Heads-up when you decide to buy a truck

TSexpediter · May 5, 2008

I've decided to make my story public because I'm outraged by the practices out-there when it comes to buying a truck.
So me and my husband - very honest people - decided to buy our first truck. We found one that we liked and contacted the dealer looking for financing. They redirected us to a company they work with. We asked based on our credit to be given an interest rate and we were told 10.46%. Now we said great, let's do it. And we did...
Husband went there signed the papers, not reading anything of course, cause who would think of being scammed at that time, bought the truck and we're all happy.
Two month later (and I know it'a ALL my fault, please don't throw it in my face) I am catching up with the accounting and I am finding the contract. Guess what?
The loan we were given is not an auto loan, it's a God knows what loan with the interest compounded for the life of the loan. Meaning yes, we do have 10.46% calculated for the entire financed amount for 3 years, no matter how much I pay monthly. This translated in a regular loan would come to 18.86% APR and believe me if I knew I wouldn't have bought the truck.
Another fishy thing they did, they asked my husband to sign a power of attorney. How did I find out? Because we put a lien on a paid out van as collateral. They called me recently asking to sign a power of attorney for that one too. I asked what for? And the woman tells me "in case you don't pay we transfer the title in our name". I couldn't believe my ears. How can they even think of doing something like that? Proper procedure would be taking me to court and based on the lien they would take possession IF what I still owe is more than the value of the van.
So let's say at this point I'm 2 years into the loan and don't make payments anymore. They can and, now I know, will transfer the title for the truck in their name. No matter how much I paid and how much I have left off. I'm thinking they could even call the cops saying we stole it. We would even do some time.
Anyway... my stupidity can be your gain. READ the contract you sign. ASK for explanations. DON'T sign until you fully understood what's going on. And go online and plug in the numbers in a loan calculator.
It seems like everybody is out to rip you off. Don't let them like I did.

ATeam · May 5, 2008

My heart sank as I read your story, but it is a very important story for truck owner wannabes to read. Thank you for sharing it. You did a good thing today.

By the way, power of attorney documents can often be revoked. Have you checked to see if you can revoke yours?

butterfly610 · May 5, 2008

You are right! Read, Read, Read, and ask questions if you don't understand fully what you are signing. That's terrible that you had to have a bad experience when you were so excited about buying a truck. How devestating. It's nice that you told your story, and didnt present it in such a manner that people would think you're just coming on here bad-mouthing some company, and not taking any of the responsibility, and naming names trying to ruin a business. It shows some character in my opinion.

davekc · May 5, 2008

Does sound like a strange way to do financing of a truck. I certainly wouldn't sign anything or do any other power of attorneys with them.
I would look very carefully to see if you can refinance it through another mortgage company.
As mentioned, I think you did a great service to the EO community by showing what can happen to the unsuspecting.

greg334 · May 5, 2008

I am a bit confused.

I think you illustrate my point of professional help a lot better than I could, your story raises a couple questions.

1 - are you running at all?

If yes then

2 - why stop paying on the truck if you are running?

Here is a real important suggestion that I don't see anyone else mentioning;

If you are two years into the loan (3 year loan), don't stop paying it unless you are permently off the road and living in a box. This will screw up your credit and make it harder in the future for you to do much of anything. Instead of worrying what you did, look at documenting your work so far, like how consistent you are running and how much money you are making. THEN I would go and look for a load to pay off the remainder of the loan you presently have in order to get out of that deal. At 18% interest applied to the full amount is not good but you should be able to come up with a solution at say 12% that will help out in the long run.

The thing I am getting at is that if your credit rating is good, then try to keep it that way. If you feel that it is unfair that you took the loan at 18% interest, well I don't know what to say. My recommendation has been before entering into this business, get a lawyer and an accountant - they are professionals and they can help you.

Tuckster · May 5, 2008

Please list the dealer. If they directed you to a shady operation, I would like to know so I can stay clear. Many of us sign too quickly. Its a matter of trust.

