Report: #613780

Complaint Review: J.D. Byrider/ CNAC

  • Submitted: Sun, June 13, 2010
  • Updated: Sun, June 13, 2010
  • Reported By: Janet — Lafayette Indiana U.S.A.
  • J.D. Byrider/ CNAC
    1000 Sagamore Parkway West
    Lafayette, Indianapolis, Indiana
    United States of America

J.D. Byrider/ CNAC Yet ANOTHER way these Immorally corrupt people have found to get even more out of you Lafayette, Indianapolis, Indiana

*Consumer Comment: Those loans used to be called Rule of 78's or "add on interest" type loans

Show customers why they should trust your business over your competitors...

Well, as if those fine people at CNAC and JD Byrider haven't conjurred up enough sleazy ways to gouge you even more of your money.....

They have now figured a way to always keep the balance higher than what you actually owe them, and to have one last final chance to get the most of you when you are ready to get yourself out of their cars. They do this by simply taking the payments you make to them and applying them to the final price of the car, all that added interest., first, before applying them to the actual purchase. 

I'll use myself as an example, since this is how I know they are pulling this slimy tactic.

I bought a car for $6500, after they added charges for this and charges for that, the price of the car was now $11,967. When the contract is completed they present me a final amount of what you will be paying for the car.  In my case, that number has now jumped to 21,055.  Each of the payments I make are deducted from the 21,000 figure.  BUT that figure changes as every time you make a payment you change the amount of interest owed.

By them doing it this way, after I have made 31 payments, I will have paid $11,687.  A few cents shy of paying it in full.  If I decided to pay the car off, and boy do I wish I could, the cash payment will be  $11, 967, claiming the payments  made went to the interest only. They can legally do this.  Maybe "legally" but not "morally"    

This post is going to be one of another 2 or 3, addressing several issues I've had with this vehicle purchase.  This is the third vehicle I have bought from this location.  NOT because we have bad credit, but because I just had to have the Cherry RED PT Cruiser on the lot!


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#1 Consumer Comment

Those loans used to be called Rule of 78's or "add on interest" type loans

AUTHOR: MovingForward - (United States of America)

Yep, its a bad loan. The way the loan is computed ALL the interest is added to the cost and the interest is paid first. Bankrate dot com has a good article to explain the process if you search for Rule of 78's.  Some places call this "add on interest", because the dealer just actually adds the interest onto the purchase amount and the interest is front end loaded. You incur ALL the interest the minute you sign on the dotted line.

Check your state's statutes, 17 states have outlawed this type of financing on loans that are longer than 61 months. Buy Here Pay Here lots are notorius for using this kind of financing.

Next time you "have to" have a particular car/truck etc - get your funds lined up with a credit union or other reliable lender and buy it cash at the dealer. That way you have a regular simple interest loan and not one of these subprime 'gotcha' loans. The only good thing about having had this loan is you will never fall for it again.

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