Really bad financing from wrong fax, sad details inside
Discussion
So today I received two pages of what turned out to be a financing agreement from a local well known Nissan dealer. I received this by mistake but it contained all sorts of interesting information. A close look indicated that this poor bloke was being taken to the cleaners. I'm obviously not going to reveal personal information (papers since shredded), but some facts that I remember clearly below.
Vehicle: 2008 Nissan Altima
Mileage: 48,000 miles (quite a bit for a year old car. Methinks lease return)
Purchase price: $18,000 and change
Down payment: $1,000
Term: 71 months (!)
Monthly payment: something like $360
Interest paid at end of loan: high $7,000s
Total cost at end of term: $26,000 and change
What do you think?
Vehicle: 2008 Nissan Altima
Mileage: 48,000 miles (quite a bit for a year old car. Methinks lease return)
Purchase price: $18,000 and change
Down payment: $1,000
Term: 71 months (!)
Monthly payment: something like $360
Interest paid at end of loan: high $7,000s
Total cost at end of term: $26,000 and change
What do you think?
It's very sad. This particular dealership (one of the largest in the nation from what I understands) advertises quite a bit on the types of radio stations which target the young market. This kind of poor financial decision will ensure that some will never have the chance to save enough for anything worthwhile, including retirement.
I neglected to mention every sort of BS fee known to man tacked on to the financed amount. Really sad.
I neglected to mention every sort of BS fee known to man tacked on to the financed amount. Really sad.
Nick3point2 said:
I don't understand why people don't shop around when taking out finance: obviously I understand some people don't want to wait to save up for something so are happy to pay for finance, but wouldn't you want the best deal?
I think some people are afraid of rejection or failure. Meaning, if they put in the time and don't get a better deal, they'd rather take the deal that is sure fire. The tag line for this particular place is, "Your job is your credit" or something like that, so it could be that they are people on the peripheries in terms of credit or access to it. But something like this certainly doesn't help them...I find it interesting that despite a whole army of legislators and publicly funded Consumer Credit bodies this sort of rip off goes on unchecked daily.
The whole finance and banking sector requires root and branch reform in my view. And the current reforms are fundamentally inadequate.
As a previous responder said, this ensures penury for the individual involved.
Unfortunately many buyers, particularly young buyers, are so desperate to get the item that common sense and any probity is forgotten, They want it and they want it now! Finance houses capitalise on this weakness.
I find the prices demanded by dealers generally laughable which is why I always look for a private low mileage car. And the rates charges.
I just cannot see this merry go round continuing. Cars are grossly overpriced in the UK and as the economic downturn develops prices are bound to fall.
Lesson for us all really I think the Banking and Finance industry are dragging us all into disaster. This sort of rip off should not be allowed.
The whole finance and banking sector requires root and branch reform in my view. And the current reforms are fundamentally inadequate.
As a previous responder said, this ensures penury for the individual involved.
Unfortunately many buyers, particularly young buyers, are so desperate to get the item that common sense and any probity is forgotten, They want it and they want it now! Finance houses capitalise on this weakness.
I find the prices demanded by dealers generally laughable which is why I always look for a private low mileage car. And the rates charges.
I just cannot see this merry go round continuing. Cars are grossly overpriced in the UK and as the economic downturn develops prices are bound to fall.
Lesson for us all really I think the Banking and Finance industry are dragging us all into disaster. This sort of rip off should not be allowed.
Steffan said:
Unfortunately many buyers, particularly young buyers, are so desperate to get the item that common sense and any probity is forgotten, They want it and they want it now! Finance houses capitalise on this weakness.
Once upon a time i was younger and dafter than I am now. I wanted a car, I had very little in the way of savings, I bought the car using finance from the dealership.
The monthly payment was affordable and I felt happy with it, the term was 48 months, the total payable was nigh on twice the cars sticker price.
I still went ahead with the deal, because being young and excited I didn't read the contract properly until about a year later.
I learned a valueable lesson from that. But the information was given to me, I chose not to read it and understand it (or seek advice), I wasn't ripped off or taken advantage of I was stupid and in a rush to get something shiny.
I now can't bring myself to buy using finance, not because I am a wealthy snob but because I now look at the total payable first and consider is the car worth that figure to me.
Chrisw666 said:
Once upon a time i was younger and dafter than I am now.
I wanted a car, I had very little in the way of savings, I bought the car using finance from the dealership.
