1.9% Finance What a Joke

Stealership 101 Finance Tactics...

 

A 6 year amortization of $35,490 @ 1.9% is only $522/month. They are trying to rip you off.

NEVER sign a agreement that locks you into a purchase without knowing exactly what the payment will be.

 

They are charging you interest at a rate of approximately 6%. If you legally have a "cooling off" period then take advantage of it and cancel the contact. Make sure you tell them why you are cancelling, because they misled you over the interest rate!

 

nothing wrong with trying to make a buck, right ?

 

A nearly $2,000 delivery fee? OUCH!

 

If you were in the US instead of Austria, you would have paid $412 a month with terms and balloon as described. Sounds like they are working some extra charges on the monthly.

 

One lesson learned is that the sales price is one place they might make money but the real money is after you leave the sales guy and start talking to the finance guy, the special services and options upseller, etc.

One of the reasons I save my money and buy for cash and accept to upselling is just what you experienced. I'd rather wait than be subjected to something that makes me feel dirty when I leave the office.

 

I would go to a bank or credit union that makes auto loans, preferably one you have an account with, and take your paperwork. Ask them if everything is legal and why EXACTLY it appears your 1.9% interest rate is not reflected in the payments. Do it quickly and then go to the dealership loaded with ACCURATE information.

 

Ok. Here's the deal.

1. Determine EXACTLY how much was financed. First number reported was obviously not right. Without knowing that then no calculation is going to work.
2. I took your $35490 and added the $1080 to equal $36570. This might not right, but your car loan did not go down, it went up when they added the $1080.
3. At $36570, with 1/2 ballon at 48 months, I get $425 a month.
4. Maybe the 1.9% is not ANNUAL INTEREST RATE but a Periodic Interest Rate that is compounded on itself daily resulting in a much higher Annual Rate.

However, not knowing the Australian laws, they may be able to calculate or compound interest differently than the US. I would also be disappointed with the "legal" advice you got that could not see the price of the gap insurance and loan origination charges on your paperwork. DO NOT go back to them for advice. Find someone in the lending business (bank, credit union) and ask them. Lawyers often know very little in reality other than their specialty which might be getting someone out of jail or defending a drunk driving arrest or doing wills etc.

Suggest to the bank or credit union that you will bring the loan to them by getting the "pay-off" balance from the dealer. Hopefully the laws there will allow an early payoff. Here an early payoff is the principal only, not future interest. Maybe this won't help if the bank charges more interest. But it is IMPERATIVE you know the exact numbers financed. If you are not comfortable confronting the dealer when you have the real numbers, bring someone who knows how to get down on them.