I was watching a recorded program from KHOU this morning and the reporter Jeremy Roglasky was discussing research he had done on a particular fee that car dealers charge unknown to its customers.
Interesting and also rather distressing especially for those making payments on their car.
This fee is usually charged to those with no credit, spotty credit or a checked credit history..
The banks or lender charge the dealers thousands of dollars to approve risky loans. It is called an acquisition fee and is not supposed to be passed on to the customer. Most of the time it is, and the customer is never told. You end up paying thousands of dollars more than you agreed to.
Jeremy investigated two transactions and found the following:
Ford Focus – $21,925 – undisclosed fee $2,865 and the advertised interest rate went from 18% to 25%.
Ford Edge – $33,998 – undisclosed fee $7500 and the advertised interest rate went from 18% to 35%
So as you can see this is how the fee is added in to the cost of your vehicle without you knowing.
One way of protecting yourself from this fee is
- Do not let the dealer run your credit before negotiating a price.
- Examine your contract closely before you sign and make sure it is the deal that you and the salesman agreed to.
- Check the figures
Number of Payments: 60
Amount of Payment: $637.41If there are any hidden fees the payment amount will be higher and/or the number of payment will be greater. For example, if the payment is $648.40 and the number of payments is 72, it means there is a $5,000 hidden fee included amount financed.
Therefore, you should always calculate the correct payment of the amount financed before simply trusting that the dealer has entered the right numbers.