Interest rate

[okie02]

Washington.
Two weeks ago I purchased a new car from a dealer. We agreed on a price, got an interest rate qoute from the bank, filled out and signed the "Retail Installment Sale Contract, Simple Finance Charge" contract and I went on my way. This weekend I got a call from the finance person at the dealership saying that the bank made a mistake on the interest rate qoute and it should be one percentage point higher. (The rate on the contract is %5.80 and the bank says it should be %6.80). They want me to come in and sign a revised contact. I don't think I should. What are my obligations here?

 

[racer72]

Sign the new contract or turn the vehicle back in. All loan contracts signed at dealers always stipulate that the interest rate quoted can and may be revised. You signed a loan offer at the dealer, it is not valid till accepted by the creditor. This actually happens quite often.

 

[Thomas234]

My advice may be late, but it may still help others. I had a similar situation about a year ago when I bought a new car. Agreed on 2.9% financing, signed a contract, and drove away with my car thinking to myself, "wow, that was just to easy."

Well it was. About 10 days after I bought the car, the succubus (finance manager) calls me to inform me that the 2.9% rate was not valid on the day I bought the car. It had apparently be cancelled retroactively! She wanted me to return the next day and sign a new contract for 5.9%!

I told her that this was the most ridiculous thing I had ever heard, and that I would not be returning, and that she should call me back when she works out HER financing dilemma. What racer72 told you is absolutely correct. Sign new papers, or return the car. But there is a third option... do not give in, make the biggest scene and cause them as much grief as you can.

I discovered that this is what's called spot-delivery-scam. They give you a contract, which in reality they don't have to honor until they assign financing, and tell you to drive off with your car. Once you do, technically you are stuck. But it's up to them the amount of effort they put forth to "assign" the financing.

The Finanace Manager knew in advance she should not have given me this rate. I know this because she was stupid enough to fax me an internal memo from their vice-president of marketing cancelling this special rate... it was dated two days before she sold me the car. Nevertheless she knew I wouldn't buy the car but for this interest rate. Due to her own greed, she figured, "ah what the hell, tell the guy it's this 2.9% rate, then screw him over later."

Anyway, to make a long story short (yeah I know, too late) after bantering back and forth with the succubus for about a week, I sent the manager of the entire dealership group a letter informing him of the situation. I also told him that if they did not honor the contract within 7 days I would take my issue to the FTC, Attorney General, BBB, and the media.

Much to my surprise I got a call at 7pm on day seven. Apologies all around! "Of course we will honor the contract, please forgive this misunderstanding, we'll eat the difference." What happened in the end is this: I got the car at 2.9%, the dealership had to finance it at some higher rate, but they are the ones who had to pay the difference.

Hope to God this helps someone else out there...

 

[okie02]

Thanks for the heads up. I spoke with an attorney several weeks ago and he suggested pretty much the same thing. So far I haven't done anything and haven't heard anything from the dealership. The bank has already sent me my first payment statement with the original amount due so I guess the matter is closed. I will take it to the Attorney General though if they persist. Thanks.

 

[Thomas234]

GREAT! Maybe double-check with the attorney, but my understanding is once you get your payment book or billing first invoice, that means the financing is done. So long as you never signed the new contract at the higher rate you should be fine.

But... just because I'm paranoid doesn't mean they ARE NOT out to get me! I took my issue on final step further. I called and got a copy of my contract from the finance people to make sure that the dealership didn't alter it in any way shape or form.

In other words, and this is probably a little paranoid, this way I made sure that just because my payment was what it should be that the dealership didn't do any other "creative" accounting. So my payment stayed the same did they still increase the interest rate, AND change the length of the contract from 48 months to say like 60 months to keep the $$$ payment the same.

If you do request a copy of the contract, you may have to wait until after they receive your first payment. I did... don't really know why. But if you do this, it's just an extra way to assure yourself that all is well.

Good for you! I guess most people must just roll-over and say "okay I'll be in to sign the new contract." Otherwise these people wouldn't try and do this. Even if the dealership/bank made an honest mistake... what would they have said if you came back a week or two after you bought the car and said, "I think I made a mistake and paid too much for this car, can we sign a new contract at a lower price?"

They wouldn't say anything... they would explode in laughter.

Best wishes!!!