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Discussion Starter · #1 · (Edited)
Why am I writing this post:

Back in 2015, VW got caught cheating on Diesel emissions on what became Dieselgate. At the time, there were several options on how to deal with the cars sold. One of them was for VW to buy back their cars. I had at the time, a 2010 Jetta Sportwagen TDI and a 2013 Jetta TDI. I decided to sell the cars back to VW and get a 2015 Golf Sportwagen TDI and a 2015 Jetta TDI. When I went to the dealer, the Sales Manager asked me “How much are you looking to pay per month in total for both cars?” I answered, “I can do about $700.00 per month”. That was a mistake that I regret to this day.

To make a long story short, the Finance Officer at the dealer, included a Service Agreement and a paint and interior protection package that I did not want, in the deal. After a 72-month financing at 4.75% APR, the total monthly payment amount for both cars was around $710 a month. The Finance Officer was very proud of his accomplishment. I told him that I didn’t want to pay the extra Service Agreement and a paint and interior protection. He said, “you said you wanted to pay about $700 a month and I made it happen.” After making me feel stupid and ignorant for not wanting to the “extras” I signed the agreement and got a loan for things I did not want.

Later on, I cancelled the Service Agreements. The money went to both loans as a payment and then I refinanced at 2.19% making my monthly payments less than $700 for both cars. Unfortunately, I was not able to cancel the paint and interior protection. Till this day, I have never used it. That was $2000 down the drain.

I promised to myself never ever to buy a car again from that dealership and, like the Rhyme of the Ancient Mariner, I bound myself to tell my story wherever I go. (see video below)

I hope this helps you as much as it has helped me.

I. Before you head out to the dealer

Make your appointment to pick up the car on a non-holiday weekday as early as possible. If the dealer is marking up the car price, call VW CARE immediately at 1 800 822 8987 and report it.

1. Get advice on the dealer buying process from Marco at WhiteBoard Financing on YouTube (videos to watch below).​
NOTE: Marco can be a little condescending. Don’t be put off by it. He does have great advice.​
2. Get your FICO credit score:​
a. Head out to myFico (www.myfico.com) and sign up for the Premier monthly plan so you can get your 3-bureau Fico score. Make sure that you cancel the monthly subscription right away, otherwise you will be charged again the subscription fee.​
b. There are free services where you can get your Vantage score like Credit Karma and Credit Sesame. However, Vantage score is not the same as the FICO score but it can be an approximation.​
3. Get pre-approved for an auto loan:​
a. Go to Volkswagen Credit (finance.vwcredit.com), your local Credit Union (If you are a member of the Military, check out Navy Federal [www.navyfederal.org] or PenFed www.penfed.org/auto) or your current bank and get pre-approved.​
b. Check current national special financing offers here:​
c. DO NOT fill out a credit application at the dealership. (Section III bullet 3 below tells you when to do so)​
4. If you are going to do a trade-in:​
a. Go to Kelly Blue Book (www.kbb.com) and NADA (www.nada.com) and get the fair price for trade-in or selling private of the vehicle you are trading in.​
b. Search on TrueCar, Cars.com Edmunds and other online search tools to KNOW what the car you are trading in is selling for at other dealerships in your area.​
For example: The fair trade-in value of the vehicle is $10,000. Dealers in your area are selling the same or similar model for $17,000. That's a $7,000 difference!!!! You can ask for $13,000 for the trade-in. That's a $13,000 down payment right there assuming you don't owe anything on it.​
5. If you are going to put money down, DO NOT tell the dealer till you have the “Out the Door price” FIRST (see below why)​
6. Check with your current Auto Insurance if they offer GAP insurance. You can also check with the Bank, Credit Union and even VW credit, after you do your application for credit, if they offer GAP and how much is it.​
7. Make a copy of your driver's license before your visit and write on the paper. “I DO NOT give you consent to pull my credit”​

II. At the dealer (Realize that the dealer is there to make money and not to be your friend. Also, be fair to the dealer. Dealers make little money on new car sales. You will probably get to meet the Sales Manager and at some point, the Finance Officer is going to introduce himself/herself and ask you questions designed to sell you services you don’t need. This is known as “The Interview” (see video below)

1. Always answer "I don't know" to these questions. Be firm. Knowledge is POWER to the dealership to pull a fast one on you. You are not required to explain yourself to them.​
a. Are you going to lease or finance?​
b. Are you paying cash or doing a down payment?​
c. Are you going to do a trade-in?​
2. For the test drive, most likely they will ask for your driver’s license. Hand them the copy of the driver’s license you made in section I bullet 7 above.​
3. There are 4 things that are non-negotiable, TTL (tax, title and license) and Destination Charge because they are government mandated. Anything else can be negotiated.​
4. Concentrate on the MSRP and don't fall into the "How much are you looking to pay per month trap".​
NOTE: There are plenty of car payment calculators online where you can plug in your known APR and calculate the monthly payments.​
5. Anything other than TTL and Destination Charges, ask to be taken off the MSRP. The dealer makes money off these so-called dealer and doc fees.​
a. For example: MSRP $43,995 - $700 dealer fee - $300 Doc Fee = $42,995 plus TTL and Destination Charge.​
6. Ask for accessories not included in the car for free.​
a. For example: Monster Mats and Cargo Liners (See here for other accessories (2021 VW ID.4 Accessories - VWoA Official Online Store)​
b. Ask, ask, ask. The worse thing that can happen is that they say No.​
7. Get the “Out the Door” price in writing and make sure the extra dealer fees have been taken off the MSRP.​
8. Once you have the “Out the Door” price (take a picture of the paper with your phone).​
9. Now is the time to tell them you are doing a trade-in and/or you are putting cash down.​
a. For the trade-in: if they low ball you, you can always sell the car privately or check with another dealer like Carvana, CarMax, Vroom, etc. and sell your car to them.​
10. Have the dealer do another “Out the Door” price minus trade-in and/or cash down and take a picture of it.​

