Posted on 02/01/2009 5:53:51 PM PST by Red in Blue PA
SACRAMENTO, Calif. – The national wave of auto dealership closures has come crashing down on thousands of people who are on the hook for used-car loans that dealers were supposed to absolve.
When a car buyer still owes money on a vehicle he is trading in, the dealer promises to pay off the outstanding loan, then resells the vehicle. But as more dealers go out of business, some are sticking consumers with the bill. Lenders can then go after the previous owner who thought the debt was paid, or repossess the car from the new owner who assumed it came with clear title.
"It's devastating for people when it happens because they have two car payments and they can't afford them," said Rosemary Shahan, president of Consumers for Auto Reliability and Safety, a Sacramento-based nonprofit that lobbies on behalf of vehicle owners. "Their credit is destroyed for no fault of their own because the dealer defaulted."
(Excerpt) Read more at news.yahoo.com ...
Does anyone know if Edmunds, NADA, and Kelly are really accurate these days?
I'm about to do some abrogating of my very own.
L
Wonderin’ how long it would be before somebody caught that... Car Dealers do not = Banks.
Business etiquette is out the window today.....and individuals are always the ones screwed.
No banks aren’t car dealers. But then car dealers aren’t really the ones giving the loan. They are merely brokering the loan in most cases. Thats why they don’t care if you can really afford the car. Because they get their money right up front.
If you have a problem with the way the banks are being run these days, complain to your congresscritter.
Yep its individuals that are screwed and the corrupt go on.
In this instance, Sun Tzu's Art of War advises one to become a Democrat Senator or Cabinet member, thus neutralizing the threat from the IRS...
Well, Zero promised to pay comsumers’ mortgages and gasoline bills surely he can pay off their car loans also.
Yup. I am a banker.
I work for one of the many independent community banks that refused to accept TARP funds due to control issues, thereby placing us at a competitive disadvantage.
I also had to take my mandatory refresher course on the Community Reinvestment Act last week (which is still being enforced), which started this meltdown.
It sucks to be me.
Obviously, you have never heard of the Hull-Dobbs Sales method.
The Hull-Dobbs method is widely known in the business as “The System” or “The Drill”. It involves using a greeter to feel the customer out, to “qualify” the customer. The greeter then turns the customer over to a salesperson, who usually has no authority to discuss the terms of the sale.
The inital salesperson then turns the customer over to a salesperson who does have authority to discuss the terms and is allowed to “close” the deal, usually at maximum gross price. If real pressure is needed, the customer might then be turned over to the sales manager, often misidentified as a “dealer”. And when the car selling is done, including having someone, usually a woman, sell the add-ons, such as “protection packages” or “dealer options”, the buyer is then turned over to the “F&I” people, otherwise known as finance and insurance.
Something strange then happens in F&I under “The System”. The agreed-on price suddenly becomes stratospherically higher. Some of this is from extended warranties and finance charges. The F&I person watches the buyer hit the ceiling, then “peels him off the wall” with a lower price that is still higher than the agreed-upon price. This whole process can last a full working day, exhausting the customer.
And how does the customer view the dealership at this point? Words like “sleaze, crook and shyster” come easily and at one breath. Every salesman is doing high-fives in the showroom and the customer is lying prostrate in the street. Then the dealership sends the customer a card and asks how they liked the treatment he received during the sale. Sure. He has just been sent through Hell, how was the trip? Like he ever wants to go back again. Not in this lifetime, and not to that dealer.
Another strange thing has happened in recent months, and that is the utter collapse of a number of financing options for the prospective buyer. One is that those buyers who are “upside down”, owe more on the vehicle than the trade-in is worth, are finagled into paying MORE for the prospective purchase than the original asking price. At this point, the buyer is likely to have a momentary return of common sense, and the best thing is to RUN, not walk, out the front door. But no, the negotiator for the dealership, the sales manager, is willing to back down if the buyer is willing to sign just one more little piece of paper, which effectively keeps the lien on the trade-in HIS responsibility. In the flurry of signatures, this one often gets through, and the trap is sprung.
Go ahead, chew off the leg. It’s your only chance of ever recovering.
ping
I thought the story was about the car dealers taking advantage of the folks trading in their cars. It seems like most of the posts are blaming the banks for what the car dealers are doing.
I don’t see how it’s at all related to this story, no matter where the loan is brokered.
No, thanks. The congresscritters are operated by the bankers and their free traitors, whose families are quite intertwined with the various government offices and ruined schools and universities.
I’ll just continue to refuse to buy and watch them fall. They’re getting to be too interbred. We’re about to see better and more pro-American new blood in business and government in the years to come. We need more tax cuts and much more government spending for a general default. Like putting lots of strong chemical in a toilet and flushing it, it would be a cleansing experience for us all.
The dealers sell and service the automobiles.
The banks do everything else.
How hard do you have to try to get it completely backwards?
Thanks for the inside scoop, there. It seems everyone is buying into the liberal ideaology of blaming whoever is at the top of a given thing. It’s like they forget there are people in the banking industry... neighbors, friends, family all trying to do a job.
I hate it when I see conservatives acting like liberals and that’s what most on this post sound like tonight. I’m not trying to pick a fight, I just wish we’d think about how we sound before we start typing sometimes. It does actually matter what the story is about. If anyone should be demonized in this story it’s the unscrupulous car dealers who are determined to take everyone else down with their ship.
If you screwed up and made bad investments, be men and take it. You can always lift yourself up tomorrow and start over.
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