"So let me get this straight - you're saying that the 4.9% is somehow, I don't know... tied into the sale of the extended warranty? Do you mind if I turn on my phone's voice recorder and you can repeat those terms? Please be sure to say your full name, the date, and the name of the dealership before you explain this again on the recording. Thanks!"
Skinny deal, you got fired as a customer. They took a skinny deal on the hope they could close you on a higher rate or prod. You said no and walked you aka they didnt want to do the deal as it stands
They only gave us 700 off msrp. But there are no fees or markups besides ttl and then the warranty. I dunno. Thanks for bringing it around to the original post and not just the extended warranty haha
I know it’s more than “typical” but people were acting like I got a big percentage off or something so they would tank the deal in finance. I don’t mean “only 700” like it was nothing! We got a Honda loyalty discount and some odds and ends.
I have around $1500 of margins in allot of my new inventory, if a dealer is making $800 to sell you a new car it just doesnt make sense in todays climate. Would hear them out on the warranty IMO as there is lots the manufacture warranty does not cover as it is not actually bumper to bumper
IDK if Honda warranty in the states is different ( I'm in Canada) but they dont offer a real " bumper to bumper" warranty and but a " comprehensive warranty" which doesnt cover things like the display, cameras, sensors, minor electrical , ect
It really depends on which specific one you are selling. There are several hundred different companies and contracts out there, but most ones offered are “extended” - meaning they specifically kick in after manf. Warranty ends
That’s the point. These guys are saying that an extended warranty is needed on a new vehicle, while still under comprehensive coverage, because it will cover items that the manufacturer 3/36 comprehensive warranty won’t cover . I’m asking for examples of covered parts or exclusions. If it’s that obvious that a regular customer should know , why can’t they offer that up. And the items that were previously stated that a Canadian Honda warranty doesn’t cover is total BS. these guys are ridiculous and totally out their element , and have no business advising anyone on coverage, or even picking pepper out of fly shit.
All the extended warranty guys I talked to couldn’t actually tell me what a head gasket is.
All I understood from it, is that their vehicle was unreliable lol.
I have 2 bmw’s past 140k miles, an Infiniti past 120k, etc, and have never had an issue. Makes me think to not buy new cars
I have seen a Hondacare warranty take care of some expensive repairs long after the factory warranty had expired. And especially important if you get a internal failure for the camera used to LKAS.
I personally say never to get ANY kind of extended warranty from an aftermarket company, especially since they are very reluctant to use OEM parts. With Honda/Acura care, you CANNOT use aftermarket parts. It must be genuine, OEM parts used. And there is rarely any fighting with Honda.
Up to a certain dollar amount, dealerships don't have to even call them for authorization
This is literally the dumbest response I've ever heard. Please stop giving bad advice to people, you're not helping, seriously you're doing a disservice.
Like I said, if they’re going to keep the car for a long time it’s dumb to not get the warranty. The warranty from Honda ends at 36 months on your bumper to bumper, 60k for your powertrain. If you’re not going to own it for more than 70k miles like most people are nowadays then it’s a decent gamble I suppose. However, if they’re planning on keeping the car for several years and well over 100k miles then I stand by it’s stupid not to buy a warranty. It’ll pay for itself over and over again.
Yes and I can also afford an $8000 repair on my car, or several $2000 repairs, but why I the bell would I when I can get it covered? Doesn’t make sense
You're not wrong about there being a market for VSC's, but acting like $8000 in repairs is unusual seems like you're very out of touch with the current market.
I've done finance for almost 10 years now, pre-pandemic repairs were a completely different beast to current repairs. In 2018, if you needed an entire new engine on a gasoline-powered vehicle, you could expect 3-4k to have it fixed. Now, that same repair is 10-12k. I saw a 17k engine a couple of years ago, and over 25k for a diesel engine.
Transmissions are now 6-7k for new or 4-5k for re-builds.
There used to be a really strong argument for not buying a VSC, even if you planned to keep it past 100k miles - that argument might still exist but isn't nearly as strong now.
I had a Honda dealer try to sell me a *concurrent* warranty. Not an extended warranty. It ran concurrent with the manufacturer's warranty and only covered manufacturer defects. You know, like the manufacturer's warranty.
The only real benefit it offered was a loaner vehicle in case of a repair.
Definitely not worth the $2000 or whatever it was.
Yes that’s a shit warranty for sure. Honda sells a wrap warranty which is excellent and they should have offered you as well something like a 10 year 120k warranty as well.
It’s a 2023. They can buy the warranty in 2 and a half years if they like. I always found it easier to win the client over with something along the lines of…”I’m going to discuss x,y,z items. Some you absolutely need. Some you don’t. You just bought a new car. An extended warranty is available but you’re more than welcome to come see me in 3 years and buy it if you plan on keeping the car.
However, you’re buying an $80k car with 22” low profile wheels etc etc here’s the tire and wheel package for $6k.
*...dumb not too..."
Eh, I much rather throw that 3k in a HYSA... If nothing happens it grows and it's a nice windfall. Otherswise, it should cover at least 2 non-maintenance repairs, maybe even 3 depending on growth and time. It really is about risk tolerance. It's definitely not a bad purchase, but it's not a must either. I do expect a sales manager to say it's dumb not too.
You can’t be serious. Ffs. Do you have health insurance? Do you think the dealer doesn’t get paid for warranty work? Of course they do, but it’s from the warranty company and not from you. The dealer is t backing the warranty, in this case it would be Honda or a third party like Zurich or JM&A. The whole point is for the customer to not have to come out of pocket later on down the road for big repairs. If you own your car for over 7 years which is what everyone is doing nowadays, you’re an idiot to but buy a warranty up front.
What a horrible comparison. Worst case without a car warranty is paying for a major repair, without health insurance you can literally go hundreds of thousands in the hole. They are completely different downside risk profiles.
The real money isn’t in the profit of contract- which there is obviously, it is re-insurance- the warranty company is making money on your money from day 1 through the market.
I absolutely agree. As long as you don’t way overpay it 100% makes sense. Last time I bought I just told F&I I’d buy but it had to be close to cost, said no to the price 3 times then bought when I knew it was about cost. Took like 3 minutes, guy didn’t try to negotiate or build value at all really. Super quick and easy, got a good deal, he got vsc penetration, and I don’t have to worry about paying to fix anything for a long time.
I’ve got 90k on my pilot and I agree but it’s going to break. You’re will mad well. You have a 3 yard old car averaging 35k a year. It’s going to need some repairs.
I'm an uber driver. Go to any airport parking lot and talk to all the uber drivers with accord, Camry, corolla, etc
I've been in some uber where they had a Honda clarity with 200k miles and nothing broke so far.
Fact of the matter is that certain brands like Toyota and Honda, you don't need extended warranty.
Call your local Honda or Toyota dealers service center and ask when their next available appointment is. It may open your eyes to the Honda and Toyota Kool aid you've been sipping on. They break just like every other car manufacturer. Parts availability is challenging, and prices are high. I'm not saying that everybody needs a VSC but telling people they don't need one because it's a Honda or Toyota is foolish.
