Interest Rate Reduction when I purchased my Extended Service Plan

[raider396]

I was just surfing through our forum this evening and read a few posts about ESP and discounts and what not. Well, when I purchased my 2012 Sport and I signed up for the ESP through Ford , of course, My interest rate dropped almost 1.5% from 3.9 to 2.49%. The money I will save in interest almost covered the cost of the ESP!! I was really surprisedl!! So was the finance guy that was handling my paperwork. He had no idea that would happen. So I guess I'm just wondering if anyone else has gotten this deal or if it is a normal thing or what. I look forward to hearing back from my fellow edge owners.

[Dingo]

He lied. You could've had 2.5% the whole time. He told you the higher rate so that you'd buy it and he would get the massive kickback on selling it.

[raider396]

He lied. You could've had 2.5% the whole time. He told you the higher rate so that you'd buy it and he would get the massive kickback on selling it.

I might agree with you, but for the fact that I had already decided to buy the ESP and the finance guy was just inputting all the information when he realized that my interest rate dropped. So there was nothing for him to sell me that I hadn't already decided on.

[Dingo]

I'm not guessing. I am not at liberty to tell you why I know this.

[raider396]

OK. So I got dupped. I still saved 1.5% on my interest rate for purchasing something I had decided to purchase if and when I bought my Edge. I'm just trying to understand the big conspiracy here, but I guess if you told me then you'd have to kill me, right?

[Dingo]

No. I can make it simple. Say I'm an f&I guy. I have you bought at 3% on a loan. I tell you 5%, but if you buy this warranty, I can get you 3%. Either way, you buy the car. I make $ for fornicating you on interest or I make $$$ on the warranty. I laugh all the way to the bank either way. If you can get x% with extra purchases, you can get x% without.

[raider396]

Dingo, I completely understand what you are saying, but you obviously still don't understand how the transaction went down. I'm going to try to explain this in a way that will make it very clear. Feel free to re-read it if you need to.

 

This is the scenario YOU are describing: (By the way, this is COMPLETELY hypothetical!!)

 

F&I guy: "So Mr. Car Buyer (that's me), you have decided to buy this 2012 Ford Edge Sport and we got you financed at our ROCK BOTTOM (I underlined it to show that they were really emphisizing the ROCK BOTTOM part) rate of 3.9%. Might I suggest you purchase the Ford ESP?

 

Me: "Well, I'm not sure if I really want that ESP. It's really expensive. I think I'll just take my chances and hope nothing goes wrong with the vehicle after the 36000 mile BTB warranty runs out."

 

F&I Guy: "Well I think it's a very valueble option!! You can never be too safe!!!" Winking at the GM of the dealership.

 

Me: "No, I just don't think I need it."

 

F&I guy: "You know, I might be able to persuade my GM to work really hard for you in lowering your interest rate another 1 - 2 points if you decide to go with this ESP. Again, winking at the GM of the dealership.

 

Me: Wow!! That might be an option for me if you think you can lower my rate."

 

F&I Guy: "Great!!! Let me see what I can do."

 

Minutes pass as I wait for the F&I Guy to return. He really does talk to the GM about lowering the rate at all cause he already knows he can drop the rate if he absolutley has to to get the sale of the ESP. But he'll get the "kickback" on the that atleast.

 

F&I Guy: "Well, we're in business!!! I got our GM to drop the rate. It wasn't easy, but we got the bank to agree to help us out!!"

 

Let's review!!!

 

In this scenario the F&I guy was trying really hard to get me to purchase the ESP that I had shown no interest in getting, knowing the whole time that he has 1 - 2 more % points to play with, points they could have just given me in the first place, but are now holding them back to use as a way to entice me to purchase said plan. In this scenario, they were not being completely truthful when they told me that 3.9% was the absolute best rate they could find for me.

 

Now let's take a look at how the actual transaction with the F&I guy took place .(This is NOT hypothetical. These are actual events and only the names have been changed to protect the innocent)

 

Me: "Hello Mr. Finance Guy!! I'm here to sign all the paperwork for my 2012 Ford Edge Sport, at 3.9% interest and I ABSOLUTELY want the Ford ESP because this car has all the bells and whistles, which means there are a lot more things that could go wrong and I definitely want to cover myself!!"

 

F&I Guy: "So Mr. Car Buyer, let me make sure I understand everything you just told me. You have decided to purchase this 2012 Ford Edge Sport and you have also told me that you DEFINITELY want the Ford ESP and we have been able to lock you at a rate of 3.9%. Does that all sound correct to you?"

