Jim Burke Automotive,Inc. Despicable, Underhanded Dealership Tricks Damage Consumers Birmingham Alabama

I started out writing this out of anger – hopefully, by the end of this letter, you will understand why. Now, however, I realize that this is best as a cautionary tale. For anyone interested in buying a vehicle, I IMPLORE you to read this and consider carefully what could happen to you.

I am a 22 year old graduate student. Specifically, I am a doctoral student at UAB. I moved from my home state, and have never owned a car before. My apartment is about two miles from campus, so I had to walk that every day. It’s a good, long, tiring walk filled with steep hills and dangerous areas. It had me getting up at 6am every morning to make it to my 8am class. But I was determined to make it to my classes, to earn my degree.

My family is not particularly well off. My parents are both disabled. They survive off of less than $1500 a month.  With financial aid and a gratuitous amount of merit-based scholarships, I put myself through four years of one of the best private colleges in the state of Mississippi. Each semester, though, I worked so many hours in any lab I could to earn enough to keep myself clothed, fed, and healthy. On a good week, I clocked in around 20 hours of work in labs, which, combined with a full time student schedule of 18 semester hours, was rather difficult. I maintained an extremely high GPA throughout the entire time, though – a testament to my dedication, I like to think. So when I was accepted to UAB on a stipend and tuition-covered scholarship, I was ecstatic! All my hard work had paid off, and I couldn’t believe my luck.

Fast-forward about five months. I’ve recently moved to Birmingham and am starting to realize that despite my apartment’s “closeness” to campus, it’s not a safe or doable walk. Right at the end of August, I received my first stipend paycheck, as well as my financial aid from a scholarship committee that supported me from my undergraduate career. I suddenly had enough money to actually afford a car! I wasn’t foolish – I was a dreamer, but I wasn’t foolish. I knew a new car would be unlikely, so I was okay with a used car. My only requirements was that it had relatively low mileage and a good mpg rating. I wasn’t looking for a new Porsche with fully customized interior. I would happily settle for a simple 2010 Toyota with the bare minimums.

My first attempt was at Adamson Ford. I saw on their website that they had a Ford Mustang well in my price range. I was extremely excited – it was my dream car, really. I didn’t particularly care for the color, but who cared? It was a Mustang that I could easily afford on my budget! So, I go in and they start the financing paperwork. They tried, I believe, four banks. All four banks reviewed me and decided that because my “employment” was a Graduate Student at UAB, I was “unemployed” even though I had a contract stipulating my monthly and annual salary, proof of employment, employment identification, and a paystub for my first paycheck. I was crushed, and had to walk off of the lot. They could not guarantee my approval for my financing, so I wasn’t allowed to drive off the lot in a Mustang – new or used.

So, I shopped around a little more and ran into the cause of all my emotional trauma. Jim Burke Automotive Group. I applied online with all my information, and the next day, received a call from one of their sales persons. I came in that day. I explained the situation with the last dealership, and how the banks wouldn’t approve me because of my employment type. The salesman told me “We don’t care what the other people did, we’re going to put you in a car.” I believed him.

Jim Burke did put me in a car. A really nice car. It was used, yes. It had about 30k miles on it. Sure, the USB jack didn’t work, but the car was still really, really nice. And for right at $400 a month for 72 months, I considered myself lucky that I was driving it. And I was lucky. I drove that car for right at a month. It was a good ride, smooth, a little slow on acceleration, and the breaks were jerky, but it was a good ride once it got going. After signing all the paperwork, including one form I was told “doesn’t really apply because you already have financing”, I drove off the lot in my NEW (used) car. I put down $2000 on the car, as well as the $158 for insurance. Two or three days later, I spent six hours in the Bessmer courthouse doing vehicle registration. I put about $300 in gas in the car over the time I “owned” it.

On September 25,  a few days shy of my one month “ownership” of this vehicle, I got a call from the salesman that I, at first, didn’t think was even possible. He told me that the bank they had “pre-approved” me with – this was the first time I had heard the term “pre-approved”, it had always been “they’ve approved you for X amount of money in financing, so we just have to find you a car that fits in that budget” – wasn’t satisfied with my employment. I had to send documents proving my employment and income. Well, I provided everything my employer – UAB – could give me. I even had the man responsible for my paychecks DIRECTLY call and explain everything to the salesman. But the bank wouldn’t finance me, and I had to bring the car back. After a month of rather expensive investments into this vehicle, it wasn’t mine.

