Confessions of an Auto Finance Manager: Avoid the Post-Deal Tricks
In the summer of 2000 Edmunds.com produced the pioneering consumer advice piece called Confessions of a Car Salesman. By sending an editor, undercover, into the netherworld of car sales he was able to report on the various and sundry practices and procedures utilized to "get you into this car today."
Confessions of a Car Salesman has been an unqualified success, and eight years later it continues to inform and entertain car buyers who want to avoid the sales games and simply get a fair price on their next vehicle purchase.
But while we've helped consumers learn about the games played by car salesmen, what about the tricks that happen after you've agreed on a price and are ready to make a deal? For this I'm proud to present our next great contribution to consumer car-buying awareness, Confessions of an Auto Finance Manager.
As with our first "Confessions" piece, Confessions of an Auto Finance Manager steps inside the world of an actual F&I (Finance and Insurance) manager who worked every angle in dealership "back rooms" for over six years and 6,000 vehicle transactions.
If you're not familiar with the terms "F&I manager" just think of the last time you bought a car. After closing a deal with the salesman you were likely shuffled into a room with a large desk manned by an important-looking gentleman (or gentlewoman). In this room you closed the deal by signing all the official paperwork on the car you just purchased. In fact, that's what F&I managers want you to think about this part of the deal -- you're just signing the official documents before you leave in your new car. "Just relax and you'll be outta here in no time."
But the truth is somewhat darker. In-between signing the paperwork these gentlemen (if they're doing their official job) are working the interest rate on the loan, confirming how many "extras" you can afford and (though technically illegal) quite possibly "packing your payment" to ensure you spend as much on this car as your credit line will allow.
I won't try to do the article justice here, because I can't. It's simply too entertaining (and too packed with useful information) for me to cover even the basics in a blog post. Instead, I'll just suggest you read it, and experience the latest journalistic breakthrough in automotive consumer guidance.
- Posted by
- Karl Brauer August 7, 2008, 6:00 AM
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- Car Buying Advice
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- Confessions of an Auto Finance Manager; Car Buying Advice
Glad I always pay cash for my cars, never do trade-in and never buy extras at the same time. That's pretty scary stuff.
Very interesting. I'd like to hear more from Edmunds about some of these "extras" and whether they are total crap, as well as fees such as "document fees." The last time I purchased a car (used Saab), I was trying to get the "out-the-door" price, but the salesman punted that issue to the F&I guy. After talking with the F&I guy, I nearly canceled the entire deal because he was such an a$$.
Fun article. There's so much info and yet I still see "Did I get a good deal" threads in car forums. "What's a good price for X car?" Good price? Everybody can get a better deal or a worse deal than you. Step into that dealership it's you v. them.
Even though my Mini is still worth 90% of its cost, I'm really, really annoyed I paid MSRP. Hell, I paid 35.7k for a 2006 330i (sticker of 42k) and I still wasn't entirely happy with the deal. The F&I guy pulled some junk with my car - and I fought off most of their lies and tricks. Still he wouldn't allow me to get MSDs which would have reduced the payment by even more. I should have walked but I already had the tickets for the flight to Europe and I was a dumb, dumb buyer. I let emotion rule my decision and it cost me about $500 more on payments.
Steps I take now:
1. Arrange all financing ahead of time (have it ready unless you're going for the special 0% stuff - then know your numbers)
2. Know all the numbers ahead of time (I even call for doc fees).
3. Buy the car via the internet/phone - the in person thing is worthless
4. Get it all in writing and arranged before you set foot on the lot to pick up.
5. Be willing to walk away. Luckily I'm not passionate about any cars right now so I just don't have to worry...
Even when paying cash or using Internet purchasing, the F&I folk can make your car buying experience very unpleasant. An Auto Nation dealer did that to me by throwing last minute charges and adjustments on top of a "final" internet deal (happilly, the dealership cratered a year later, though the new owners showed every indication of being no better.).
I wonder how true this rule is ; screw customer in haste, loose future sales in leisure?
...but plz don't get me wrong; I've found a few good F&I folks out there (the one finalizing my CUV sale actually dissed the usual "add-ons" and very clear about what would happen with different financing options (in end I paid cash, with no hassles)).
Kurt, so they didn't mention lojack or an alarm? Anything at all?
blueguydotcom, The article does mention them.
..and the article really gave me helpful insights to the F&I environment. Kudos, Edmunds!
I hate having the conversation with the finance guy, even when paying cash. They always want to charge you extra for their piece of crap alarm, they always say "Well it'll cost us more to take it out". I always insist that they do that, invariably I end up with a freebie alarm.
Good job Edmunds. Buying a car is worse than going to the dentist in many cases. Sitting down at that table effectively ruins the excitement over getting a new car. For kicks, I signed up for a clear coat protector just to see if it worked since all the experts say it's crap (completely my decision) and surprising, after a year, the paint coat is still smooth and I haven't waxed a single time. Not bad for $300 as far as I'm concerned. Anyway, there's nothing better than going to the dealer with a check in hand. I financed through my credit union with an AutoDraft and had them cap it at certain cost. That way, you just tell the dealer to either get you the car for that amount of the check (of course, it included all the taxes, fees, etc) or you're leaving. Naturally, the guy thought HIS financing could beat my CU's rate and it didn't but he was curious to see my credit his self. There's no greater satisfaction that being a fairly young individual with a sky high credit score. You'll blow a lot of minds.
chavis,
Given that the stuff (clear coat protector) comes in a bottle, wouldn't it have been much cheaper to take it to a good detailer rather than letting the dealer do it?
7driver- As I said, it was just an experiment. The funny thing is, the one time I had my car hand washed, the guy asked me what I treated the paint with because he hadn't witnessed one so smooth. The best part about it is there's zero residue on the paint. With my previous car, I had to strip the finish, use a clear coat prep/swirl reducer, polish and then re-wax and it still wasn't as smooth as the current paint job.