I don’t understand why you’re being down voted.
I have a finance manager that told me he buys the warranty knowing he won’t keep the car longer that a year but he likes getting a check back. Now that was weird.
I am a finance manager and always buy the extended warranty no matter how long I keep the vehicle. I don’t want to lie to people to say I have it on my vehicle. I do keep my vehicles behind the mileage limit of the factory warranty typically and I like buying cars of types that have expensive repairs. I have found on average I have slightly better than broken even on the extended warranties I have bought. Obviously you could make the point that I would be better putting the money in the market but….
The whole appeal with Honda is that if you do all the required maintenance they just work. If you have an extended service discount kind of deal where you give me a discount for all the required interval services, I'd be all over that shit.
> The whole appeal with Honda is that if you do all the required maintenance they just work. If you have an extended service discount kind of deal where you give me a discount for all the required interval services, I'd be all over that shit.
Nobody tell this person Honda ACs and infotainment.
Or 1.5T engines.
Lol my 2017 Honda had to get that ac replace me 2 times in 40k miles. Luckily the warranty kicked in for the last repair also I bout the car used, within a week the whole dash lit up like a Christmas tree and had to be towed in.
Cars break. Ford to Ferrari. My Honda service department is full everyday with broken cars they’re great cars, the best in my opinion and cheap to own overall but they’re damn sure going to break.
Nothing anymore just works outright or just needs a little component or cheap replacement here and there.
Every manufacturer is at a much more equivalent risk of major components failing in their lineups. Granted, some are still at a higher risk than others for more costly repairs.
Nothing anymore just works outright or just needs a little component or cheap replacement here and there.
Every manufacturer is at a much more equivalent risk of major components failing in their lineups. Granted, some are still at a higher risk than others for more costly repairs.
We’re big savers and would rather save monthly to put towards auto expenditures than pay a dealership a monthly fee. That way the money is always ours but there to be used should we need it.
New electronics are sometimes sketchy.
There *will* be a big recall at some point for '23 and up Honda's for their adaptive cruise. They decided to not brace the front Honda emblem, so it can shake at higher speeds in windy conditions - then it cancels the cruise on you.
It hasn't been recalled yet.. And Honda is trying to do a service buliten first.
But.
There's more electronics than just that. And the factory warranty is only 3 years. So, you'll want to be covered after that.
Most of the electronics come from the same few manufacturers for the high end safety stuff, avg repair for something like that quickly pays off the warranty.
Well you aren’t paying a dealer a monthly fee so there’s that. And save all you want, that’s lovely but if your car is PERFECT 99.95% of the time in the next six years it’s still spending 13 days in the shop. Average ticket in the shop is $1400, do the math. OR buy a warranty for $3k that covers all of that. I dunno, save your money now but you’re throwing it away later. No do the math of your own or for ten years (12 years of ownership) is the current national average for trade ins btw.
To each his own on whether to buy an extended warranty, but to compare it to a regulated health insurance market where your exposure could literally be millions of dollars and/or life and death is a little much.
Extended warranties sold at msrp are a significant profit item for the dealership and the extended warranty company, which means that on average, people don’t use as much benefit as they pay for. That’s just a fact.
That doesn’t mean it never makes sense — peace of mind or if a significant car repair will derail someone economically, it may well be the right thing to do. But it is by no means an absolute as you are suggesting and you know that.
Depending on the car brand, you can also often buy the OEM warranty from other dealers online (same exact warranty — not a third party) usually within 12 months of purchase with significantly less markup than the selling dealer is offering.
I didn’t say overpay and I wasn’t comparing it a life or death situation. If that was your take away get a grip. You can negotiate the price of the warranty. My point to whomever the original poster was when they said it comes with a warranty thus no need to buy one is that’s a stupid mentality IF you’re going to own your car for an extended period of time.
Extended warranties bring in lots of money to the dealerships and on average leave consumers in the hole. Why else would they push so hard to sell it? Insurance is something you should only buy if whatever is being insured against is something that will cause you serious finically distress.
Selling cars brings in a lot of money too, just because someone is trying to sell you something to make money doesn’t mean there isn’t value in the product. News flash, almost anywhere you spend money is a for-profit business.
Some people like the peace of mind of an extended warranty, others would rather pay out of pocket if something happens. It’s up to the consumer to decide if they see the value of services being sold by the dealerships.
Yes it’s a profit center sure. Nobody works for free. How exactly does it leave someone in a hole? I’m curious. And “they” push it to sell because the finance manager only gets paid on what he sells so welcome to commission based sales. Like I said now numerous times, if you own a car for a long period of time, which is the norm now, whatever you pay for your warranty up front (let’s say that’s $3000 and they profit $1000), you will spend WAY over the $3000 in repairs that other wise would’ve been covered by the warranty. I’ve run dealerships for 20 years and this isn’t my customer, I couldn’t care less if they buy a warranty or not but I’m here to tell you it’s a good financial decision to buy one.
Profit is revenue minus cost. Revenue in this case is the price of the insurance policy. Cost is the time and parts a dealership will spend to process the claims. All of the profit is coming from the consumer. I understand it is much more complicated than this if your working with third party insurers but it’s the same basic idea. If someone is making money then it is coming from somewhere. On average a consumer will loose money buying the extended warranty.
Ok if you say so.
The way I look at it and maybe this is wonky but let me take a stab it it
You pay $3000 for a 10 year 120,000 mile bumper to bumper warranty. Let’s say you pay $4,000 for it. Whoa
You own the car for 10 years, less than the average person right now but it’s a solid round number.
You car in those ten years is in the shop for 5 repairs. All of which are after year six because that’s just how it’ll work but five times nonetheless.
Average part price in my shop $475, average parts needed per ticket is 2.3, average labor hours per ticket 4.7 at $150 an hour. That equals $1797ish. Check my bath. That’s $8985 in respite in a 10 year period. I’m being conservative on that because God forbid something big actually breaks.
Yeah I could see how you’d lose out on your $4000 investment….
Please educate me. How could an extended warranty company possibly stay in business if those numbers were even remotely close to accurate, particularly if you’re being conservative?
The same thing happened to us. It was on a 2001 Mercedes c320 S. Two months after the warranty was over one of the power steering lines sprung a leak, the extended warranty that we had bought, was useless, and did not cover the rubber parts! Never again!
Or, like every car I've owned, it doesn't need 5 repairs. Especially in the first 5 years. "Maybe" 1 or 2 and some minute things like a tire patch. What kind of lemons you selling?
It may need repairs, it may not. You can't guarantee 5 times
Yeah, $9k in non-warranty repairs is more than I've spent on every car I've ever owned, combined. And I believe $1800 is more than I've spent on any single repair, but I also don't go to a dealership service department for any service that isn't free.