 

Me: "Yes it does, Mr. F&I Guy!! Did I mention that I absolutely want the Ford ESP?" (I probably didn't really reconfirm this with him again, but I want to make sure that it is clear to you that I wanted the ESP and it was not something they had to sell to me after the fact.)

 

F&I Guy: "Yes you did, Mr. Car Buyer."

 

Me: "OK. I just wanted to make sure."

 

F&I Guy: "Great!! Let's get all this paperwork filled out and we'll be done."

 

Several minutes go by as he is printing all the paperwork. During this time nothing else has been said about me purchasing anything else. Nothing. Zero. Ziltch. Nada. There is no more need to try to convince me to buy anything, as they have already sold me the car at those terms with the ESP included. IT'S A DONE DEAL at this point!!!!

 

F&I Guy: "Mr. Car Buyer, I have just noticed something. When I entered the ESP that YOU REQUESTED your nterest rate just went from 3.9% to 2.49%!!!

 

Me: "Wow that's GREAT!!!!"

 

I sign all the docs I have to sign, feeling pretty good about the additional money that I have just saved.

 

F&I Guy: "We're done Mr. Car Buyer!! Thank you for your business!! I hope you enjoy your new vehicle."

 

So where in this transaction, that I just laid out for you, did I get lied to? If they get "kickbacks" for every extra point on the finance rates and selling the ESP, why would they drop the interest rate after the deal is already done? Your "He Lied" statement makes no sense. What did he lie about and why did he lower my rate after the terms were agreed to? He surely had nothing to gain by my rate dropping!!! And if he was in fact looking to "pull the wool over my eyes" he would have simply failed to mentioned the rate reduction and just adjusted it back to 3.9% in the system and got the "kick back" for the extra 1.5%.

 

So, now please explain how he was lying to me?

[akirby]

OK. So I got dupped. I still saved 1.5% on my interest rate for purchasing something I had decided to purchase if and when I bought my Edge. I'm just trying to understand the big conspiracy here, but I guess if you told me then you'd have to kill me, right?

 

If you were planning to buy the warranty any way and you got a decent price on it then you didn't get duped. Dingo was just pointing out that you could have gotten 2.5% without buying the extended warranty if you so desired. It's important to point this out for other people who might be in the same situation.

[akirby]

Dingo, I completely understand what you are saying, but you obviously still don't understand how the transaction went down. I'm going to try to explain this in a way that will make it very clear. Feel free to re-read it if you need to.

 

This is the scenario YOU are describing: (By the way, this is COMPLETELY hypothetical!!)

 

F&I guy: "So Mr. Car Buyer (that's me), you have decided to buy this 2012 Ford Edge Sport and we got you financed at our ROCK BOTTOM (I underlined it to show that they were really emphisizing the ROCK BOTTOM part) rate of 3.9%. Might I suggest you purchase the Ford ESP?

 

Me: "Well, I'm not sure if I really want that ESP. It's really expensive. I think I'll just take my chances and hope nothing goes wrong with the vehicle after the 36000 mile BTB warranty runs out."

 

F&I Guy: "Well I think it's a very valueble option!! You can never be too safe!!!" Winking at the GM of the dealership.

 

Me: "No, I just don't think I need it."

 

F&I guy: "You know, I might be able to persuade my GM to work really hard for you in lowering your interest rate another 1 - 2 points if you decide to go with this ESP. Again, winking at the GM of the dealership.

 

Me: Wow!! That might be an option for me if you think you can lower my rate."

 

F&I Guy: "Great!!! Let me see what I can do."

 

Minutes pass as I wait for the F&I Guy to return. He really does talk to the GM about lowering the rate at all cause he already knows he can drop the rate if he absolutley has to to get the sale of the ESP. But he'll get the "kickback" on the that atleast.

 

F&I Guy: "Well, we're in business!!! I got our GM to drop the rate. It wasn't easy, but we got the bank to agree to help us out!!"

 

Let's review!!!

 

In this scenario the F&I guy was trying really hard to get me to purchase the ESP that I had shown no interest in getting, knowing the whole time that he has 1 - 2 more % points to play with, points they could have just given me in the first place, but are now holding them back to use as a way to entice me to purchase said plan. In this scenario, they were not being completely truthful when they told me that 3.9% was the absolute best rate they could find for me.

