will lower the interest paid.

 

+1...couldn't have said it better myself!!

 

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

Well said, very well said....and probably closer to the truth than many here want to admit...bottom line, he got a Yota and he is happy...

Now the real fun begins, mods....

Oops this post was meant for Canazes9...slow on the draw, LOL

 

Mine was financing 10.5k. I had 6.5k on my trade. I normally won't trade b/c most of my cars aren't worth much. This was my 06 Colorado and I could have sold it myself but was terrified it might come back to me. This way I don't have to warranty it to the dealer, plus got money off the sales tax.

5 yrs. I can pay it off faster if I wish of course.

My Tacoma was 3 yrs old with just under 7k miles when I bought it last October.

 

If they made a deal and sent you out the door, tell them to pound sand

 

Where in ANY of his posts did he say a word about not getting his GAP money back? And again, SHESH this is getting old, HE SAID HIMSELF that it was the finance company that called the loan back. The dealership simply notified him of what the lender said.

Yeah I have. It happened to me in my earlier post. I think you need to look back again at the OPs posts. It is not the dealership that did anything wrong or unethical. It was the lender who as the OP himself stated, that after final evaluation the LENDER said that he would need additional equity.

 

Wow! You're still trying to sell that?


Exactly what secret information do you think is being gathered in a "full credit evaluation" that they don't have the instant you fill out the finance papers? This isn't a mortgage. They aren't going through your bank transactions for the last 3 months, etc.


Did you read the OP's post? The dealer called him back, the dealer needed a check made out to the dealer. The lender is operating off the information the dealer provided them. The dealer knew full well what would happen and if you believe there is any doubt then you are either incredibly naive or part of the problem.


David

 

http://www.fraudguides.com/auto-yoyo-financing-scams.asp

http://www.responsiblelending.org/o...to-financing/tools-resources/yo-yo-scams.html

http://www.nbcnews.com/business/yo-yo-scam-exploits-credit-challenged-car-buyers-712479

Let me know if I need to google-fu up any of the other pile of hits on this subject for you.

David

 

They are bound by the contract same as you.
Nothing they can do about it. They made a deal
And they have to uphold it. This happened with me
And my first new vehicle but they make those contacts
Binding for a reason.

 

Let's see, where do I start? I asked you where did the OP say they took away his Gap coverage that you claimed:

You still have not showed me where he lost his GAP? I see it nowhere. You claim he got hosed, but the OP even says the money went to his down payment. He didn't get hosed, he simply had to make a larger down payment according to the finance company (See below)

I am not sure what your anger is towards me. I am simply providing information from my personal experience and knowledge, and you are taking it as a personal attack against you. Hell, I don't even KNOW you.
Back to the OP, he said the money went towards his down payment, and it even cut his monthly payments down by $50 per month! Yeah, the dealership sure did screw him there...

As for the details, of COURSE the dealer called him. He needed to come back in with the additional down, and sign a new contract. The finance office is not going to contact the OP until AFTER the loan has been finalized. And of course the check is made out to the dealer. You don't start paying to the bank until...get this...the loan is finalized. I am not sure where your confusion is coming from.

As for the application process, I have explained, as others have as well in this same thread, that when buying a car the loan process is NOT instant. You get an INITIAL approval on the information provided to the loan company (How else do you think people with little or no credit can get loans on the weekends?) and then later the lender will get a full credit report and verify everything. Contrary to popular belief, there ARE people who physically look at each and every loan contract at some point. Sure the computers do all the initials, but they still will look at EACH one for a final approval, or denial. They are called loan officers, and you usually have a couple at each and every bank. Their job is to look over each contract to make sure that things look most profitable and safe for the bank. I have been in the auto industry for over 25 years, and my wife at the time spent over 5 years working in the offices dealing with this exact same thing. THAT is how I know the process. Sure, it sucks, but without this system people with little or no credit, or poor credit, would have to wait WEEKS sometimes to get a loan approval when buying from a dealership. The best way to save time and hassle is to go to a bank yourself (Or even better, a credit union) and get full pre-approval for a loan. Then you can walk in with ALL of the power.


As for those who keep talking about a signed contract, go take a look at your contract (I figure you kept a copy) and read the ENTIRE thing. If you financed through the purchasing dealer, it will have a section, usually of course in fine print, that says that the contract is contingent on loan approval. So just because you have a signed contract, does not mean you have the power. If the loan is eventually denied, or a change is required by the lender, the dealership is fully within their rights to retain the vehicle back. It's in the contract.

 

7 posts defending predatory lending practices, followed by documented proof that this is a well known scam (I just copied links to 3 of the more recent hits - there are pages!) and your response is to act as if you are being persecuted?

We seem to have answered the question of whether or not you are naive or part of the problem.

It will be interesting to see if you are the sort of vendor that Tacoma World wants representing the site in the future.

David