III. Finance Office (The Finance Office person is the number one salesperson at the dealership. They are there to make sure the paperwork is correct, but also to sell you services, insurance and products. They are very skillful at making you feel stupid about saying no to their offers for extra services).

1. If you already did your homework before going to the dealership, you should already have a quote for GAP insurance. Say no to the GAP unless it is less than what you have been quoted.​
2. Don’t buy extended warranties or service agreements. These are a waste of money. If you get pressured to buy one here are two things you can do:​
a. Ask the finance officer to deduct the cost of the extended warranty or service agreement from the MSRP.​
b. Before getting the extended warranty or service agreement, read the terms and conditions and find where it says that if, you cancel it, they will refund the cost of the service to the loan.​
i. If the price of cost of the service does get refunded, wait till it hits the loan and then refinance the loan because it will be like making a few payments in advance.​
ii. If the price of cost of the service does not get refunded, be firm and say no to the extended warranty or service agreement.​
3. Tell the Finance Officer the lowest rate you got pre-approved for. Ask if they can lower it. Now you can apply for financing at the dealership.​
4. Make sure that the amount financed matches the “Out the Door” price.​
5. Read and understand the loan contract (see video below)​


Videos to watch:

1. How Car Dealerships Rip You Off (The Truth)

2. 7 Car Dealership Rip Offs You Should NEVER Pay For!

3. DON'T PAY CASH AT CAR DEALERSHIPS! (Here's Why)

4. How Much Car Can I Afford (20/4/10 Rule) How Much Car Can I Afford (20/4/10 Rule)

5. “The Interview”

6. CAR LOAN contracts. How to read them so you don't get SCAMMED into paying too much. CAR LOAN contracts. How to read them so you don't get SCAMMED into paying too much.
7. The Rhyme of the Ancient Mariner -
 

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This really makes me appreciate Tesla's buying process.

I always bring this with me to to the F&I office:

2423


As soon as they see you use one of these, they stop playing games. I can loan it out to whoever needs it, just let me know "what you are looking to pay" to borrow it. :)
 

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This really makes me appreciate Tesla's buying process.

I always bring this with me to to the F&I office:

View attachment 2423

As soon as they see you use one of these, they stop playing games. I can loan it out to whoever needs it, just let me know "what you are looking to pay" to borrow it. :)
Is that reverse polish notation calculator? Some college friends try to sell me on why they are better.

@javi_ID4,

Thank you for posting.
 

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I've done that as well with various HP programmables over the years. Get a rate, plug it in, 1-click run the program, read it out to the Finance guy, nonsense ceases. 👍

Always a shame to have to counter games, but at least it was in a way entertaining to me. ;)

This really makes me appreciate Tesla's buying process.

I always bring this with me to to the F&I office:

View attachment 2423

As soon as they see you use one of these, they stop playing games. I can loan it out to whoever needs it, just let me know "what you are looking to pay" to borrow it. :)
 

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ID.4 Pro S Gradient AWD pre-ordered 9/23/2020
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One note I'd give to the advice in the original post. Don't pay for your FICO score. You can get a VERY close approximation of your FICO score with free apps such as Credit Karma that only do a soft pull on your credit (i.e., don't affect your score). Once you know that, and you now have a decent idea of what your FICO is, you should be able to use the power of the internet to find out what a good rate for your credit score range would be (most lenders list tiered rates on their websites, and places like VW will tell you in the fine print what the minimum credit score is to get the advertised rate, as will many other lenders). Once you've identified a lender offering an attractive rate for your credit score range, apply. After you apply the lender is required to tell you your FICO score(s) and what the relevant factors were in deciding your loan application (e.g., length of credit history, open credit lines, payment history, etc.). And, if your FICO is above about 760 and you're not trying to borrow more than about 80% LTV (for example), and your DTI isn't crazy, chances are you'll qualify for the lowest rates available anyway.
 

