Case Study – Motor Vehicle Finance

Sooner Solutions logo EMAILA few years back, my wife ordered a new car, and we were presented with the usual post-sale options of rust protection, window tinting, and finance.  To my surprise, they were offering a really low interest rate that they said was subsidized by the manufacturer, which may or may not have been true.  So, she filled in the forms, and we left feeling pretty good about it all.

Because she wanted a special configuration, we had to wait for the factory to build it.  Then the delays started and went on for months.  By the time it arrived, the special finance offer had expired.  But since she had already lodged an application, we decided to see what the dealership’s ‘Finance Specialist’ could deliver.  I disclosed in advance my role as a broker with access to the best interest rates in the market.

Their Specialist came back with documents that included the 36-month term and zero residual that we requested, but the repayments seemed high, so I worked it back and found that he had the audacity to expect us to accept a rate of over 14%, which at the time was about double the going rates!  After suggesting that dealership’s owner should know about this outrage, he changed his tune and provided repayments based on a competitive rate.

Bottom Line:  You cannot trust a car dealership’s finance specialist, because he’s not working for you.  Get your finance pre-approved with the help of a good broker, then go shopping.

Comparing Car Finance Quotes

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Bank Regulators’ Fines Ineffective

0829 Sooner Solutions logo email and webAccording to the Financial Times, the amount of fines and settlements paid by global banks since the GFC is US$100 billion.  That’s shareholder funds paying for their management’s admission of guilt in rigging foreign exchange markets.  Unless the guilty individuals (CEOs?) are taken to court, it appears that their criminality will continue to be just one of the costs of doing business.

I’m with Elizabeth Warren on this one.  She’s one of the few to have grilled the chiefs of the Federal Reserve and the FDIC about their not referring anyone to the Department of Justice during this period.  That’s in stark contrast with the many hundreds of individuals referred during the banking crises in the late 70s.