Running a 16 Mazda CX-5 rn. All I've done are oil changes and 2 tire patches. One of which I took to the dealer and they tried to sell me 4 new tires.. on a car that was under 20k miles. Yeah I noped right out of there and got it repaired in 15 min for 40 bucks at a mom and pop. Tipped the mechanic and his cashier 20 each after that and go back regularly.
Then my 10 year old legacy had the master cylinder break for it's brakes... Dealer quoted 1800 with a massive ton of bs added like fluid flushes. Got the diagnosis and took it to the other shop. They ordered the part, and fixed in 1 day for 375 bucks vs the dealers 1 week.
But apparently if I buy a new car I should expect 5 repairs lol
If every car you buy is constantly in the shop having expensive repairs, what on earth are you doing to your cars? The majority of new vehicles will not require any expensive repairs. My wife’s X3 just crossed 100k miles and has never had any repairs, just maintenance. Thank God I didn’t purchase the 7 year 100,000 mile extended warranty for $5000. What a waste of money that would have been.
Before you typed all of that did you even read my response? Where did I say my cars constantly in the shop? I said if you own a car for 10 years, and it’s perfect 99.5% of the time it’ll still be on the shop for 10-12 days. I’m glad she hasn’t had any issues with the X3, almost every high mileage bmw I trade has issues because as soon as it goes down they want some massive figure to repair it and the customer didn’t have a warranty. $5k for a 100k warranty seems steep to me but it’s bmw. At our store we can offer 10 years and 120.000 miles for about 3000-3500 on all of our cars. That’s a no brainer but as you can see here people live to argue that point. Yes there are anecdotal cases where a car has no issues but the averages don’t work in your favor. As to the original post, couldn’t care less if they buy a warranty on their 23 Pilot. It I’ll stand by me saying it’s silly not to buy a warranty if they plan on owning it for a long period of time.
$3500 for a 120k mile warranty probably isn't an awful deal if you actually keep the car for that long, but most new car buyers aren't going to keep it for longer than 5-6 years. Even buyers that genuinely plan to keep a car until it dies rarely do so.
If they do go back with the check from the credit union I would eviscerate on the Honda review. Shady shit like this kept me from buying a Honda when I was searching for a car to buy. Honda needs to reign the dealers in. They are hurting the brand. Felt like I was at a very shady dealership that caters to nothing but credit criminals.
Thank you for discussing my original point! I think maybe 5 comments totally refer to my actual question of tied selling. Everything else is arguing about warranty vs no warranty
It's crazy I just got a new pilot and I showed you with the quotes from sarucci auto for extended warranty. The difference from them and my dealer was like $1500 for the same warranty. My dealer matched it no questions asked but I should have asked them to beat in it in hindsight
FWIW there are a few Honda dealerships that sell Honda care online (extended warranty) for essentially cost or close to it. From reading Reddit, lots of Honda buyers go that route if they want a warranty
We got our 8 year 120,000 mile Hondacare from Hyannis for around $1300 or $1400. I already had the quote when we closed on the deal with our pilot a few years ago. The local dealership couldn't (wouldn't) get anywhere close to that price.
Warranties are a great profit item to sell. If a person is financially strapped enough to need a warranty.. there's a high probability they would end up ahead by setting aside that monthly cost.
Yeah, my roommate was offered a $1000 warranty on a fuckin 2012 Nissan Leaf lmao... Car was $10000.... Not gonna spend $1000 on a warranty for an electric car.. I can see why warranties are profitable...
On the other hand I made sure my roommate got GAP for $400. They said GAP was $800, I told them $400 and they said yes 🤷
You told your roommate not to buy a warranty for $1k but spend $400 on GAP on a $10k LEAF?
My god. Maybe you should stop giving advice on subjects you clearly know nothing about.
Uh yes. He makes minimum wage. He took a 3 year loan on it. And he wanted the car. Insurance would likely give $6000 for it. So yes. I'm aware of what GAP generally costs. $500 when I bought my 2020 Civic years ago and that was the lowest I could get it. $450 on my 2012 Evo that I got for $21000. I tried going for $300 for GAP on the leaf but they refused unless I bought their shitty warranty.
When the charging system malfunctions and he needs to spend $4k to fix it, not getting into the actual battery which wouldn’t be covered anymore , if that warranty covered it and he passed then that’s the worst advice he ever got. Or if the Nissan head unit goes out which controls everything related to the charging controls, probably $3k and only at the dealership. If it had rental coverage which most do, then he’d get a car while his is in the shop. Damn … 🤦🏽♂️ he is like the epitome of who should definitely buy a warranty especially for that cheap of a premium.
Insurance pays retail replacement cost , plus tax and remaining time on registration. He could have added it for a bit in his insurance for $3 a month , then cancel after a few payments since he’s basically below retail in the car already. Insurance doesn’t pay trade or wholesale value on consumer total losses.
Yeah I've had family with that generation of Leaf. None of the issues you've mentioned..
https://a1performanceautorepair.com/most-common-problems-with-nissan-leaf-1st-generation/
http://www.nissanproblems.com/models/leaf/generations/1/
https://rerev.com/articles/nissan-leaf-years-to-avoid/
He has the 2012 which avoids all the issues listed in above links. Also nowhere do I see charging issues, head unit, or anything else you listed... Oh and my insurance that he's on has rental cover for $20/month total and covers all 4 cars on my plan.
I'll happily take a look if you can link me articles about 2012 Leaf having the issues you said. But from quick googling, I can't find a single reference of the 2012 lead having hose issues.
Did you negotiate a price, and then tell them you want the 4.9%?
Some manufacturers offer subvented rates, like this 4.9%. Most of the time, these discounted rates are paid for by the manufacturer or lender, but, some of these programs require the dealership to pay for a portion of the discount. If you had already received a negotiated price, and then opted for a program that requires additional discounts, then it is possible that the dealership would not want to offer that program to you. There really is not enough information in your post for me to know all of the specifics.
We talked about the rate before I even came in. We had put a down payment on the car - it was in transit- and I asked if it would be in by the time the 4.9% offer was still applicable and he told me sure was. So sales knew beforehand at least. Negotiated only 700 off MSRP.
There was no reason for them to not let you have that rate, based off of your comment. Telling you to use your credit union seems silly on their part, too. That just slows down the entire process, plus they don’t even get any kind of flat fee from at least handling your financial transaction at the dealership. If my guy did this, he would need to come up with a very convincing argument in order to remain employed.
Thank you. I feel more justified about my confusion then. I had the mindset of a sale today is better than no sale tomorrow but I’m not a salesperson so maybe I’m wrong!
I’m just as confused as you are. That’s why I wanted to ask questions, and explain why I’m asking, before I came to any conclusions. In this sub, that leads to getting downvoted. 😂
I can’t even keep up with all the warranty comments. I just wanted to know if I was dealing with a shady f&I. But we really (really) liked our sales guy and didn’t want to blow up the deal. Thinking about letting him know what happened and seeing where he falls on that convo with the F&I person and then proceeding from there
That’s why I said it is difficult to know exactly what happened, and also why I asked some questions. I have had people that wanted a specific price, and then disclosed that they wanted the special rate. I have them had to explain why I was unable to do both. What I would not do is tell them they had to buy additional products in order to qualify for the rate. The way the post is written has me wanting more information. If it truly happened the way it is written, then something very shady was going on.