I did research into what happened to me. Surely this couldn’t be legal, right? Them repossessing the vehicle before I made the first payment? I hadn’t defaulted on anything. I had provided as much proof of my employment as possible. That’s when I learned about what has been described as one of the most underhanded dealership  actions. It has several names, but you can easily find as much information as you’d ever want from it with a quick web search of “dealership yo-yoing”. Just like it sounds, the dealership jerks you around on a string. They bring you in and show you around, work out your paperwork and get you “pre-approved” with one of their major banks. This “pre-approving” essentially requires just your name, personal identification like your social security number and drivers license, and your income – one paystub or anything that says “I work here and get paid this”. They send that information in and the bank sends back how much it was NORMALLY finance for.

That’s all well and good for them. It gives them a price range to show you around on. But, what happens next is both repulsive and extremely underhanded. Dealers know that these “pre-approval” quotes rely on a thorough background check and confirmation of employment. But because they are afraid that if you don’t drive off the lot THAT day in a car you THINK you bought, you’ll go shopping around, they tell you that you BOUGHT the car, that you were approved and financed and everything is fine. They show you the car they want you to buy and really push you into that car. When it comes time for the bank to cut the check for the car, they run your information. And if they don’t like what they see, the refuse to finance you. A little form in the multitude of forms you sign “buying” your car tells you that the dealership has the option, if they can’t find you financing, to either offer you credit to buy the car or take the car back. Most simply take the car back. But by the time they find out they have to take the car back, you’ve already invested money into the car. And what’s worse, some of the contracts actually CHARGE you for the time you did possess the car, so your deposit/down payment, if you made one, isn’t fully refunded. While this is happening, they’re trying to find a bank to salvage the deal, which might lead to a higher deposit requirement, higher monthly payments, and higher APRs. Ultimately, it damages the buyer’s emotional and financial health.

This is what happened to me. After my month of driving the car, I got the call saying I’d have to bring it back. Jim Burke is supposed to be a fantastic group. The fact that they practice this trick stunned me. I asked them about it, and was told that “we aren’t the only company that does it – most of them do”. I thought back to Adamson Ford, who wouldn’t let me drive off the lot until I had financing. I didn’t believe that. So, I called around and found Serra Honda. They wouldn’t let you drive off without financing, either. I made a trip to Serra Honda and eventually, after much difficulty, managed to qualify for a 2007 Ford Explorer with 103k miles on it – a SIGNIFICANT downgrade from the car from Jim Burke. But, I was able to afford it and it was a way to go that I was APPROVED for, not PRE-APPROVED. So, with the sales rep from Serra Honda following me, I returned the car to Jim Burke. The sales rep accompanied my into the store, and the sale person from Jim Burke saw me and came out of the finance director’s office saying something about “We’re just checking one more financing option”.  I was, admittedly, both excited and irate. I was excited that maybe I’d get to keep the nice car after all. I was irate that I had been put through this emotional rollercoaster and they were “looking for another option”, even after telling me I’d have to bring the car back. There was some less than friendly words between the sales rep from Serra Honda and the Finance Director, but ultimately, I received my full deposit back and returned the car.

I’d been dreading that moment all week, since Monday when I was first called and told I might have to do it. But after giving over the car… it was like I was free. It was a bad deal, anyway, really high APR and monthly payments. And yet, I was still upset that Jim Burke, one of the “best” dealerships around, would let that happen. I’d lost out on a month of insurance and registration for that car, not to mention the huge amount of gas I had to put in. And, for me, a first time buyer who was so amazed at the car I’d managed to “buy”… the emotional turmoil I experienced was devastating. When I first called Serra Honda and was put in touch with a sales rep, the first thing I said was “I’ve been through a horrible time with another dealer and I don’t trust dealerships anymore. I want you to make me trust you.”