The monthly payment was affordable and I felt happy with it, the term was 48 months, the total payable was nigh on twice the cars sticker price.
I still went ahead with the deal, because being young and excited I didn't read the contract properly until about a year later.
I learned a valueable lesson from that. But the information was given to me, I chose not to read it and understand it (or seek advice), I wasn't ripped off or taken advantage of I was stupid and in a rush to get something shiny.
I now can't bring myself to buy using finance, not because I am a wealthy snob but because I now look at the total payable first and consider is the car worth that figure to me.
Last time I financed a car the salesman kept trying to sell it on the monthly cost "because that's what's important isn't it sir". I had to persist in asking what the total interest payable was in any iteration he presented, and what was the APR (he kept quoting flat rates, is that allowable by the FSA?). I wanted a car, I had very little in the way of savings, I bought the car using finance from the dealership.
The monthly payment was affordable and I felt happy with it, the term was 48 months, the total payable was nigh on twice the cars sticker price.
I still went ahead with the deal, because being young and excited I didn't read the contract properly until about a year later.
I learned a valueable lesson from that. But the information was given to me, I chose not to read it and understand it (or seek advice), I wasn't ripped off or taken advantage of I was stupid and in a rush to get something shiny.
I now can't bring myself to buy using finance, not because I am a wealthy snob but because I now look at the total payable first and consider is the car worth that figure to me.
SSBB said:
Last time I financed a car the salesman kept trying to sell it on the monthly cost "because that's what's important isn't it sir". I had to persist in asking what the total interest payable was in any iteration he presented, and what was the APR (he kept quoting flat rates, is that allowable by the FSA?).
That's done here, too: "So, how much are you looking to pay per month for this car?" You'll have a lot of trouble getting actual information out of them.SSBB said:
Last time I financed a car the salesman kept trying to sell it on the monthly cost "because that's what's important isn't it sir". I had to persist in asking what the total interest payable was in any iteration he presented, and what was the APR (he kept quoting flat rates, is that allowable by the FSA?).
That is a sales technique and most salesmen are not the finance bod in a dealership so not all of them know the full details of what they are selling you. The point I was making is I had the paperwork before signing it, and I had a cooling off period to come back pull out. I didn't and was shafted, but the person at fault was me as simple maths would have allowed me to work out the total payable on the spot.
SSBB said:
Chrisw666 said:
Once upon a time i was younger and dafter than I am now.
I wanted a car, I had very little in the way of savings, I bought the car using finance from the dealership.
The monthly payment was affordable and I felt happy with it, the term was 48 months, the total payable was nigh on twice the cars sticker price.
I still went ahead with the deal, because being young and excited I didn't read the contract properly until about a year later.
I learned a valueable lesson from that. But the information was given to me, I chose not to read it and understand it (or seek advice), I wasn't ripped off or taken advantage of I was stupid and in a rush to get something shiny.
I now can't bring myself to buy using finance, not because I am a wealthy snob but because I now look at the total payable first and consider is the car worth that figure to me.
Last time I financed a car the salesman kept trying to sell it on the monthly cost "because that's what's important isn't it sir". I had to persist in asking what the total interest payable was in any iteration he presented, and what was the APR (he kept quoting flat rates, is that allowable by the FSA?). I wanted a car, I had very little in the way of savings, I bought the car using finance from the dealership.
The monthly payment was affordable and I felt happy with it, the term was 48 months, the total payable was nigh on twice the cars sticker price.
I still went ahead with the deal, because being young and excited I didn't read the contract properly until about a year later.
I learned a valueable lesson from that. But the information was given to me, I chose not to read it and understand it (or seek advice), I wasn't ripped off or taken advantage of I was stupid and in a rush to get something shiny.
I now can't bring myself to buy using finance, not because I am a wealthy snob but because I now look at the total payable first and consider is the car worth that figure to me.
Dealerships always work on flat rates, have you seen the equasion to work out an APR?
Also, they don't reflect much in reality, take for instance if you finance with one of our finance companies, they have a higher base rate, meaning you pay more interest on what you borrow, but don't charge an arrangement fee. The other one we use charges £300 in document fees, but has a base rate around 1.5% cheaper.
If you work out the APR for one against the other, it takes into account arrangement fees, so doesn't reflect the true cost of what you're borrowing IMO.
Lesson of this is to always read the paperwork and question it.
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