 

Now let's take a look at how the actual transaction with the F&I guy took place .(This is NOT hypothetical. These are actual events and only the names have been changed to protect the innocent)

 

Me: "Hello Mr. Finance Guy!! I'm here to sign all the paperwork for my 2012 Ford Edge Sport, at 3.9% interest and I ABSOLUTELY want the Ford ESP because this car has all the bells and whistles, which means there are a lot more things that could go wrong and I definitely want to cover myself!!"

 

F&I Guy: "So Mr. Car Buyer, let me make sure I understand everything you just told me. You have decided to purchase this 2012 Ford Edge Sport and you have also told me that you DEFINITELY want the Ford ESP and we have been able to lock you at a rate of 3.9%. Does that all sound correct to you?"

 

Me: "Yes it does, Mr. F&I Guy!! Did I mention that I absolutely want the Ford ESP?" (I probably didn't really reconfirm this with him again, but I want to make sure that it is clear to you that I wanted the ESP and it was not something they had to sell to me after the fact.)

 

F&I Guy: "Yes you did, Mr. Car Buyer."

 

Me: "OK. I just wanted to make sure."

 

F&I Guy: "Great!! Let's get all this paperwork filled out and we'll be done."

 

Several minutes go by as he is printing all the paperwork. During this time nothing else has been said about me purchasing anything else. Nothing. Zero. Ziltch. Nada. There is no more need to try to convince me to buy anything, as they have already sold me the car at those terms with the ESP included. IT'S A DONE DEAL at this point!!!!

 

F&I Guy: "Mr. Car Buyer, I have just noticed something. When I entered the ESP that YOU REQUESTED your nterest rate just went from 3.9% to 2.49%!!!

 

Me: "Wow that's GREAT!!!!"

 

I sign all the docs I have to sign, feeling pretty good about the additional money that I have just saved.

 

F&I Guy: "We're done Mr. Car Buyer!! Thank you for your business!! I hope you enjoy your new vehicle."

 

So where in this transaction, that I just laid out for you, did I get lied to? If they get "kickbacks" for every extra point on the finance rates and selling the ESP, why would they drop the interest rate after the deal is already done? Your "He Lied" statement makes no sense. What did he lie about and why did he lower my rate after the terms were agreed to? He surely had nothing to gain by my rate dropping!!! And if he was in fact looking to "pull the wool over my eyes" he would have simply failed to mentioned the rate reduction and just adjusted it back to 3.9% in the system and got the "kick back" for the extra 1.5%.

 

So, now please explain how he was lying to me?

 

He took you from being a happy customer to being an EXTREMELY happy customer (as evidenced by your Wow that's GREAT reaction). It's all about PR. Also - if you had decided not to get the ESP then he could have used the interest reduction as a sales tool. So he either uses it to make the ESP sale or he gets tons of PR and goodwill.

 

Ask yourself this: Since the ESP warranty and Ford Credit are not in any way related to each other, why would the purchase of one affect the other? Your interest rate is based on what you're financing and you're credit history. Since neither of those things changed, the interest rate should not have changed. I can go to my credit union today and get 2.69% for 60 months without even trying so 2.5% isn't that spectacular.

 

There is a lot of stuff like this that goes on behind the scenes in F&I. My suggestion is to line up your own financing and ESP purchase ahead of time and don't let the F&I guys play games.

 

Again - nobody is suggesting you got duped or taken in this instance - just trying to educate everyone on how this process really works so nobody gets duped down the road.

[raider396]

If you were planning to buy the warranty any way and you got a decent price on it then you didn't get duped. Dingo was just pointing out that you could have gotten 2.5% without buying the extended warranty if you so desired. It's important to point this out for other people who might be in the same situation.

I went ahead and replied to Dingo again, trying to clear it up for him. Take a look at it if you get a chance. I think what kind of rubbed me the wrong way was Dingo's first reply after my original post when he stated something like, "He lied to you!! You could have gotten 2.5% all along!!" Like I'm some sort of blind sheep walking into the dealership looking to pay MSRP at the highest interest rate possible. And he starts posting very matter-of-factly that I was lied to, without really understanding the situation. Then I tried to explain it again and he was still not getting it and still insisting that they got me to buy the ESP by lowering my rate. So in my last post, I've tried to explain it in even greater detail one more time for him. I just don't think people need to be so negatively matter-of-fact when they really don't understand all the facts. That's all I'm trying to say.

