Memphis_HHR

It's been almost a year since I bought my 07 HHR. I decided to refinance at a lower interest rate and got a good deal from another institution. Meanwhile, I find out that I had been financed through a local bank and NOT told about them charging a 2% prepayment penalty on the loan if paid off early.
Noone in their right mind would "knowingly" sign such an agreement. I went ahead and paid the penalty just to get it changed over to the new source. I notified the Better Business Bureau about the dealer's shady tactics by NOT telling me about that fine print on the contract so, I challenged their integrity with a complaint. The dealership recently changed hands yet I was notified that the complaint was received and they were checking into it. After speaking to the CEO of the prior owner, I received a check today amounting to that 2% difference. I notified the BBB that we had reached an agreement and settled.
What happened to "integrity" with sales people at some of these dealerships? Yeah, I know, I should have read the contract blah blah blah, but there was a time when you could actually sign your name, shake hands, and everyone was happy. Now it seems it's just a "make the sale at all costs" type of game. I learned my lesson, and I think the dealership did also.

hhrcrafty

I hate to say it, but there has to be some kind of personal responsibility on your part as well. You're signing documents stating that you will pay a certain amount of money to borrow money for a vehicle that you cannot pay cash for. Those probably merit more than a cursory glance, initial on each page, and signature. No car is worth not reading what you're signing.

Loans that are designed to give a lower interest rate, longer term, or both often have prepayment penalties, especially if the borrower has fair to poor credit. The bank is in business to make money and when you pay the note off early they're losing a LOT of money. The dealership also makes money depending on where you borrow from. The best position to have at the lot is the finance/insurance manager. Those guys usually make more money on the financing commission than your salesperson did on the car. True, they're going to get you the payment you want, but there's going to be some strings attached. That's just common sense!

Memphis_HHR

My credit is excellent. The dealership bit the bullet on this one. They deceived myself and others by the way they NOT tell customers what the full deal will be on the sale. That's poor business no matter how you look at it. I do not and would not do my customers that way and I am a lighting wholesaler. Common sense was thrown out the window on this one and the dealership lost their case. If you want a position as finance/insurance manager just so you can cheat people out of money just to keep you business alive, then your integrity as a person is very low. I got my money back in either case and I could care less what the finance/insurance manager made on the deal. He is left with a black mark on his name for his low down tactics. End of story........

SandyBeach

Wow! I've only seen an early payoff penalty on teaser rate home loans. Would you still have had to pay it if the car were totalled?

Since that's not in most standard loan agreements, I believe the dealer should have pointed it out to you. I would have put a down payment on the car so they couldn't sell it then headed to the nearest credit union for a decent loan. Glad everything worked out for you!

Memphis_HHR

In Tennessee, after researching, it is legal for financial institutions to have prepayment penalties for whatever loans they provide. This particular "Independent Bank" is one of those places. What really got me also was when I went in to do the payoff, I had to deal with the regular teller. I'm thinking at this point, "I am fixing to write a $20,000 check to a bank teller who has no idea how to handle the paperwork" - after she made 5 calls upstairs, she finally took the payment and paperwork to transfer the title etc. This bank didnt even have enough customer service to come downstairs and deal with me on a personal basis. I sent them a nasty email also that I'd never step foot in their place again either.

PinkChick

I guess I got lucky when I bought mine. They want to make the sales so bad up here they offer 5 or 6 year loans with no money down and NO interest. If I had bought the Cobalt it would have been a 6 yr loan. They only had the 5 year one on my HHR. Oh well, I'm lucky enough to work somewhere that gives a hefty bonus every year so I just bank the money for my payments, make a bit of interest and technically get a car for free.

Gotta love it.

hhrcrafty

I'm still trying to figure out how you were deceived. I understand that the dealership rebated you for the prepayment penalty, which in my mind is excellent customer service, but the fact that you didn't even read the finance contract seems incredible to me. One of the red flags that was sent up was the fact that they're trying to finance a new car with a local bank you knew nothing about. Why aren't you asking them why they're doing that? Why aren't you asking them about the terms of the loan? Did you read ANY of the paperwork you're signing when you purchased the car?

That's great that you'd never cheat your customers, but I'm still trying to figure out how the dealership cheated YOU. Sounds like they probably coughed up a chunk of profit on a car that was sold BEFORE they bought out the franchise and lost money on a mutual oversight.

PinkChick

Up here, such contracts often have a spot where the buyer must initial that the information was disclosed to him.

Memphis_HHR

No, I did not read the contract which is why I didnt file a complaint with the bank. Yes, it was my fault for not reading it. At the time, I was told that this particular bank offered the best interest rate and payments. And as far as the dealerships customer service being great, that was from the previous owner and not the ones that are still there. I got a check back from him via the Saturn dealership that he now runs. When you go to sign the papers to finance, the financial manager should go over EVERY detail of the financing with you before you sign to make sure you understand everything. I have a copy of the contract and it takes a magnifying glass to read the fine print about the penalties. Trust me, when I called and spoke with the financial manager, he flat told me that I should have read the paperwork. That's when I told him that his work ethics should have taken time to go over every bit of the sales and financing with me. Since he chose to be an A-hole about it, I pursued the matter through other options. Perhaps the dealership themselves didnt know that the bank was doing this. Who knows? I guarantee, they know now and wouldnt be surprised if they dropped that bank for financing anyone. If not and they are still doing this to others, it is deception on their part period!!

Memphis_HHR

The line on this contract is so fine, there's not enough room for initials....