The Sub Prime Auto Loan Racket is Despicable

[Johnny2X2X]

https://jalopnik.com/how-a-subprime-auto-lender-consumed-detroit-with-debt-a-1829527899?utm_medium=sharefromsite&utm_source=Jalopnik_facebook&utm_campaign=top&fbclid=IwAR1MsK6mfHIXqf3GbNrvKlvZe7T18v-TdK7YrcUife1tqDSqa_lHNlZ9guU

Infuriating! I know people who have fallen victim to this, they hook people in and make them think that their credit is worse than it is when they could probably qualify for a better interest rate. They sell them cars with 100,000 miles on them for $450 a month because they guilt them into thinking they can't do any better.

And it's even worse than this article shows. I know a nice girl who got taken by this outfit. Her credit was fine, if she would have talked to me first I would have helped her. Here's what happened to her. She is a single mother of a child with disabilities who has constant doctors visits. So Lynn (I'll call her Lynn here) really needed the job she had been working at a warehouse as a picker because of the benefits they provided to her and her daughter that helped with the bills that weren't covered by Medicaid. Her abusive ex husband gave her a car in their divorce, but that car was constantly breaking down. Finally it had broken down in ways that made repairing it several thousand dollars, she was left without a ride to work. She got bad advice and went to one of these outlets and they ran a number on her. It was all very slick and well set up, they hooked her on a car that was newer and would be good for her, they ball parked a monthly payment before they ran her credit, it seemed high, but she thought she could swing it. And best part was she'd be able to drive the car home that day.

So at this point she's had a roller coaster of emotions, she thought she was out a car with the latest break down, she was panicking. Then she thought, phew, sweet relief, it's expensive, but I can make it to work and continue to get around and take my daughter to doctors appointments and such. And here's where they got her, they had no intention of selling her that car, they just wanted to be able to come back and tell her that she didn't qualify for any loan for that car. "Your credit is simply too bad for a car loan, I'm not sure we can help you." Devastation! The slick salesman lets her stew, and almost lets her walk out, but "wait, let me talk to my manager, there's a new program we're going to be offering next week that you might qualify for, let me see if it's even active yet." She has no options, she's now been there for a couple hours and is exhausted. Salesman enters, "OK, this might be tricky, but if I talk to our finance guy and you agree to a few things we might be able to sneak you into this new program, but only if we do it before closing." More waiting, more exhaustion, more anxiety. Back and forth with new paperwork, sign this sign that. Finally, "OK, Great News Lynn! So happy we could swing this and help you, I think we can get you a car tonight, just not that car..." Huh?

At this point she's broken down emotionally. She's desperate and willing to take a look. This was in 2016, she ends up with a 2005 Ford Focus ZX5 that already has 95,000 miles on it! Her interest rate? 22.9%. Her monthly payments? $465 a month after insurance, they make you purchase their insurance. And this awful awful deal only gets worse and worse. Turns out that some of the paperwork she signed was an agreement to only bring the car to their garage for service of any kind. When it starts to break down, she's paying $300 for a new battery, $450 for brake pads (Not rotors and calipers, just pads). And if she didn't bring the car there for repairs they said they could repossess it. And it gets worse! All of their cars have a remote kill switch installed in them, if your late a single payment, they disable your vehicle until you call and make your payment, plus another $100 in fees. Of course she's 10 days late on a payment after several months, parks her car and goes into a grocery store with her daughter on a hot Summer day, when she gets out her car won't start. She sitting there with a cart full of food in the hot sun not knowing what to do, before she can get someone to give her a jump she gets a text on her phone telling her that her car has been disabled for failure to pay and she needs to call this number immediately. Of course they want her to pay almost $600 over the phone for them to re-enable her car. They end up settling for $300 mostly in fees but she wouldn't have the money for a couple days. She calls back, pays the $300 and goes to pick her car up at the store, only thing is that it got towed so now she has to get it out of impound for another couple hundred. And here's the thing, they knew it was impounded and didn't tell her.

After hearing all of this I hooked her up with a lawyer friend, is advice, pay them. There is literally no way out of paying them, they never stop trying to collect. These people are predators and all that is wrong in this country. Pay day loan crooks are the only group on par. These industries need to be shut down!