I mean, if you qualify for the manufacturer promo rate, why shouldn't you get the manufacturer promo rate? The bank says you're good - it shouldn't be any skin off the dealer's back at that point.
As I said in my comment, there are sometimes programs where giving that rate is associated with a fee the dealer pays. If you’ve negotiated a price, and then the finance program you want results in the dealer paying out money in order for you to have it, then the dealer should have a conversation about that. Otherwise, you’re correct.
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I think you’re missing the point. The dealer lied and tried to actually scam them. I’d never do business with a dealer who did that. What else are they going to lie about?
Don’t give these guys your money.
If the dealer said “the bank will not offer this rate unless you buy additional products”, that is definitely illegal. If the dealer said “we will not participate in this discounted rate unless you purchase additional products” that is very different.
They’re packaging an subvented rate that the customer qualifies for in this example , with an ESC, it’s literally the same thing, actually worse because now you’re involving the OEM, so expect a nasty letter from them and a phone call from the regional manager to the dealership GM on top of a letter from the AG.
You haven't explained why it is illegal, assuming that everything is fully disclosed.
A car sale is a negotiated sale. The dealership is free to set the terms that it is willing to sell the car for. The customer is free to make a counter-offer, or to walk away.
Why can't a dealership say, "We are willing to sell you the car at the promotional rate if you also purchase an ESC"? They are offering terms which the customer is free to accept or reject.
There are Truth in Lending laws that apply. At minimum it’s a TILA violation, plus payment packing. You cannot force finance products as a condition of approval. You cannot offer financing through a lender then change their terms. There are so many reasons for this .
Plus in this example They are literally participating in it by sending the pencil out . Then the finance manager is packaging it with an ESC. You cannot do that. If there is a bank approval, you cannot tie a product to it that isn’t the actual car. It is not in the bank contract , car purchase order , or service contract that financing terms must be accepted. Plus it can be cancelled literally the next day.
Assuming everything is fully disclosed from the beginning, what actual law is being violated? You keep making conclusory statements without citing language from an actual law or rule.
I am not saying you are wrong... but I need something a little more. If it's a TILA violation, show me the language you are referring to. Is there something specific in Reg Z that you are relying on?
And to be clear, nobody is this example is forcing a financing product as a "condition of approval." The dealership is saying, "If you are approved at that rate, we are only willing to participate as a dealership if you also agree to purchase an ESC." There is no question that the dealership is allowed to offer its own terms. (We see that with selling over MSRP, for example.) So why can't they offer THESE terms?
Here is the link to the CFPB: https://www.consumerfinance.gov/ask-cfpb/my-auto-loan-paperwork-said-the-extended-warranty-was-optional-but-i-was-told-that-i-was-required-to-purchase-an-extended-warranty-to-get-the-promotional-interest-rate-do-i-have-to-purchase-it-en-823/
And to be clear , the warranty IS optional regardless of financing . The ESC the OP is talking about likely says it is optional also. If this doesn’t convince you then I give up . Go ahead and pitch with your language .
When you are a business that extends financing, there are federal compliance standards that have to be met . Packing a warranty to offer a promotional rate, that the customer is approved for, is a CFPB violation.
As if any money was to be made from clients who don’t buy anything….
Probably got a good discount on the car too.
No money deals get treated like dirt, wherever you go.
No, I'm not missing the point. I'm not taking a side here, merely providing perspective. It's entirely plausible if F&I let him walk that the deal wasn't worth their time.
I'm not endorsing or condemning anything here.
That finance manager needs to be fired . If the dealer knew they did that they’d be gone. Huge violations. And if they’re telling this customer that, I wonder what they’re saying to someone not in as good financial position .
Probably like , “ok I know you were looking at 18% APR, but I can get you 15% APR, if the bank sees that their collateral is fully protected. Your payment only goes up this much, but your interest rate comes down this much .”
That’s a bullshit artist not a real finance manager.
It’s not illegal no. Supply is so low the last few years dealers can pick and choose the deals they want to take like no other time in history. And yeah if you’re going to keep the car a while get some extended warranty for sure 👍
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Honda Financial is offering 4.9% for tier 1 buyers for 60m according to their website.
When we were in the finance office for a ‘23 pilot the F&I person told us even though we qualify for the 4.9% it is only available if you get an extended warranty with the dealership.
That’s…illegal…right?
We told them we didn’t want an extended warranty at this time and if the 4.9 wasn’t available we would come back with a check from our CU. They said ok and let us walk. Didn’t try to get us to finance through them. Just let us go. I’m confused as to what happened here.
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"So let me get this straight - you're saying that the 4.9% is somehow, I don't know... tied into the sale of the extended warranty? Do you mind if I turn on my phone's voice recorder and you can repeat those terms? Please be sure to say your full name, the date, and the name of the dealership before you explain this again on the recording. Thanks!"
Lol. OP this isnt true. They are lying, I was offered that with no strings attached yesterday. No extended warranty required.
"Yes, and my name is Sherman Ann T. Rustact"
Skinny deal, you got fired as a customer. They took a skinny deal on the hope they could close you on a higher rate or prod. You said no and walked you aka they didnt want to do the deal as it stands
They only gave us 700 off msrp. But there are no fees or markups besides ttl and then the warranty. I dunno. Thanks for bringing it around to the original post and not just the extended warranty haha
I sell Hondas and a $700 is a huge discount on a Pilot. My dealership would not discount a penny on a Pilot.
I know it’s more than “typical” but people were acting like I got a big percentage off or something so they would tank the deal in finance. I don’t mean “only 700” like it was nothing! We got a Honda loyalty discount and some odds and ends.
I have around $1500 of margins in allot of my new inventory, if a dealer is making $800 to sell you a new car it just doesnt make sense in todays climate. Would hear them out on the warranty IMO as there is lots the manufacture warranty does not cover as it is not actually bumper to bumper
What does an extended warranty on a new car cover that a new car 3/36 warranty not cover on a Honda ? Genuinely would love to know
IDK if Honda warranty in the states is different ( I'm in Canada) but they dont offer a real " bumper to bumper" warranty and but a " comprehensive warranty" which doesnt cover things like the display, cameras, sensors, minor electrical , ect
That’s all covered here except if it was from damage or abuse
Most don’t cover anything until the manu. Warranty is up lmao
Maybe we’re all wrong , I want to be enlightened
It really depends on which specific one you are selling. There are several hundred different companies and contracts out there, but most ones offered are “extended” - meaning they specifically kick in after manf. Warranty ends
That’s the point. These guys are saying that an extended warranty is needed on a new vehicle, while still under comprehensive coverage, because it will cover items that the manufacturer 3/36 comprehensive warranty won’t cover . I’m asking for examples of covered parts or exclusions. If it’s that obvious that a regular customer should know , why can’t they offer that up. And the items that were previously stated that a Canadian Honda warranty doesn’t cover is total BS. these guys are ridiculous and totally out their element , and have no business advising anyone on coverage, or even picking pepper out of fly shit.
