It has been reported that there is a class action law suit against General Motors for defrauding borrowers through higher interest rate car loans.
We all know that car dealers can and will be deceptive when the opportunity will arise. It has been reported By Stick Bogart at badbusinessbureau.com auto buyers advocate, that when consumers go to car dealers to buy a new or used car that the finance managers do the following.
First, the car buyer goes to a car dealer looking to by a car. Car buyer finds the car the customer would like to buy. Second, car salesman goes into the building with his next victim in tow to find a way to make a big profitable car deal. He, the car salesman will get all credit info as fast as possible and run up to his sales manager "The Desk"
Now the deception is being worked by the "desk Manager" He will run a credit app on the buyer to see what the "Fair Isaac Score" is on this car buyer. He wants to find out how good the buyer's credit is so he can get the lowest interest rate possible. which is called the "buy rate "
During the process of finding the lowest interest rate, ( The buy rate) the Desk Manager or the Finance manager will send the car buyer's credit info to as many auto lending companies as possible. Doing this is called (Taking a shot gun to the car buyers credit) This does SEVERE HARM TO THE BUYERS CREDIT !!!!
Now the car dealer finds an auto lender that will give a low interest rate, (The buy rate) ..NOW the deception comes into play. The dealer never tells the car buyer what the buy rate is. Let's say the sales manager has got the buyer approved for 9.5% He will tell the car salesman to stay off of the interest rate when negotiating with the buyer and stay on only the monthly payment. If the sales staff does talk to the buyer about the interest rate, they will NEVER tell the car buyer about the BUY RATE or what that is.
The car salesman will not talk about the 9.5% interest. He will talk about the monthly payment to try to get a commitment with the car buyer on a payment. If the payment that the car buyer agrees to, calculates to a higher interest say 12.5%, the dealer will get the difference between the 9.5% and the 12.5%. The difference between the 9.5 and the 12.5 is called the "SPREAD" Some car dealers call it "POINT PACKING "
What ever the 3% adds up to, the bank will send a check directly to the car dealer after the car deal has been approved. This is called "BACKEND GROSS" Money the car buyer never knows about that goes to the CRAPPIE CAR DEALER.
To you car buyers that think you got a great interest rate on your car loan, ...THINK AGAIN, because at most car dealers, the finance managers, the desk managers and the general managers get paid big money to "STICK YOU" in a higher interest rate then what you actually qualify for. Yes, the banks do not care about you because you are in debt to them. THEY MAKE MORE MONEY when a car dealer does this to you. They like it when you are in debt to them. They want your MONEY !!!
Example. If a car maker has a special interest rate offer, most car dealers will never tell you about it so they can do the above to you. Car dealers do not make more money if they offer you the car maker's special interest. Do you think a car dealer will make big money on 2.9, 3.9, 4.9, or a 5.9 car loan ?? Car dealers like it when you get a 9.9% up to a 29.9% loan or higher, depending on what state your in.
To get a good car loan you need to go to the car maker first, your credit union second and then your own bank. The car dealer is the last place you go to get a car loan. If you have bad credit, GOOD LUCK no matter where you go.
CLASS ACTION LAW SUIT:
If you think you might be a victim, please contact us.
This Rip-off Report will be UPDATED shortly with more information.
The Auto Buyers Advocate