Thinking back on it, there was so much WRONG with the deal at Jim Burke. For starters, I had also been texting a sales rep at CarMax while I was at Jim Burke – they were offering me similar cars for lower prices than Jim Burke, and I wanted to see what they had. I asked if I could go visit them to compare, and the sales person made the comment “I’m not sure this offer will be here tomorrow.” Then he goes and knocks the price of the car down to slightly more – five or so more dollars – than the price CarMax offered and kept bragging about their “Free oil changes for life” on all cars they sold. I was a fool. I should have realized I was being played. I shouldn’t have become so enamored by the idea of owning a nice car at my age just starting out. But I’d grown up around people who bought used cars from individuals, and had to spend twice the price they paid for the car on repairing it after the transmission fell out or the engine died. I was terrified of that, and let myself buy into the idea that the dealer knew what was best for me.

This is a cautionary tale. For anyone looking to buy a vehicle, please learn from this. NEVER TRUST YOUR DEALER when they say you’re approved. NEVER believe them when they say you’re financed but don’t show you the actual agreement paperwork. And DO NOT buy into that sweet dream – if it sounds too good, it is. Don’t go investing so much money into a car you buy on financing until AFTER the car is financed. And MOST IMPORTANTLY ABOVE ALL ELSE, don’t believe that a company’s “good name” means they’ll treat you as good.

When I returned the car, I asked for a letter explaining exactly what happened and why I had lost the car. Expecting a play by play recount, I was surprised to arrive to return the car, and be called into the Financer’s office where he rapidly typed out a three sentence letter, which he then signed. It was very short, and extremely uninformative. It took less than five minutes to type, when the phone call explaining why I had to bring the car back took a good 20 minutes. This is the entire transcript of the letter:

“Mr. XXXXXXXXXXX
Capital One rejected your loan because they did not accept you form of income. We submitted it to the bank and they made the final decision that they were not going to purchase your loan. It was in both parties best interest to have the vehicle brought back to the dealership until further financing could be arranged.

Thanks,

YYYYYYYYY”

This letter was stunning to me. Did not accept my form of income? I’m not allowed to have any other job that would result in me being paid while I work at UAB  - what other source of income could I possibly have for them? Purchase my loan? I didn’t realize anyone had given me a loan that oculd be purchased, yet. In both parties (should be parties’) interest? How was it in my interest? I wasn’t going to have a vehicle or a way to go! I couldn’t make it to school or work on time without the car. I’d have to risk walking the streets early in the morning in a less than safe area with a backpack full of books and a computer! And let’s not start on the money I spent on the car up until then… Or maybe the “both parties” in question were the dealership and the bank. I’m not sure. But the letter was next to useless in understanding this debacle.

The attitude of the employees when I returned the vehicle was appropriate, I think. The salesperson was almost apologetic in his actions. The person who handled all the paperwork was short and curt, business-driven and relatively polite, though he thoroughly failed in explaining why the situation had arisen. Their attitude towards the representative of the other car dealership that came with me was not as appreciated. But it was fragile situation – one that might never had happened if they’d  done what Adamson Ford had done, what Serra Honda would have done if they didn’t have their own in-house financing: send me home without the car and let me know at a later date. That way, I wouldn’t have wasted 6 hours of my life in a courthouse trying to register a car that wasn’t mine. I wouldn’t have spent nearly $300 on gas for it.

But ultimately, I should have realized something wasn’t right. That’s why I’m writing this. I’m not placing all the blame on Jim Burke’s – although the fact that this “respectable” institution would use such an underhanded trick to get a sale is stunning. I share in that blame for being naïve and ignorant. I thought I’d done my research by looking up everything I should check when I go to buy the car. I looked up nothing on what to expect from the sales side of the deal.

So to whoever reads this, I hope you will keep this in mind when next you go to buy a car from any source. After the number of banks that they ran my application against, my credit has taken a rather unpleasant dip. That’s something I could have avoided. But ultimately, what is done is done. I will never trust Jim Burke again, and I would strongly advise against anyone trusting them at their “word”. For many buyers, this “yo-yo” set up works out fine. But the fact that they expose their clients to any kind of risk like this just to make sure they can “start” the sale is repulsive.

Be safe, shop wisely, and never trust Jim Burkes Automotive.