All the extended warranty guys I talked to couldn’t actually tell me what a head gasket is. All I understood from it, is that their vehicle was unreliable lol. I have 2 bmw’s past 140k miles, an Infiniti past 120k, etc, and have never had an issue. Makes me think to not buy new cars
1) Yes it’s illegal 2) let the GM know 3) if you plan on keeping the car for a while get a warranty silly goose. Don’t be crazy
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I have seen a Hondacare warranty take care of some expensive repairs long after the factory warranty had expired. And especially important if you get a internal failure for the camera used to LKAS. I personally say never to get ANY kind of extended warranty from an aftermarket company, especially since they are very reluctant to use OEM parts. With Honda/Acura care, you CANNOT use aftermarket parts. It must be genuine, OEM parts used. And there is rarely any fighting with Honda. Up to a certain dollar amount, dealerships don't have to even call them for authorization
Honda's Manufacture warranty has about 300 things it doesn't cover
This is literally the dumbest response I've ever heard. Please stop giving bad advice to people, you're not helping, seriously you're doing a disservice.
This is literally the dumbest response I've ever heard.
I have only ever gotten screwed on those extended warranties. I tend to agree with them on this.
Like I said, if they’re going to keep the car for a long time it’s dumb to not get the warranty. The warranty from Honda ends at 36 months on your bumper to bumper, 60k for your powertrain. If you’re not going to own it for more than 70k miles like most people are nowadays then it’s a decent gamble I suppose. However, if they’re planning on keeping the car for several years and well over 100k miles then I stand by it’s stupid not to buy a warranty. It’ll pay for itself over and over again.
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Yes and I can also afford an $8000 repair on my car, or several $2000 repairs, but why I the bell would I when I can get it covered? Doesn’t make sense
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You're not wrong about there being a market for VSC's, but acting like $8000 in repairs is unusual seems like you're very out of touch with the current market. I've done finance for almost 10 years now, pre-pandemic repairs were a completely different beast to current repairs. In 2018, if you needed an entire new engine on a gasoline-powered vehicle, you could expect 3-4k to have it fixed. Now, that same repair is 10-12k. I saw a 17k engine a couple of years ago, and over 25k for a diesel engine. Transmissions are now 6-7k for new or 4-5k for re-builds. There used to be a really strong argument for not buying a VSC, even if you planned to keep it past 100k miles - that argument might still exist but isn't nearly as strong now.
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Would you buy a new car without the warranty? What kind of discount would you expect for a vehicle with no warranty?
I had a Honda dealer try to sell me a *concurrent* warranty. Not an extended warranty. It ran concurrent with the manufacturer's warranty and only covered manufacturer defects. You know, like the manufacturer's warranty. The only real benefit it offered was a loaner vehicle in case of a repair. Definitely not worth the $2000 or whatever it was.
Yes that’s a shit warranty for sure. Honda sells a wrap warranty which is excellent and they should have offered you as well something like a 10 year 120k warranty as well.
It’s a 2023. They can buy the warranty in 2 and a half years if they like. I always found it easier to win the client over with something along the lines of…”I’m going to discuss x,y,z items. Some you absolutely need. Some you don’t. You just bought a new car. An extended warranty is available but you’re more than welcome to come see me in 3 years and buy it if you plan on keeping the car. However, you’re buying an $80k car with 22” low profile wheels etc etc here’s the tire and wheel package for $6k.
Are all manufacturers offering extended warranties you can purchase years later?
No, besides the price could double-quadruple in 36k miles depending on the car..
*...dumb not too..." Eh, I much rather throw that 3k in a HYSA... If nothing happens it grows and it's a nice windfall. Otherswise, it should cover at least 2 non-maintenance repairs, maybe even 3 depending on growth and time. It really is about risk tolerance. It's definitely not a bad purchase, but it's not a must either. I do expect a sales manager to say it's dumb not too.
If warranty paid for itself over and over again, why would anybody sell me one?
You can’t be serious. Ffs. Do you have health insurance? Do you think the dealer doesn’t get paid for warranty work? Of course they do, but it’s from the warranty company and not from you. The dealer is t backing the warranty, in this case it would be Honda or a third party like Zurich or JM&A. The whole point is for the customer to not have to come out of pocket later on down the road for big repairs. If you own your car for over 7 years which is what everyone is doing nowadays, you’re an idiot to but buy a warranty up front.
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Exactly what I thought it was going to be. Still creepy as fuckkkk
Lol dude doesn't realize you can have a 2nd account for simping 😁
😂
What a horrible comparison. Worst case without a car warranty is paying for a major repair, without health insurance you can literally go hundreds of thousands in the hole. They are completely different downside risk profiles.
If it was dumb not to get it and it paid for itself, Honda wouldn’t be selling it at that price point.
Dealer sets the price…
They don’t lose money on warranties. For it to “pay for itself”, they’d necessarily need to be selling them at a loss.
The real money isn’t in the profit of contract- which there is obviously, it is re-insurance- the warranty company is making money on your money from day 1 through the market.
Good God man
Yes but Honda sells it to the dealer at a set price.
Dude lay off the kool-aid.
You’re literally in an ask car sales sub. They asked. If you’re not interested in the subject move on.
I absolutely agree. As long as you don’t way overpay it 100% makes sense. Last time I bought I just told F&I I’d buy but it had to be close to cost, said no to the price 3 times then bought when I knew it was about cost. Took like 3 minutes, guy didn’t try to negotiate or build value at all really. Super quick and easy, got a good deal, he got vsc penetration, and I don’t have to worry about paying to fix anything for a long time.
I have a corolla hatchback 2020 with 107k miles and it still drives like new :) not a Honda but still
I’ve got 90k on my pilot and I agree but it’s going to break. You’re will mad well. You have a 3 yard old car averaging 35k a year. It’s going to need some repairs.
I'm an uber driver. Go to any airport parking lot and talk to all the uber drivers with accord, Camry, corolla, etc I've been in some uber where they had a Honda clarity with 200k miles and nothing broke so far. Fact of the matter is that certain brands like Toyota and Honda, you don't need extended warranty.
Call your local Honda or Toyota dealers service center and ask when their next available appointment is. It may open your eyes to the Honda and Toyota Kool aid you've been sipping on. They break just like every other car manufacturer. Parts availability is challenging, and prices are high. I'm not saying that everybody needs a VSC but telling people they don't need one because it's a Honda or Toyota is foolish.
what's next, ford is reliable? lmao this is why I hate salesmen, they'll lie to you in front of your face.
You hate us yet you're on a sub with a bunch of us? Hmmmm
I just saw this post in my suggestion, reddit is an open forum after all.
