| MoogieBoogie |
Hi everyone.
For a few months, I was in the market for a SUV or a vehicle with 4WD/AWD capabilities so that I can get around on snowy days. I was initially looking to spend around $25k, but maximum of $30k. So I was looking seriously at the Toyota Highlander V6 4WD and the Subaru WRX or Legacy models. Then I saw a Honda Pilot on the road, so decided to test-drive that. I liked it, but the wait was about three months. I couldn't wait, since by then the winter would be over, so I was set on getting the Highlander. Then out of curiousity, I walked into the local Acura dealership to look at the MDX on November 29, 2002. I inquired about the MDX (non-touring model) and took a test-drive in a touring model. I like it, and the dealer told me that they had two in stock: one that I test drove (white/saddle) and another that someone cancelled (light blue/black). Both were touring models and had accessories on them. I was looking at $40k+. It was more than I was planning to spend, but I worked out a decent deal on the light blue one and took it home the same day (November 29).
I decided to finance $30k of the total purchase price of the car. I put in the finance application and it came back with an APR of 6.49% through Chase. I was somewhat surprised that the rate was high since I have superb credit. They told me that even if they got the rate down, it would be a one point difference which wouldn't make a big difference. I then asked my sales person if they had any special rates through Honda Finance. The salesperson said no. So I went ahead, signed the papers, and drove it home the same day.
After about two weeks of ownership (a bit less maybe) I stumbled upon this forum and found out that Acura had a promotion of 3.99% through Honda Finance until December 2. My purchase was made within the promotional period. As soon as I had a chance after Christmas (Dec 26), I went back to the dealership and asked the salesperson why he didn't give me the special rate financing. He said he didn't know about it and would find out if they had a promotion and such from the finance manager and get back to me. After waiting almost a week, I returned to the dealership, waited for him for about an hour, and he told me he was too busy to look into it. So I returned a few days later and had the same response. On the fourth time I returned the dealership (January 16) he wasn't available so I spoked to the finance manager directly.
I wasn't surprised to hear from the finance manager that the salesperson did not mention this to him at all. The finance manager told me that he would look into the matter, by calling Acura and Chase to see what he can do. I returned the next day to find that there was nothing he could do since the first payment was already made. Honda Finance would not refinance the loan.
I spoke to the sales manager and he said he would look into the matter and give me a call the next morning. He never did. I plan to call him tomorrow, since the dealership was closed for the holiday.
My question is (sorry for the long rant / story) - what are my options? There is no feeling worse than feeling cheated - and that's how I feel right now. I feel that since they did give me a small discount on the MDX, they made up for it with the commission they received on the loan through Chase. Chase pays a high commission rate. Honda Finance pays almost nothing. I also found out that they didn't even bother running a credit check or anything - the loan was granted instantly because of the large down payment made. The dealership added one point to the rate that they received to give me my rate of 6.49%.
What are my options? Do you think it would be helpful to contact Acura Client Services? Up to this point, I have tried to resolve the problem within the dealership without results. I'm extremely upset. If the dealership offers freebies to somewhat rectify this situation, what should I even ask for? Never have I felt so cheated before.
Thanks for any suggestions and your time in reading this.
-Brian. |
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| renov8r |
Not too many options, from what I see, about your choice is to somehow REFINANCE.
If you have a CREDIT UNION you MIGHT be able to get a rate in the low fives/high FOURS from that source.
Similary, if you have access to a Home Equity loan/line of credit, that should have a 'teaser rate' lower than 4% , for at least 6 months.
I ran those loans through Excel, and you won't be saving much(under $400) on a four year deal (even less on a three year), at least you won't feel screwed... |
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| storwatch |
| I was little lucky. I got 3.49% for Honda. Thanks to the people in this forum post this special deal. Otherwise I would get 4.5% from Chase. I think you can try to refinance! Somehow, my finance manager told me that don't mention this special rate to the salesman when I pick up my car. I don't know what that mean. Maybe the dealer will get some % back from the bank if they finance from that bank. Good Luck! |
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| MoogieBoogie |
Thanks for the response guys.
I know that the dealership basically buys the loan from the bank, and tack on as many points as they want (to the state limit) to increase the amount of commission they receive from the bank. They tacked on 1 point in my case, bringing their commission to about $800. Honda Finance would give them about $100 for the special rate.
Refinancing won't save me too much, but with the 3.99% rate, I would save about $1800 over five years. Unfortunately I dont have a credit union and the only lower-rate bank I know of is PeopleFirst.
Thanks again,
-Brian. |
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| dbehrens |
quote:
Originally posted by MoogieBoogie
Thanks for the response guys.
I know that the dealership basically buys the loan from the bank, and tack on as many points as they want (to the state limit) to increase the amount of commission they receive from the bank. They tacked on 1 point in my case, bringing their commission to about $800. Honda Finance would give them about $100 for the special rate.
Refinancing won't save me too much, but with the 3.99% rate, I would save about $1800 over five years. Unfortunately I dont have a credit union and the only lower-rate bank I know of is PeopleFirst.
Thanks again,
-Brian.
This is a good reason to have shopped for your financing before going to the dealer. People first was at 4.99 and I showed the dealer what they have to beat to get my financing business and they came up with 4.69. This way they can't bump the rate.
I also understand you don't expect the dealership to lie to you about what rates are available.
Sorry to say you are most likely stuck with that loan. A creative way to reduce your interest rate is to pay the loan off early. An extra 100 to 200 per month and you will pay off the loan closer to 3years instead of 5y reducing you effective interest rate. Another creative solution is to call chase directly and tell them you are considering refinancing at 5-5.5% unless they lower the rate. Good Luck |
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| zubinh |
Moogie-
Yes you should try to refinance no matter what. I think if the loan is paid off in a certain amount of time, then chase will hold back on the fat commission they made.
Best thing for you to do is get a home equity loan in the amount of your auto loan. Your rate will be fixed AND unlike the car loan will be tax deductible.
It costs you absolutely NOTHING to establish a home quity loan. Give Citibank or Chase a call.
Next time you go to buy a car, remember to print out auto loan rates from bankrate.com before you sign on the dotted line. I think you got so excited about getting the car you rushed into a bad deal.
Good Luck
ZubinH@aol.com |
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| MoogieBoogie |
Thanks everyone for their replies. I really appreciate your concern and thoughtfulness.
If things dont work out with the dealership, I will be sure to post up the dealer and the name of the salesperson there.
Thanks again,
-Brian. |
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