Since I'm a first-time buyer, I was offered relatively poor interest rates. The finance guy at the dealership said he would pull some strings to get me the 3.9% rate if I opted for an extended warranty (he actually told me that he's helping me to help himself since the finance people make money from selling warranties). Here's my question: Can I get the warranty now, lock in the low rate, and cancel the warranty next week?

 

Wait a minute - you don't qualify for the lower interest rate, but he'll give it to you if you buy an extended warranty?

You're kidding me, right? He can't give you the 3.9% rate unless you legitimately qualify, ergo, you probably *do* qualify for it. He's just trying to yank your crank to get you to spend an extra "X$" with the extended warranty.

If this is the case, go online to find a cheaper rate - usually you can find them on edmunds.com

 

Ug! That's bullshit. The salesman will either make money on the financing or the warranty. He's just padding his own pocket by making you think he's helping you out. If he can get you 3.9% under any circumstances, then your credit warrants it. Or, he's pulling your leg and planning to tell you later, after you've purchased the warranty, that he CAN'T get that low rate. Be sure to periodically check the Acura web site (http://www.acura.com/eacura/eacura_f...llSpecials.asp) for their current deals. When I bought my TSX, there was a 3.9% special for all new 2004 Acuras that my salesman pretended not to be aware of.

Get your financing lined up from a credit union (there are usually credit unions you can join even if you don't belong to a particular group), and then go back to the dealer. If you don't want the warranty, don't buy it. Extra warranty protection on a car this good is a total waste, imho.

 

Darwin, I really hope you will check back here before being buying into that crap. Pull your own credit scores and you will be able to determine where you stand. First time buyer does not mean poor interest rates.


RedBox

 

Actually, I pulled my credit scores 2 months ago and I had a 704 FICO -- which isn't bad but it isn't quite good enough to get the best rates they offer. When I went to the dealership this past weekend, the scores they had in front of them were much lower. They told me that the score was probably lower because I had a balance of $1000 on a credit card with a limit of $1350 and people with balances at 75% of their limit are typically higher risk. The part that really pisses me off is the fact that I have never actually carried a balance over to the next month -- I have always paid my credit card off at the end of the month. It just so happens that, on the particular day that the credit agency pulled the report, I had a balance that was 75% of my limit, which effectively lowered my FICO score by 50 points.

Anyway, thats why the finance guy told me I'd probably be stuck with rates like 6.49% or 5.9%. I have no idea how he can "pull strings" and "convince people" to give me a lower rate through the Acura Financing (whatever banks they use...). I didn't realize that there was an element of discretion on the part of the car finance guy. So, if I get the extended warranty, he says I can get the 3.9% rate and, all in all, lower my monthly payment by $10. In all actuality, I'd love for him to get me that rate since it's the best I've seen. And, even though he appears to be giving me the run-around, it is saving me money. But, back to the original question -- can I cancel the extended warranty afterwards and still retain the low rate?

 

Each extended warranty is going to be different. I would suggest you ask the company that is providing the warranty.

But honestly, with that score, I would check with your local credit unions and banks and see what they can offer you. Why take the risk of not knowing whether you can cancel the extended or not or worse give the dealer some ground to pull another one on you.

"Darwin, we're so sorry, but your financing did not go through. The best we can do is 50.0%"

Anyway, you get my point. Good luck.


RedBox

 

Darwin,
When you buy the warranties at the dealer, the finance manager will add the price of the warranty to your loan. You will pay the additional 3.9% on top of the price of the warranty. If you were able to cancel out the warranty, the warranty company would pro-rate the refund and likely charge some type of fee as well. You would probably lose more money than you would save from the lower interest rate. As Redbox said before, your best bet is to see what banks are willing to do for you. It would at least give you a bargaining chip to help your negotiations with the dealer. Good luck.

 

You've got to love the logic here:
They are think you are more at risk of not making your payments so they give you a higher rate BUT if you spend MORE MONEY they'll give you the lower rate!

Does this actually make any sense to anyone??????

 

It makes sense to the dealer. You gotta give them some credit for thinking of these "deals". They must sit around a table at night, drink, and get creative.

 

Above 700 score should be more than enough to qualify you a 3.9% rate

Check to see which credit agency (equifax, transunion, experian) you have the highest score with. Once you know which agency has your top score, have the dealer do the deal running the credit with that agency.

If you are using American Honda Finance this should be no problem.

 

I had a 719 score and had to fight for AHFC to give me 5.9%

 

Sorry to hear but if the dealer was giving me that bullshit I would walk out of there. Find another dealer is my suggestion. my FICO is approximately 720 and I got a 3.90% APR for 60 months. I had plenty of loan's to choose from. Anything over 700 you should qualify for the good rates. This guy is fucking you over. My suggestion. Go online and get approved for the lowest rate you can. Then go back to the dealership with that in your hand and make him beat that rate. Bottom line, if you don't get the financing you want then get outta there!

 

damn its kinda too late for that. I bought my car in May. But i can always refinance...