And here's the worst part. I check her credit report on line for her, her credit score is a 685! She has fairly good credit and certainly would have qualified for a rate under 5% for a car that she could afford and had low miles. Absolutely sickening, these are some of the most evil people that exist in this country. This scam is run thousands of times. These people belong in prison.

[getagrip_already]

1. wow...

I knew something like this was happening with all the radio ads, but never imagined it was THIS bad.

"As long as you bring home $350/wk, you can get $30k in credit. Instantly!"

Really, I know a scam when I hear it. And these ads are all trying to steal your money.

[Johnny2X2X]

2. You have no idea

The terms of that loan were insane, it was a 72 month loan for a car that already had almost 100,000 miles. That car will be long dead when she's still paying for it. She paid $12,500 for a car that had a Kelly Blue Book value of half that, and her interest rate reflected that imbalance. That should be illegal, all of it should.

Sub Prime car loans
Pay Day loans
For profit online colleges

These industries prey on the desperate and needy, it's disgusting. They even have predatory dental offices now who will finance basic dental work at a %500 mark up from normal cost where the employees get bonuses for telling you need unnecessary work.

There is no one looking out for consumers anymore. It's getting worse and worse and these industries face less and less regulation under Republicans. Everything is a scam on you if you're poor.

[getagrip_already]

4. surely the senate or cfpb stand ready to help? (sarcasm)

Yeah, I know. The guardians at the gate have become prison guards....

We have to over throw these creeps (at the ballot box hopefully).

[Hoyt]

3. 685 credit score. That really should be criminal. No excuse for allowing that.

There are some people with really bad credit that no one will lend to at decent rates, but this obvious scam is criminal. It would be relatively easy to enforce too.

[Johnny2X2X]

6. I thought the same thing

I thought the same thing so I asked her about it. She said she signed something agreeing to a higher rate because she was putting no money down.

Again, they brought her to the brink of feeling totally out of luck and back several times. It was a systemic way to break her down.

[aikoaiko]

5. That's a horror story.

Sorry for your friend.

[Johnny2X2X]

7. Thanks

I still feel bad for her. And she's not a stupid person, she's quite smart, she was just taken in and had never bought a car on her own before so they preyed on that.

There are hundreds of thousands of people who've dealt with the same thing. This industry is nationwide.

[discntnt_irny_srcsm]

8. Get me some names

Salesmen, managers, finance, whatever. I will pass on their names and phone numbers to the "IRS" scammers next time I get one of those calls.

What low life scum!

[Johnny2X2X]

9. It's legal.

Unfortunately it’s all legal. There’s multiple multi billion dollar industries in this country that spend all their time looking for loopholes in the law so they can screw over the poor to get rich. It’s getting worse and worse.

[discntnt_irny_srcsm]

10. I kind of don't care if it's legal

They're scum and they deserve a bit of hell.

[Johnny2X2X]

11. I hear you

Everyone involved is scum. The salespeople, the managers, and the owners are parasites.

[Johnny2X2X]

12. When you're poor, everything is a scam and everything is more expensive.

The scamming the poor industry in this country has never been bigger. I don't think it gets any attention in the media and that's a crime too. The deck is stacked against the poor in every possible way.

There's scams to sell you cars like this. There are scams for payday loans if your car breaks down. Scams for dental work. The Criminal Justice system is rigged against you. Renting is filled with pit falls, and in addition to being more expensive there are illegal leases they try to force you to sign. For profit colleges will screw you for a buck. The banking system isn't even on the up and up anymore. Scamming the poor is big business. Even groceries are more for poor people. Who's looking out for consumers?

I don't think a lot of people have a clue at how stacked the deck is against the poor. And it doesn't just effect the poor and the working poor. Anyone who's went to college and lived in a college town can count the ways the system is stacked against college students in a way to generate maximum revenue from them. From leases that should be illegal, to parking laws that are designed to trick you, to a court system designed to sap every penny out of you possible, and even the local elections have been moved to the Summer so the students cant have a say in their local government. That's just a small taste of what the poor in America deal with every day.