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One note I'd give to the advice in the original post. Don't pay for your FICO score. You can get a VERY close approximation of your FICO score with free apps such as Credit Karma that only do a soft pull on your credit (i.e., don't affect your score). Once you know that, and you now have a decent idea of what your FICO is, you should be able to use the power of the internet to find out what a good rate for your credit score range would be (most lenders list tiered rates on their websites, and places like VW will tell you in the fine print what the minimum credit score is to get the advertised rate, as will many other lenders). Once you've identified a lender offering an attractive rate for your credit score range, apply. After you apply the lender is required to tell you your FICO score(s) and what the relevant factors were in deciding your loan application (e.g., length of credit history, open credit lines, payment history, etc.). And, if your FICO is above about 760 and you're not trying to borrow more than about 80% LTV (for example), and your DTI isn't crazy, chances are you'll qualify for the lowest rates available anyway.
I am fortunate that I am able to write a check and do not have to deal with financing!
 

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Is that reverse polish notation calculator? Some college friends try to sell me on why they are better.
It is an RPN calculator. It is (was) the go-to calculator in commercial rea estate so learned to use it when I first got out of school. It has its benefits but not sure I was say one system is better than an another. Biggest issue is that I have a hard time using the calculator on the iPhone as I keep messing up the order.
 

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I am fortunate that I am able to write a check and do not have to deal with financing!
Just don't let them know when negotiating (see video 3 above).
 

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Discussion Starter · #10 ·
I am fortunate that I am able to write a check and do not have to deal with financing!
One day, when I grow up, I want to be like you. However, just like @TT97 said, don't let them know you are paying cash. Negotiate like you are going to finance, after you get the "Out the Door" price, you say, "BAM!!! I'm paying cash. Take that!"
 

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ID.4 Pro S Gradient AWD pre-ordered 9/23/2020
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My son was a GM for a large auto dealer in Texas once, and he told me that car dealers make their big profits in financing and extended warranties.
I used to work for a captive automative finance company for many years. Here's what I can tell you. The dealer will run a customer's credit and get them approved. The APR will be, for example purposes, 2%. The dealer turns to the customer and says, "congrats, we got your approved at 3%!" The unknowing customer is happy they got approved for a competitive rate and carries on. The dealer pockets that 1% difference, and many dealers aren't shy about jacking the rate up even higher, it just depends on what they're reading from the customer. It might not seem like a lot, but they're doing it on virtually every vehicle they sell. This is one of the reasons you should always get pre-approved for financing before buying, unless the manufacturer is offering some sort of promo APR.
 

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Discussion Starter · #12 · (Edited)
I used to work for a captive automative finance company for many years. Here's what I can tell you. The dealer will run a customer's credit and get them approved. The APR will be, for example purposes, 2%. The dealer turns to the customer and says, "congrats, we got your approved at 3%!" The unknowing customer is happy they got approved for a competitive rate and carries on. The dealer pockets that 1% difference, and many dealers aren't shy about jacking the rate up even higher, it just depends on what they're reading from the customer. It might not seem like a lot, but they're doing it on virtually every vehicle they sell. This is one of the reasons you should always get pre-approved for financing before buying, unless the manufacturer is offering some sort of promo APR.
Correct. Get pre-approved. Right now, Navy Federal Credit Union is offering 2.19% for loans from 48 to 60 months. If you already financed through the dealer, you can still re-finance at the same rate, plus, they are offering a $200 cash back.
 

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Years ago I financed many vehicles through NFCU. Pre-approved is a big plus! As is refinancing with same if necessary.

In more recent years I bought thru a car buying service like USAA. And getting a guaranteed below-MSRP price from Audi Club No. America.

Many ways to skin this cat. ;)

Actually the most "fun" I ever had at a dealership was back in the early/mid-90's when 'net data was in its infancy (I worked with BBN on one of the first IP router/servers). I was able to get the invoice listing for my Jeep Cherokee and simply told them how much I was willing to pay over same (only a couple Benjamins as memory serves). They were pretty flustered when they saw I had same, stammered and ultimately sheepishly said ok. 😁

Correct. Get pre-approved. Right now, Navy Federal Credit Union is offering 2.19% for loans from 48 to 60 months. If you already financed through the dealer, you can still re-finance at the same rate, plus, they are offering a $200 cash back.
 

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I’ve always gotten financing ahead of time via my credit union. I never want to get dealer financed.

Things that make me walk out:

request for my social security number. They’ll run a credit check and try to up or down sell you.

”I need to go talk to my manager“ for 20 minutes.

Don‘t hand them your car keys. They’ll misplace them to keep you hanging around and wear you down.
 

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3. Get pre-approved for an auto loan:
a. Go to Volkswagen Credit (finance.vwcredit.com), your local Credit Union (If you are a member of the Military, check out Navy Federal [www.navyfederal.org] or PenFed www.penfed.org/auto) or your current bank and get pre-approved.
Hmm. At finance.vwcredit.com they don't have the ID.4 listed when you say what model you are applying for. How can you get pre-approved then?
 

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Discussion Starter · #18 · (Edited)
Hmm. At finance.vwcredit.com they don't have the ID.4 listed when you say what model you are applying for. How can you get pre-approved then?
I did not know. I thought that one of the steps to prepare before picking up the car was to apply for finance with them online. Maybe calling them. Can someone check?
 

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Hmm. At finance.vwcredit.com they don't have the ID.4 listed when you say what model you are applying for. How can you get pre-approved then?
I just picked the top model Tiguan. After the approval went through (30 seconds or less) my approval email arrived. It was cc'd to my dealer.
 
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