Auto Financing collusion? - Page 4 - Mercedes-Benz Forum

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post #31 of 63 (permalink) Old 05-25-2008, 04:56 PM
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Originally Posted by QBNCGAR View Post
As much as I hate to agree with Jayhawk, well, I won't.

What I will say is this...if you have a relationship with a bank, you're generally able to talk to them about getting pre-approval for an auto purchase. They'll tell you what the rate will be, and how much they'll lend. You can take that to any dealer or private party (unless something has changed very recently, which it might have if my recent experience with rental property financing is any guide).

If a dealership has a relationship with a particular pair of lenders, they may be able to offer you a better deal. Take it or leave it.

If you have the equity, I for one don't see any problem with using it to finance a car - if you can afford the payments over a 60 month term. In other words, don't buy a Bentley if they only way you can afford it is amortized over 30 years. The interest on that loan is tax deductible, meaning you get a 28% - 40+% discount on the money (depending on your income bracket). Plus, if the shit hits the fan, you can revert to the minimum monthly payment. Far cheaper way to finance a car.

Creditworthy people will have no problems buying cars. People who aren't creditworthy are the LAST ONES who should be buying on credit. They should save their pennies and pay cash, period. Truth be told, we all should. If, like Shane said, you can get free money, you can make an exception to the rule.
Thank you for not agreeing w/ me...

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post #32 of 63 (permalink) Old 05-25-2008, 05:01 PM
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Originally Posted by Ears View Post
Hypothetical situation:

Your friend has a 2006 s500 he wants to sell. he prices it to you at xxk. You need 1/4 of the total as a loan to secure deal. What you will find is, your only avenue for financing is personal loan, equity loan, or loan shark! Why did the lending institutions remove a product, an auto loan to pay a private individual, from the choices? There has got to be a reason, and risk, or tight money market, etc is not the answer. Why does a lending institution care anyway? The loan will not be underwritten if the vehicle cannot stand on its merits, nor the lenders' credit score justify the risk.

No, the situation here is, I believe, one of back-room agreements between parties to control and limit the markets to the unfair benefit of those same parties... Lets close some avenues, and buyers will have to deal with franchised dealers only... the available market for your friend to sell that s500 just got whacked a bit... He'll still sell; probably. However, another freedom dies quietly in the night without a whimper from the masses...

It just chaffs my ass that the financial institutions and the auto dealers' consortium have won one here... and this is just the start. Give 'em an inch, and they'll end up owning the mile before it is over, and charge you to drive on it!
What do you expect the loan institution to do in order to ascertain that the object of the loan provides adequate equity to serve as collateral? I'm sure you'll agree that is far more problematic when dealing with private individuals rather than an authorized auto dealer.

"If spending money you don't have is the height of stupidity, borrowing money to give it away is the height of insanity." -- anon
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post #33 of 63 (permalink) Old 05-25-2008, 05:04 PM
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Originally Posted by Ears View Post
Hypothetical situation:

Your friend has a 2006 s500 he wants to sell. he prices it to you at xxk. You need 1/4 of the total as a loan to secure deal. What you will find is, your only avenue for financing is personal loan, equity loan, or loan shark! Why did the lending institutions remove a product, an auto loan to pay a private individual, from the choices? There has got to be a reason, and risk, or tight money market, etc is not the answer. Why does a lending institution care anyway? The loan will not be underwritten if the vehicle cannot stand on its merits, nor the lenders' credit score justify the risk.

No, the situation here is, I believe, one of back-room agreements between parties to control and limit the markets to the unfair benefit of those same parties... Lets close some avenues, and buyers will have to deal with franchised dealers only... the available market for your friend to sell that s500 just got whacked a bit... He'll still sell; probably. However, another freedom dies quietly in the night without a whimper from the masses...

It just chaffs my ass that the financial institutions and the auto dealers' consortium have won one here... and this is just the start. Give 'em an inch, and they'll end up owning the mile before it is over, and charge you to drive on it!
There are "loan sharks," but nothing you have described suggests to me that you are dealing w/ one. Get out of the "back-room" mentality and get a grip. I know you, and many here, want to blame the "big boys," but they are not your enemy. In the long run, they are your friend!