Jefferson3000 · May 5, 2008

I am confused as to whether they are 2 years into this deal currently, or 2 MONTHS into it.

If two months, then I would definitely look at finding your own financing an refinance it.

TSexpediter · May 5, 2008

I guess it's against all rules to name names. But probably PM-ing me can give you that info without other implications.

I doubt I'm the only one it happened to but not everyone reads or understands, that's why my story got posted. Cause after all, I'm an accountant. Shame on me...

The contract is very shady. Is not stated as a loan. When I spoke to them on the phone they named it a "lease". Which to me is not simply because in a lease you don't become the owner untill you pay the final residual amount. There is no residual amount here and the title is in our name with the financing company listed as lien. Basically we agreed on paying 36 month the fixed $ amount. No mentioning of amount financed, no mentioning of interest rate.
I can prepay in full only and get a fabulous discount of 4% for that. So no refinancing that would make sense.

I'm not saying I am default or plan on defaulting on the loan. Far from me that thought. But I'm saying, EVEN IF, that is not the way they should act.

The truck is running and is bringing a profit. I'm just saying that I would've liked to know the truth upfront. The answer "you signed it" doesn't do me to much good. I signed because you lied to me about what's in the papers and stupid me.. I believed.

TSexpediter · May 5, 2008

Jefferson3000 said:
I am confused as to whether they are 2 years into this deal currently, or 2 MONTHS into it.

If two months, then I would definitely look at finding your own financing an refinance it.

Sorry for the confusion. I am 2 months into the deal. The 2 years thing was just an example on what it could happen.

I will not default on the loan. I'm just saying if someone does, this will definitely happen to them.

Unless they read and learn.

pjjjjj · May 5, 2008

tsexpediter said:
Sorry for the confusion. I am 2 months into the deal. The 2 years thing was just an example on what it could happen.

I would take it in to your lawyer if you are only 2 months into this thing, and ask if there isn't some way to get out of it since they weren't up front in their disclosure of the real interest rate. It's probably worth the lawyer fee to at least feel you tried, even if there's nothing you can do at this point.

greg334 · May 5, 2008

tsexpediter said:
I guess it's against all rules to name names. But probably PM-ing me can give you that info without other implications.

I doubt I'm the only one it happened to but not everyone reads or understands, that's why my story got posted. Cause after all, I'm an accountant. Shame on me...

The contract is very shady. Is not stated as a loan. When I spoke to them on the phone they named it a "lease". Which to me is not simply because in a lease you don't become the owner untill you pay the final residual amount. There is no residual amount here and the title is in our name with the financing company listed as lien. Basically we agreed on paying 36 month the fixed $ amount. No mentioning of amount financed, no mentioning of interest rate.
I can prepay in full only and get a fabulous discount of 4% for that. So no refinancing that would make sense.

I'm not saying I am default or plan on defaulting on the loan. Far from me that thought. But I'm saying, EVEN IF, that is not the way they should act.

The truck is running and is bringing a profit. I'm just saying that I would've liked to know the truth upfront. The answer "you signed it" doesn't do me to much good. I signed because you lied to me about what's in the papers and stupid me.. I believed.

First thanks for the clarification.

Don't beat yourself up about it, I know of others that have done the same thing.

garman351 · May 12, 2008

tsexpediter said:
Sorry for the confusion. I am 2 months into the deal. The 2 years thing was just an example on what it could happen.

I will not default on the loan. I'm just saying if someone does, this will definitely happen to them.

Unless they read and learn.

(SOLUTION)
Have another Company refinance your truck. I'm wondering about your credit rating? Like most of the car scam deals out there, where if you make $10 a week picking up beer bottles along side the road they can finance your vehicle.

Get incorporated that way if you go under it will not effect you personally, but I'm sure your loan sharks already have that figured out and there is a clause in your contract that clearly states they can make contract adjustments ONLY if they want to, if your a so called good customer in good standing.

Garman