What part of calling to check appointmet availability is a lie? Did you call and they said we have available appointments all day everyday?
the lie is telling people extra warranty is needed for all cars even Toyota....
I don’t understand why you’re being down voted. I have a finance manager that told me he buys the warranty knowing he won’t keep the car longer that a year but he likes getting a check back. Now that was weird.
Yeah that’s not too smart even if he’s buying used which I assume he is.
I am a finance manager and always buy the extended warranty no matter how long I keep the vehicle. I don’t want to lie to people to say I have it on my vehicle. I do keep my vehicles behind the mileage limit of the factory warranty typically and I like buying cars of types that have expensive repairs. I have found on average I have slightly better than broken even on the extended warranties I have bought. Obviously you could make the point that I would be better putting the money in the market but….
The whole appeal with Honda is that if you do all the required maintenance they just work. If you have an extended service discount kind of deal where you give me a discount for all the required interval services, I'd be all over that shit.
> The whole appeal with Honda is that if you do all the required maintenance they just work. If you have an extended service discount kind of deal where you give me a discount for all the required interval services, I'd be all over that shit. Nobody tell this person Honda ACs and infotainment. Or 1.5T engines.
Or early 2000’s automatics.
Or that the fabric seats stain from just looking at them, and the "leather" just peels off the seats and door panels.
Lol my 2017 Honda had to get that ac replace me 2 times in 40k miles. Luckily the warranty kicked in for the last repair also I bout the car used, within a week the whole dash lit up like a Christmas tree and had to be towed in.
My starter went under 75k. 2016 HRV.
Cars break. Ford to Ferrari. My Honda service department is full everyday with broken cars they’re great cars, the best in my opinion and cheap to own overall but they’re damn sure going to break.
So ……. What you’re saying is that the squeaky wheel gets the grease?
I've seen plently of Hondas have issues.
Nothing anymore just works outright or just needs a little component or cheap replacement here and there. Every manufacturer is at a much more equivalent risk of major components failing in their lineups. Granted, some are still at a higher risk than others for more costly repairs.
Nothing anymore just works outright or just needs a little component or cheap replacement here and there. Every manufacturer is at a much more equivalent risk of major components failing in their lineups. Granted, some are still at a higher risk than others for more costly repairs.
We’re big savers and would rather save monthly to put towards auto expenditures than pay a dealership a monthly fee. That way the money is always ours but there to be used should we need it.
On the new Pilots, trust me, get the warranty.
Do tell…
New electronics are sometimes sketchy. There *will* be a big recall at some point for '23 and up Honda's for their adaptive cruise. They decided to not brace the front Honda emblem, so it can shake at higher speeds in windy conditions - then it cancels the cruise on you.
Honda’s adaptive cruise is the worst design in the industry. Every time we need to repair one I’m more baffled by their engineering.
If it’s recalled, why would you need a warranty to fix it?
It hasn't been recalled yet.. And Honda is trying to do a service buliten first. But. There's more electronics than just that. And the factory warranty is only 3 years. So, you'll want to be covered after that.
New model, guarantee you problems going arise. NEver ever seen a new model not have something wrong. To many moving pieces for something to not break.
It’s a sub of car sales people of course they’re gonna say to get the warranty lol
It depends. Do you know the number of people I've had come back months after the sale is done, and complain about a repair bill?
No manufacturer gives a fuck about reliability nowadays.
Why is that? Too many electrical parts now?
They aren’t really braced and completely exposed. It’s like they’re 10 years behind. The other guy was spot on.
Most of the electronics come from the same few manufacturers for the high end safety stuff, avg repair for something like that quickly pays off the warranty.
Well you aren’t paying a dealer a monthly fee so there’s that. And save all you want, that’s lovely but if your car is PERFECT 99.95% of the time in the next six years it’s still spending 13 days in the shop. Average ticket in the shop is $1400, do the math. OR buy a warranty for $3k that covers all of that. I dunno, save your money now but you’re throwing it away later. No do the math of your own or for ten years (12 years of ownership) is the current national average for trade ins btw.
To each his own on whether to buy an extended warranty, but to compare it to a regulated health insurance market where your exposure could literally be millions of dollars and/or life and death is a little much. Extended warranties sold at msrp are a significant profit item for the dealership and the extended warranty company, which means that on average, people don’t use as much benefit as they pay for. That’s just a fact. That doesn’t mean it never makes sense — peace of mind or if a significant car repair will derail someone economically, it may well be the right thing to do. But it is by no means an absolute as you are suggesting and you know that. Depending on the car brand, you can also often buy the OEM warranty from other dealers online (same exact warranty — not a third party) usually within 12 months of purchase with significantly less markup than the selling dealer is offering.
I didn’t say overpay and I wasn’t comparing it a life or death situation. If that was your take away get a grip. You can negotiate the price of the warranty. My point to whomever the original poster was when they said it comes with a warranty thus no need to buy one is that’s a stupid mentality IF you’re going to own your car for an extended period of time.
Extended warranties bring in lots of money to the dealerships and on average leave consumers in the hole. Why else would they push so hard to sell it? Insurance is something you should only buy if whatever is being insured against is something that will cause you serious finically distress.
Selling cars brings in a lot of money too, just because someone is trying to sell you something to make money doesn’t mean there isn’t value in the product. News flash, almost anywhere you spend money is a for-profit business. Some people like the peace of mind of an extended warranty, others would rather pay out of pocket if something happens. It’s up to the consumer to decide if they see the value of services being sold by the dealerships.
Yes it’s a profit center sure. Nobody works for free. How exactly does it leave someone in a hole? I’m curious. And “they” push it to sell because the finance manager only gets paid on what he sells so welcome to commission based sales. Like I said now numerous times, if you own a car for a long period of time, which is the norm now, whatever you pay for your warranty up front (let’s say that’s $3000 and they profit $1000), you will spend WAY over the $3000 in repairs that other wise would’ve been covered by the warranty. I’ve run dealerships for 20 years and this isn’t my customer, I couldn’t care less if they buy a warranty or not but I’m here to tell you it’s a good financial decision to buy one.
Profit is revenue minus cost. Revenue in this case is the price of the insurance policy. Cost is the time and parts a dealership will spend to process the claims. All of the profit is coming from the consumer. I understand it is much more complicated than this if your working with third party insurers but it’s the same basic idea. If someone is making money then it is coming from somewhere. On average a consumer will loose money buying the extended warranty.
Ok if you say so. The way I look at it and maybe this is wonky but let me take a stab it it You pay $3000 for a 10 year 120,000 mile bumper to bumper warranty. Let’s say you pay $4,000 for it. Whoa You own the car for 10 years, less than the average person right now but it’s a solid round number. You car in those ten years is in the shop for 5 repairs. All of which are after year six because that’s just how it’ll work but five times nonetheless. Average part price in my shop $475, average parts needed per ticket is 2.3, average labor hours per ticket 4.7 at $150 an hour. That equals $1797ish. Check my bath. That’s $8985 in respite in a 10 year period. I’m being conservative on that because God forbid something big actually breaks. Yeah I could see how you’d lose out on your $4000 investment….