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post #34 of 63 (permalink) Old 05-25-2008, 05:05 PM Thread Starter
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One last note:

This line of thinking all started because I was researching rates on used auto loans. when both my personal bank, and the bank of my business accounts had deleted the option of a used auto loan for private pay, I then turned the research project into a fact-finding mission. 2 other major banks were the same, and so were three independant finance companies...

Kinda strange this seems so wide-spread/universal. Only one group did tell me that they pulled the product in mid-april...

I would be interested if any one else has discovered similar conditions...

Oh... and money is still relatively easy to get to. Each Bank was very quick to offer a HELOC...

I think I want to research home loans now for kicks!

RM Smith www.rmsmithco.com

Where is it again that we are going... And why are we in a handbasket?
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post #35 of 63 (permalink) Old 05-25-2008, 05:08 PM Thread Starter
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Originally Posted by GermanStar View Post
What do you expect the loan institution to do in order to ascertain that the object of the loan provides adequate equity to serve as collateral? I'm sure you'll agree that is far more problematic when dealing with private individuals rather than an authorized auto dealer.
I see no difference, because we are talking about used cars, not new. Car "A"'s value is impacted little, whether bought from a private individual or a dealer's lot. Hell, a dealer is not gonna spend one dime that is not necessary, nor will he provide a warranty of any kind unless he is gonna benefit from it.

What's the difference?

RM Smith www.rmsmithco.com

Where is it again that we are going... And why are we in a handbasket?
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post #36 of 63 (permalink) Old 05-25-2008, 05:11 PM
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Originally Posted by Ears View Post
One last note:

This line of thinking all started because I was researching rates on used auto loans. when both my personal bank, and the bank of my business accounts had deleted the option of a used auto loan for private pay, I then turned the research project into a fact-finding mission. 2 other major banks were the same, and so were three independant finance companies...

Kinda strange this seems so wide-spread/universal. Only one group did tell me that they pulled the product in mid-april...

I would be interested if any one else has discovered similar conditions...

Oh... and money is still relatively easy to get to. Each Bank was very quick to offer a HELOC...

I think I want to research home loans now for kicks!
Please review Post # 12...

Don't believe everything you think
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post #37 of 63 (permalink) Old 05-25-2008, 05:12 PM Thread Starter
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Originally Posted by Jayhawk View Post
There are "loan sharks," but nothing you have described suggests to me that you are dealing w/ one. Get out of the "back-room" mentality and get a grip. I know you, and many here, want to blame the "big boys," but they are not your enemy. In the long run, they are your friend!

Jayhawk,

I'm not dealing with anything here... Just reporting my findings from doing a bit of research and being surprised from my findings.

RM Smith www.rmsmithco.com

Where is it again that we are going... And why are we in a handbasket?
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post #38 of 63 (permalink) Old 05-25-2008, 05:17 PM
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Originally Posted by Ears View Post
I see no difference, because we are talking about used cars, not new. Car "A"'s value is impacted little, whether bought from a private individual or a dealer's lot. Hell, a dealer is not gonna spend one dime that is not necessary, nor will he provide a warranty of any kind unless he is gonna benefit from it.

What's the difference?
For one thing, I would expect that the loan institution trusts the dealer (via contract) to provide an accurate evaluation of the vehicle for equity purposes, and that the lending institution would therefore not have to incur the fee of a professional in order to provide this service.

"If spending money you don't have is the height of stupidity, borrowing money to give it away is the height of insanity." -- anon
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post #39 of 63 (permalink) Old 05-25-2008, 05:21 PM
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I am out of my element here, but I have a little to say. A good relationship with a bank is important, which I have a good one with my bank. But also people should do a lot of research on buying the car they want, 4 years ago I wanted a clk 320 black. The dealer "James Motors" in Lex. KY wanted $38,000 for a 2 year old clk, I did my research and found a 2002 clk 320 with 60,000 miles from a wholesaler and bought it for $21,000 and he gave me $12,000 for my 98 clk so I only owed $9,000 difference which the bank loaned me with no collateral. Because I pay my bills and have excellent credit.
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post #40 of 63 (permalink) Old 05-25-2008, 05:21 PM
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Jayhawk,

I'm not dealing with anything here... Just reporting my findings from doing a bit of research and being surprised from my findings.
Ears,

It seems to me that you are looking for boogymen. Deal w/ it! And get over it! Before it makes you crazy...

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