Looking at new car. Fraud commited by dealer on our credit app.

[Holly_Hobby]

Went in to drive a $15K car. Was steered to drive a $31K car, with half the gas mileage as $15K car. Refused to drive the expensive car.

Loved the cheaper car, steered in to talk to the business agent. He asked about our income, we told him. When it came time to sign the credit app, he had inflated our income by 20%. I reminded him that was fraud, he said he wanted to get us the best interest rate. I reminded him that's how the mortgage business blew up. He just shrugged his shoulders. We left. BTW, the only debt we have is another car payment, our home is paid off. Our credit score is 740. This dealership sells cars made by one of the car companies that was bailed out.

Ally Bank will be getting a call from me tomorrow to let them know that the ***** dealership here is defrauding them. BTW, Ally Bank is formerly GMAC, which I didn't know.

[AlabamaLibrul]

1. GMAC Mortgage has also halted foreclosures in 23 states because of improper / insufficient

paperwork.

Makes you wonder if this is a top-down sort of thing, or what?

[Holly_Hobby]

3. Wow, just wow n/t

[dixiegrrrrl]

2. Ally bank will not care.

They have used fraud for years on mortgage sales.

[Holly_Hobby]

4. I didn't know, thanks n/t

[dixiegrrrrl]

33. You might want to check this out:

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=114x82382

[unblock]

19. oh yes they will care.

the securitization business has changed in the last couple of years thanks to the blow-up, and banks are FAR more conservative and responsible when it comes to credit underwriting than they were back when nobody cared to look at such things.

[AlabamaLibrul]

5. On the topic of naming, it is interesting that the publicly life-supported corporations

Are allowed to change their name, hire a new PR firm, and act like they're the new hip kids on the block.

AIG has also become "21st Century Insurance" (presumably named so because that's the birth date of its reincarnation) for their personal products.

[Holly_Hobby]

6. I find it interesting that a Dodge dealer would be using GMAC's bank n/t

[Duer 157099]

8. Re: 21st Century Insurance

No, they took that name because it belonged to one of the companies they bought out. It used to be 20th Century Insurance back in the old days. Obviously they had to change it in 2000.

I've been with them for as long as I've been driving, and they have (had?) a stellar reputation.

That's why they took the name.

[Lucky Luciano]

13. ..and it has been sold to another company - no longer part of AIG. nt

[old mark]

30. We have 21st Century - It no longer belongs to AIG. It is good car insurance. nt

[madokie]

7. We all should be doing the same when we're faced with similar circumstances

I remember once years ago when I was in the market for a new truck and when the finance officer went to telling me how he had to use 'Creative Financing,' his words, I bailed on them. by the time I was out the door I was being told I was all kinds of no good for all the trouble I had put them through and then changed my mind but I just blew it off. I should have reported it to the car company but for some reason I just let it slide. That was back when I was young and dumb. I live for those kinds of situations now though so I can get right back in their faces.

You are doing what is right

[hayu_lol]

9. This could have been a 'dealer-recourse' contract...

you were good enough for the dealer to take a chance. If you reneged on the contract, the contract was returned to the dealer who had to buy it back.

[unkachuck]

10. "He just shrugged his shoulders."

....this is what occurs when you have a market meltdown with financial collapse and don't punish the guilty or reform the system....deja vu all over again....

[customerserviceguy]

11. Glad to hear you walked out

That's the only way to really deal with fraud. Maybe there are places where you can post an opinion on a website. I like to use Trip Advisor when I look for lodgings in a place that I'm not familiar with, maybe there's one for auto dealers, too.

[FBaggins]

17. Exactly. They've proven that they're willing to cheat those they

have a business relationship with. Why would anyone want to enter a new
one with them?

[SlipperySlope]

12. Join a credit union

Join a credit union (and stop supporting the big banks).

Next time you go car shopping, get pre-approved for a loan at your CU first.

Then you won't have to deal with dealer financing games.

[Tace]

14. JP Morgan Chase Offered My Wife And I A "Liar's Loan" Mortgage In 2007

I was stunned, and I'm a veteran financial journalist.

It was for a lot of money, too.

I walked away, telling my wife that "If you have nothing but your honor, you have everything. If you have everything but your honor, you have nothing."

I still feel that way.

[pipi_k]

15. Same thing happened to me in 1994

Went to a dealership to look at used cars...salesman tried to sell me a new car and when I said I probably wouldn't qualify for a loan based on my salary, he said he could "fix" things so I could.

I gave it some thought for about 1.5 seconds and then said "No thanks" and left.


Not only would I not be able to afford the payments, but I didn't want to commit fraud even if he didn't care.

Not his neck on the line....bastard!

[Tace]

16. I Think The Reasoning Of The Fraudsters Is That The Buyer Deserves...

to be screwed if they are foolish enough to compromise their integrity.

Sort of like liars who don't respect people who believe their lies.