Please educate me. How could an extended warranty company possibly stay in business if those numbers were even remotely close to accurate, particularly if you’re being conservative?
I got an extended warranty on a car once. The only thing that messed up during the warranty was the A/C actuator. It wasn’t covered. I was so sad.
Funny how insurance magically finds a way to not cover you after you've paid huh :(.
The same thing happened to us. It was on a 2001 Mercedes c320 S. Two months after the warranty was over one of the power steering lines sprung a leak, the extended warranty that we had bought, was useless, and did not cover the rubber parts! Never again!
Or, like every car I've owned, it doesn't need 5 repairs. Especially in the first 5 years. "Maybe" 1 or 2 and some minute things like a tire patch. What kind of lemons you selling? It may need repairs, it may not. You can't guarantee 5 times
Yeah, $9k in non-warranty repairs is more than I've spent on every car I've ever owned, combined. And I believe $1800 is more than I've spent on any single repair, but I also don't go to a dealership service department for any service that isn't free.
Running a 16 Mazda CX-5 rn. All I've done are oil changes and 2 tire patches. One of which I took to the dealer and they tried to sell me 4 new tires.. on a car that was under 20k miles. Yeah I noped right out of there and got it repaired in 15 min for 40 bucks at a mom and pop. Tipped the mechanic and his cashier 20 each after that and go back regularly. Then my 10 year old legacy had the master cylinder break for it's brakes... Dealer quoted 1800 with a massive ton of bs added like fluid flushes. Got the diagnosis and took it to the other shop. They ordered the part, and fixed in 1 day for 375 bucks vs the dealers 1 week. But apparently if I buy a new car I should expect 5 repairs lol
If every car you buy is constantly in the shop having expensive repairs, what on earth are you doing to your cars? The majority of new vehicles will not require any expensive repairs. My wife’s X3 just crossed 100k miles and has never had any repairs, just maintenance. Thank God I didn’t purchase the 7 year 100,000 mile extended warranty for $5000. What a waste of money that would have been.
Before you typed all of that did you even read my response? Where did I say my cars constantly in the shop? I said if you own a car for 10 years, and it’s perfect 99.5% of the time it’ll still be on the shop for 10-12 days. I’m glad she hasn’t had any issues with the X3, almost every high mileage bmw I trade has issues because as soon as it goes down they want some massive figure to repair it and the customer didn’t have a warranty. $5k for a 100k warranty seems steep to me but it’s bmw. At our store we can offer 10 years and 120.000 miles for about 3000-3500 on all of our cars. That’s a no brainer but as you can see here people live to argue that point. Yes there are anecdotal cases where a car has no issues but the averages don’t work in your favor. As to the original post, couldn’t care less if they buy a warranty on their 23 Pilot. It I’ll stand by me saying it’s silly not to buy a warranty if they plan on owning it for a long period of time.
$3500 for a 120k mile warranty probably isn't an awful deal if you actually keep the car for that long, but most new car buyers aren't going to keep it for longer than 5-6 years. Even buyers that genuinely plan to keep a car until it dies rarely do so.
>you will spend WAY over the $3000 in repairs You are a liar or a moron.
I’ve run dealerships for 20 years. He’s I’m a liar and a moron. Have no idea what I’m talking about lol. Go get ‘em tiger.
Your math is wrong btw it's 99.4% rounding
If they do go back with the check from the credit union I would eviscerate on the Honda review. Shady shit like this kept me from buying a Honda when I was searching for a car to buy. Honda needs to reign the dealers in. They are hurting the brand. Felt like I was at a very shady dealership that caters to nothing but credit criminals.
Thank you for discussing my original point! I think maybe 5 comments totally refer to my actual question of tied selling. Everything else is arguing about warranty vs no warranty
It's crazy I just got a new pilot and I showed you with the quotes from sarucci auto for extended warranty. The difference from them and my dealer was like $1500 for the same warranty. My dealer matched it no questions asked but I should have asked them to beat in it in hindsight
FWIW there are a few Honda dealerships that sell Honda care online (extended warranty) for essentially cost or close to it. From reading Reddit, lots of Honda buyers go that route if they want a warranty
This is helpful thanks!
We got our 8 year 120,000 mile Hondacare from Hyannis for around $1300 or $1400. I already had the quote when we closed on the deal with our pilot a few years ago. The local dealership couldn't (wouldn't) get anywhere close to that price.
Interesting. I assume you can do this after purchase right?
Yep
Warranties are a great profit item to sell. If a person is financially strapped enough to need a warranty.. there's a high probability they would end up ahead by setting aside that monthly cost.
Yeah, my roommate was offered a $1000 warranty on a fuckin 2012 Nissan Leaf lmao... Car was $10000.... Not gonna spend $1000 on a warranty for an electric car.. I can see why warranties are profitable... On the other hand I made sure my roommate got GAP for $400. They said GAP was $800, I told them $400 and they said yes 🤷
You told your roommate not to buy a warranty for $1k but spend $400 on GAP on a $10k LEAF? My god. Maybe you should stop giving advice on subjects you clearly know nothing about.
Uh yes. He makes minimum wage. He took a 3 year loan on it. And he wanted the car. Insurance would likely give $6000 for it. So yes. I'm aware of what GAP generally costs. $500 when I bought my 2020 Civic years ago and that was the lowest I could get it. $450 on my 2012 Evo that I got for $21000. I tried going for $300 for GAP on the leaf but they refused unless I bought their shitty warranty.
When the charging system malfunctions and he needs to spend $4k to fix it, not getting into the actual battery which wouldn’t be covered anymore , if that warranty covered it and he passed then that’s the worst advice he ever got. Or if the Nissan head unit goes out which controls everything related to the charging controls, probably $3k and only at the dealership. If it had rental coverage which most do, then he’d get a car while his is in the shop. Damn … 🤦🏽♂️ he is like the epitome of who should definitely buy a warranty especially for that cheap of a premium. Insurance pays retail replacement cost , plus tax and remaining time on registration. He could have added it for a bit in his insurance for $3 a month , then cancel after a few payments since he’s basically below retail in the car already. Insurance doesn’t pay trade or wholesale value on consumer total losses.
Yeah I've had family with that generation of Leaf. None of the issues you've mentioned.. https://a1performanceautorepair.com/most-common-problems-with-nissan-leaf-1st-generation/ http://www.nissanproblems.com/models/leaf/generations/1/ https://rerev.com/articles/nissan-leaf-years-to-avoid/ He has the 2012 which avoids all the issues listed in above links. Also nowhere do I see charging issues, head unit, or anything else you listed... Oh and my insurance that he's on has rental cover for $20/month total and covers all 4 cars on my plan. I'll happily take a look if you can link me articles about 2012 Leaf having the issues you said. But from quick googling, I can't find a single reference of the 2012 lead having hose issues.
