Buyer beware

Attention car buyers. Do not shop for a new car at North Central Honda. Here is the skinny on the scam they pulled on my sister in law and her husband recently.

Sister in law is expecting (twins) and they need to get a bigger car. Her husband takes his Honda Accord to the place he originally bought it (North Central Honda) to trade in for a Honda SUV (I forget the name – the one with 3 rows). The salesman and husband agree on price, trade in value, line up financing and it ends up being a deal at $500 month. They take his trade in keys, hand him the new keys and it’s a “done” deal.

One week later, husband gets a call from finance guy saying the deal fell through and the payment was going to go up to $680! “Unacceptable” says husband and says he thought they had a deal. After all, the credit manager had him fill out a credit application, and was told it was approved with x terms. Credit manager said, “let me see what I can do and I will call you back”. Doesn’t call back. Husband calls him back and plays phone tag for a few days. Credit manager calls and said, “I got it down to $550 and with a shorter term, lets meet Friday night and you can sign the papers.” Husband goes Friday night to meet (some location, not the dealership) and the guy no shows. Husband finally reaches him the next day and finance guy said something came up, etc, etc. Husband now wants his car back and goes back to the dealership to turn back the new car and get his old car. Of course, sister in law and husband are now late on their car payment because they thought they were going to trade it in. They have also already switched over insurance…but enough is enough and they want their car back.

Guess what, their trade in is “locked up somewhere” and they “can’t get it right now, but if they will hang tight a little longer they will get a deal worked”. They talk with their original salesman who they liked and who was surprised that their initial $500 deal was dead. He pretended (or could have been sincere) that he had no idea. Another few days pass and they get a call saying it’s a done deal at $560 month, which they take. If it were me, I say hell no and demand my car back and go somewhere else. But they were so beaten down by this they gave in - even if it cost them $60 more than they thought.

There are a few lessons to learn here. After hearing this and reading about stuff like this on-line, it turns out this is a common “yo-yo” scam pulled by many dealers – mostly on people with bad to average credit who often fall for this since they think they can’t get anything better (and who ironically enough, can usually least afford the higher payments that come with the scam). Lesson #1, arrange your financing ahead of time with your bank. That way you buy a car based on negotiating the price of the car and that’s it. Forget about them jacking you on rate, term, etc. Unless, you’re a savvy buyer and the dealer’s lender is offering major rebates by financing with them, don’t do it! Lesson #2, no matter how much you like that car – NEVER drive it off the lot until the financing has been approved (no “spot delivery”). You can solve this problem by following step #1.

This is a scam people. The finance guy knows within 15 minutes of running the application if the financing will go through. Financial institutions have this down to a science as to whom they will finance and whom they wont. The dealer knows that Joe Buyer with a 600 credit score aint getting the car for 72 months at 6% interest! But, if he lets Joe Buyer drive the car for a couple of weeks and get attached to it, well, that makes the new deal at 60 months and 13% interest a little easier to take. Car finance people are running a close second to tow truck drivers for me. I’m sure there are honest people in both professions, but I haven’t found one yet!