[unblock]

20. the thinking of fraudsters doesn't extend beyond "i want my commission and i can get away with it"

the consequences to customers and banks and the government and the economy are not their concern.

[XOKCowboy]

18. Here in Denver we have GO car dealerships. Their commercials feature a guy who approves every loan

Foreclosures? Bankruptcy? Late Payments? No problem. GO will finance you. You'd think people would be outraged after the credit bubble but now. The APPROVED guy is now on his 3rd or 4th different commercial for them.

:shrug:

[LynneSin]

37. Those loans are way different than typical car-loans

We have those places here in Delaware too. They do 'pay-as-you-go' loans where the rate is outrageous and you pay directly to the dealership, sometimes the payments are weekly to ensure the owner keeps up on their payment.

And what's worse, they sell them bad cars.

About 3 months ago I was in need of a replacement car. My car was totalled and I had no desire to have car payments or depleting my bank account so used cars was the way to go for me. But finding what I wanted was difficult to do so as a lark I opted to stop at one of those 'pay-as-you-go' sites. I figured if I was paying cash the guy isn't going to argue about it. (which to be fair - he didn't care).

But before he knew about my cash situation he asked me some questions. "How was my Credit", "How much can you afford each week". I explained I had excellent credit and I was paying cash. I was here to look at some cars I saw on his lot that interested me (He had some VWs). As we walked to those cars we passed some junkers and he pointed at them and said "Oh you wouldn't want those, those are for our bad credit customers".

I just wanted to leave. The guy and his business creeped me out.

In a nutshell, for him if you had bad credit he'd finance you with a car that was probably worth $500 trade-in if you're lucky. For him, if you defaulted he didn't lose anything except a piece of junk car.

[unblock]

21. most dealers (surprisingly enough) actually play by the rules, but plenty do not

i've worked in the car loan business and can tell you this:

the reputation of used car dealers are deservedly worse than that of new car dealerships.

the most reputable situation is a new car dealerships selling a new car. these loans are usually solid and by the book.
next best is a new car dealership selling a used car. these loans are generally good. the new car dealership usually doesn't want to risk their reputation, but may be tempted in order to close a sale.
the worst is a dealership that sell only used cars. some of these are decent and honest people when it comes to loan apps, but many are happy to "cut corners" any way they can. loans from these are suspect.

one of the favorite tricks is to manufacture a down payment where none exists. a down payment makes a car loan far more appealing to a bank, because they like to see that the customer has something to lose if they don't pay. so, say you come in for a $15,000 car but nothing down. well, they put the paperwork through as a $17,000 car with $2,000 down and apply for the same $15,000 loan you wanted in the first place. this looks a whole lot betterto a bank, but of course it's a complete fraud.

[DainBramaged]

38. Telling that to people here is like throwing water on an electrical fire

they don't give a shit, and ALL of GM and it's dealer base is considered bad anyway.


OH and PS, dealer 'cash' (right now some GM models have up to $6000 in dealer cash or hidden rebates to move the 10's off the lot) helps inflate down payments making it easier to buy a car.

[Hannah Bell]

22. they & the banksters get more money that way.

the bank probably doesn't care.

[Zanzobar]

23. You should just consider it a graduated loan.

The only people who will get hurt are the ones who can afford it.

[JVS]

24. Good. Now see how much he'll knock off the bottom line in order not to be turned in!

:evilgrin:

Note: advice not meant seriously, blackmailing is wrong.

[southerncrone]

25. Go buy a Ford.

You'll love it, too.
There's a reason they didn't need a bail out.

[Zanzobar]

27. And that reason is, Gillooly.

He made timely financial decisions to float the whole kaboodle at just the right time. Any other time and kaputski was on the horizon. It was truly a million in one desperation shot that paid off. Ford's quality is pretty good, but that's not the reason they didn't need the bailout.

[Scuba]

29. Bingo.

[Sen. Walter Sobchak]

26. I didn't finance, but I got roughly the same bullshit

When I bought my Honda Accord I was down to a short-list of the Ford Fusion, Honda Accord and VW Passat.

All the Honda dealers wanted to do was show me Acuras, all the Ford dealers wanted to do was show me SUV's combined with all sorts of hard sells for financing.

A Ford dealer took the cake when upon refusing to look at the Ford Edge SUV the salesman suggested I was a homosexual.

[sofa king]

34. Dealerships suck. You should avoid them.

New cars suck. Even before a dealership jacks you on the payment plan, parts, service, and extended warranties, the vehicles themselves are deliberately overvalued, often by thousands of dollars. The second the car becomes yours, its resale value drops, and you have to eat the premium. Every single step of the process in a dealership is designed to pay for itself and deliver a little extra, and you pay for all of it.

Used cars are a better deal, and with just a little common sense and a couple nights of research, you can figure out how to separate good cars from bad. Used cars sold at good dealerships are usually pretty decent, but you still get all of the rapacious nastiness of a dealership--and dealerships are expert at temporarily concealing mechanical problems, too. For example, an inconvenient valve-tick can be concealed by adding a few milliliters of transmission fluid to the oil, but it doesn't fix the problem and probably creates others.