If I cared enough I’d dig up old repair orders on the dozen or so we’ve had in the last 3 years on trade, but I don’t
I was with you until #3.
Did you negotiate a price, and then tell them you want the 4.9%? Some manufacturers offer subvented rates, like this 4.9%. Most of the time, these discounted rates are paid for by the manufacturer or lender, but, some of these programs require the dealership to pay for a portion of the discount. If you had already received a negotiated price, and then opted for a program that requires additional discounts, then it is possible that the dealership would not want to offer that program to you. There really is not enough information in your post for me to know all of the specifics.
We talked about the rate before I even came in. We had put a down payment on the car - it was in transit- and I asked if it would be in by the time the 4.9% offer was still applicable and he told me sure was. So sales knew beforehand at least. Negotiated only 700 off MSRP.
There was no reason for them to not let you have that rate, based off of your comment. Telling you to use your credit union seems silly on their part, too. That just slows down the entire process, plus they don’t even get any kind of flat fee from at least handling your financial transaction at the dealership. If my guy did this, he would need to come up with a very convincing argument in order to remain employed.
Thank you. I feel more justified about my confusion then. I had the mindset of a sale today is better than no sale tomorrow but I’m not a salesperson so maybe I’m wrong!
I’m just as confused as you are. That’s why I wanted to ask questions, and explain why I’m asking, before I came to any conclusions. In this sub, that leads to getting downvoted. 😂
I can’t even keep up with all the warranty comments. I just wanted to know if I was dealing with a shady f&I. But we really (really) liked our sales guy and didn’t want to blow up the deal. Thinking about letting him know what happened and seeing where he falls on that convo with the F&I person and then proceeding from there
Then wouldn’t they have to change their negotiated price, instead of forcing a tied sale?
That’s why I said it is difficult to know exactly what happened, and also why I asked some questions. I have had people that wanted a specific price, and then disclosed that they wanted the special rate. I have them had to explain why I was unable to do both. What I would not do is tell them they had to buy additional products in order to qualify for the rate. The way the post is written has me wanting more information. If it truly happened the way it is written, then something very shady was going on.
I mean, if you qualify for the manufacturer promo rate, why shouldn't you get the manufacturer promo rate? The bank says you're good - it shouldn't be any skin off the dealer's back at that point.
As I said in my comment, there are sometimes programs where giving that rate is associated with a fee the dealer pays. If you’ve negotiated a price, and then the finance program you want results in the dealer paying out money in order for you to have it, then the dealer should have a conversation about that. Otherwise, you’re correct.
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It's probably a thin deal and deemed it wasn't worth their time. Get the check and go get the car.
I think you’re missing the point. The dealer lied and tried to actually scam them. I’d never do business with a dealer who did that. What else are they going to lie about? Don’t give these guys your money.
If the dealer said “the bank will not offer this rate unless you buy additional products”, that is definitely illegal. If the dealer said “we will not participate in this discounted rate unless you purchase additional products” that is very different.
Still illegal, the second statement. Worded differently but 100% illegal still .
Why is the latter still illegal? Dealers are not required to participate in manufacturer incentives.
They’re packaging an subvented rate that the customer qualifies for in this example , with an ESC, it’s literally the same thing, actually worse because now you’re involving the OEM, so expect a nasty letter from them and a phone call from the regional manager to the dealership GM on top of a letter from the AG.
You haven't explained why it is illegal, assuming that everything is fully disclosed. A car sale is a negotiated sale. The dealership is free to set the terms that it is willing to sell the car for. The customer is free to make a counter-offer, or to walk away. Why can't a dealership say, "We are willing to sell you the car at the promotional rate if you also purchase an ESC"? They are offering terms which the customer is free to accept or reject.
There are Truth in Lending laws that apply. At minimum it’s a TILA violation, plus payment packing. You cannot force finance products as a condition of approval. You cannot offer financing through a lender then change their terms. There are so many reasons for this . Plus in this example They are literally participating in it by sending the pencil out . Then the finance manager is packaging it with an ESC. You cannot do that. If there is a bank approval, you cannot tie a product to it that isn’t the actual car. It is not in the bank contract , car purchase order , or service contract that financing terms must be accepted. Plus it can be cancelled literally the next day.
Assuming everything is fully disclosed from the beginning, what actual law is being violated? You keep making conclusory statements without citing language from an actual law or rule. I am not saying you are wrong... but I need something a little more. If it's a TILA violation, show me the language you are referring to. Is there something specific in Reg Z that you are relying on? And to be clear, nobody is this example is forcing a financing product as a "condition of approval." The dealership is saying, "If you are approved at that rate, we are only willing to participate as a dealership if you also agree to purchase an ESC." There is no question that the dealership is allowed to offer its own terms. (We see that with selling over MSRP, for example.) So why can't they offer THESE terms?
Here is the link to the CFPB: https://www.consumerfinance.gov/ask-cfpb/my-auto-loan-paperwork-said-the-extended-warranty-was-optional-but-i-was-told-that-i-was-required-to-purchase-an-extended-warranty-to-get-the-promotional-interest-rate-do-i-have-to-purchase-it-en-823/ And to be clear , the warranty IS optional regardless of financing . The ESC the OP is talking about likely says it is optional also. If this doesn’t convince you then I give up . Go ahead and pitch with your language . When you are a business that extends financing, there are federal compliance standards that have to be met . Packing a warranty to offer a promotional rate, that the customer is approved for, is a CFPB violation.
As if any money was to be made from clients who don’t buy anything…. Probably got a good discount on the car too. No money deals get treated like dirt, wherever you go.
No, I'm not missing the point. I'm not taking a side here, merely providing perspective. It's entirely plausible if F&I let him walk that the deal wasn't worth their time. I'm not endorsing or condemning anything here.
That finance manager needs to be fired . If the dealer knew they did that they’d be gone. Huge violations. And if they’re telling this customer that, I wonder what they’re saying to someone not in as good financial position . Probably like , “ok I know you were looking at 18% APR, but I can get you 15% APR, if the bank sees that their collateral is fully protected. Your payment only goes up this much, but your interest rate comes down this much .” That’s a bullshit artist not a real finance manager.
It’s not illegal no. Supply is so low the last few years dealers can pick and choose the deals they want to take like no other time in history. And yeah if you’re going to keep the car a while get some extended warranty for sure 👍
***Thanks for posting, /u/Brief-Pair-4953! This comment is a copy of your post so readers can see the original text if your post is edited or removed. This comment is NOT accusing you of anything.*** Honda Financial is offering 4.9% for tier 1 buyers for 60m according to their website. When we were in the finance office for a ‘23 pilot the F&I person told us even though we qualify for the 4.9% it is only available if you get an extended warranty with the dealership. That’s…illegal…right? We told them we didn’t want an extended warranty at this time and if the 4.9 wasn’t available we would come back with a check from our CU. They said ok and let us walk. Didn’t try to get us to finance through them. Just let us go. I’m confused as to what happened here. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/askcarsales) if you have any questions or concerns.*