Individual owners usually are not as crafty. If you just can't negotiate the deal yourself and don't have a friend who can help, try looking into an independent dealer (NOT an independent dealership). These individuals have all the appraisal skills that a dealership has, only their main interest is in delivering a good car to you (so that you'll buy another through him later), rather than soaking you for everything you have.

Edit: I should add that it is still possible to buy an expensive used vehicle directly and make payments on it by negotiating a personal loan through your bank or credit union.

[Statistical]

36. Long term new car's aren't that bad of a value.

Depreciation tends to follow a curve.

So yes if you tend to buy a car every year or every other year then new cars are prohibitively expensive.

However the difference in TCO (total cost of ownership) between buying a new car and keeping it 10 years/ 120 miles or a 2 year old car and keeping it 8 years (120K) total miles is negligble.

For some the security in new car warranty and not having to take risk of getting a used car w/ "camloflauged" issues is worth it.

[sofa king]

39. You have a point there.

I myself was always a "sh!tboxer" who flatly refused to put more than a couple thousand dollars into any car. I realize that some people, however, don't approach cars with that kind of ruthless pragmatism.

Poverty combined with that pragmatism has moved me out of cars entirely. Now I ride mopeds. One of my mopeds which I bought new cost me less than 16 cents per mile, including the cost of the helmet I bought three years ago. I expected my second one, which I got used, to pay for itself in three months and in fact it is already down to 20 cents per mile and may drop to half of that if it lasts a full year. No sane person would ever attempt to duplicate my experience, however, no matter how cheap it is.

[Sen. Walter Sobchak]

41. my girlfriends dad ultimately found the Accord I bought

Came from a dealership that mostly does trucks and fleet sales. No bullshit or games.

[Statistical]

35. Sadly there is "no money" in small cars.

I was a car salesman briefly (about a year) when I first got out of Army and had no jobs skills.

Compact cars under $20,000 usually have <$1000 between retail and invoice. Given most consumer's pay less than sticker price the effective margin is much much lower (maybe 2% of selling price).

Now midsized cars like Accord has a little better margins (maybe $1,500 - $2,000) but even then rebates, and price reductions usually drop that to $1,000 (say 5% of selling price tops).

Dealerships (and salesman) love SUV because the American public has decided they are valuable. Margins are easily double that of small cars. Eventually if enough Americans start considering SUV to be trash and smaller cars to be valuable you may see more equitable margins until then small cars will be seen as a "last resort" (better to sell them next to nothing than nothing).

[Sen. Walter Sobchak]

40. That may well be the case,

but they need a better sales pitch that "Well, if your looking for something to impress the men... we just got a nice Sebring convertible on trade-in"

[Missy Vixen]

28. IMHO

Call your state's attorney general office in the morning. If they have a consumer division, ask if you can fill out a complaint.

We live in Washington, which has stringent consumer laws. I wish everyone else did. In the meantime, though, filling out a complaint is always a good idea, and what the business agent did is I-L-L-E-G-A-L.

FYI: Another car dealer and financing company got busted for something similar a few years back. They haven't been able to do business in Washington State since 1995.

[Statistical]

31. Get preaproved BEFORE you ever go to dealership.

Many places will give you a "blank check" with limits, terms, and rates already defined.

Most credit unions offer this.

So does CapitalOne
http://www.capitalone.com/autoloans/blank-check/index.php

At dealership only thing you need to agree upon is the price.
Even better you can ask them to see if they can BEAT the terms on your "blank check". If not fill out the check and get loan at terms you knew in advance. If so well that in win-win. The terms/rate/fees can only be better right?

[pipi_k]

32. That's what we did too

when we were looking for a new vehicle five years ago, and then again this past year when we were in the market to sell this house and buy another.

Actually, I don't know why more people don't do it. Especially when they're in the market to buy a home. Yeah, it's basically a buyer's market out there now, but that doesn't mean it's cool for buyers to come out, look at a house (twice!!), get the owners all hyped up, then announce that they "can't afford" the house.

[ladywnch]

42. there was dealership here in Denver a few years ago caught doing the same thing

they were inflating people's income to qualify them for vehicles they would never be able to afford. they were changing professions and all kinds of info. Of course when it all came out it was just " a few bad apples" and they would 'never condone anything like this'.....uh huh. from the report it was well understood this was the operating model. how these guys stayed in business is beyond me.

[Jack_DeLeon]

43. Dont you want the best interest rate?

Assuming you had already come to an agreement for the $15k car you wanted for $15k or atleast some $ amount you were happy with and you think you can afford, what does it matter if the bank thinks you can afford it even more easily.

Now if you could barely afford it an the dealer was pumping up your income to get you a loan you didnt deserve then that would be wrong.

That being said you should always have your own financing before hand at a rate you like, then if the dealer can do better you go with them, if not stick with what you got. Then all you got to worry about is the final price.