[akirby]

I went ahead and replied to Dingo again, trying to clear it up for him. Take a look at it if you get a chance. I think what kind of rubbed me the wrong way was Dingo's first reply after my original post when he stated something like, "He lied to you!! You could have gotten 2.5% all along!!" Like I'm some sort of blind sheep walking into the dealership looking to pay MSRP at the highest interest rate possible. And he starts posting very matter-of-factly that I was lied to, without really understanding the situation. Then I tried to explain it again and he was still not getting it and still insisting that they got me to buy the ESP by lowering my rate. So in my last post, I've tried to explain it in even greater detail one more time for him. I just don't think people need to be so negatively matter-of-fact when they really don't understand all the facts. That's all I'm trying to say.

 

He wasn't being negative to you although it's easy to see how you would take it that way. He was really just being critical of the F&I guy, not you.

[Dingo]

No, I was saying that the esp purchase didn't lower the rate. He told you that it did. More of my point was all that stuff akirby said. Whatever rate you can get with add-ons, you can get without. The only time that anything outside of the f&i person's office changes your rate is if your credit sucks and you have to go to secondary to get bought.

[raider396]

He took you from being a happy customer to being an EXTREMELY happy customer (as evidenced by your Wow that's GREAT reaction). It's all about PR. Also - if you had decided not to get the ESP then he could have used the interest reduction as a sales tool. So he either uses it to make the ESP sale or he gets tons of PR and goodwill.

 

Ask yourself this: Since the ESP warranty and Ford Credit are not in any way related to each other, why would the purchase of one affect the other? Your interest rate is based on what you're financing and you're credit history. Since neither of those things changed, the interest rate should not have changed. I can go to my credit union today and get 2.69% for 60 months without even trying so 2.5% isn't that spectacular.

 

There is a lot of stuff like this that goes on behind the scenes in F&I. My suggestion is to line up your own financing and ESP purchase ahead of time and don't let the F&I guys play games.

 

Again - nobody is suggesting you got duped or taken in this instance - just trying to educate everyone on how this process really works so nobody gets duped down the road.

If I came across as though I thought 2.5% was a spectacular rate, then I'm sorry. I was just stating the facts. Anybody with decent credit can get that rate or better. You've missed the point. I was simply trying to explain that the car deal was complete, including the ESP and then I received a rate reduction. The only one to gain in this instance was me. So how did the F&I guy lie to me. I'm just trying to make sense of his very matter-of-fact comments. That's all.

[raider396]

No, I was saying that the esp purchase didn't lower the rate. He told you that it did. More of my point was all that stuff akirby said. Whatever rate you can get with add-ons, you can get without. The only time that anything outside of the f&i person's office changes your rate is if your credit sucks and you have to go to secondary to get bought.

Then what was it that lowered my rate and why would they give me the reduction after the deal was done when they (the dealership / F&I Guy) had absolutely nothing to gain and possibly a little bit to lose doing the deal at an even lower rate? When I say "a little bit to lose" I'm refering to the "kickback" they get on financing. And, finally, how did they lie to me? I'm just wanting to make sure that this whole "me gaining while giving up nothing" thing doesn't happen to me again when I go to purchase my next new car.

[Dingo]

You're clearly not getting it. I'll try one more time.

 

I am not saying that you lost anything. I am not saying that you were screwed. It could be anything from him misreading the interest rate initially to him flat out lying. I'm not even implying that he was trying to dupe you, although it is a possibility. I'm saying that BUYING THE ESP DID NOT LOWER YOUR RATE. That is where the obvious lie was told. If you're happy, great, but like akirby said, it's important that others that may fall prey to dishonest people know beforehand.

 

My wife even almost got taken. In 2007, she bought a civic. We keep separate money. The car and payment were hers alone, but I'm not going to let her get conned. I worked the fastest deal on it in history, and then it was time for f&i. The guy even tried to tell me that I needed to wait outside, since my name wasn't going to be on the car. She demanded that I be in there with her. At this point, I was very calm, waiting to see where this was going. He ran her credit, and then told her the best he could get was 6.9%. She has good credit, I have stellar credit, and we're in a community property state, so I knew he was full of shit, but I still bit my tongue. He asked her about the extended warranty. She declined. He even said, "if I could get the interest lowered to where it didn't cost you anything extra, would you want it?" she asked what he could get it down to. He said, definitely 5%, and maybe even less." I asked, "if you can get her bought at 5% with it, why can't you with it?" his response: "if I'm gonna scratch your back, you have to scratch mine." I told her it was time to go, and the guy actually physically threatened to hit me if I told her what to do again. I encouraged him to do so, which he graciously declined.

 

We got her car at another dealership for the same price with 0% that afternoon. The f&i guy in question became unemployable and left GA.

 

Please understand that even a victimless crime is still a crime, and awareness of the possibility of it happening is your best defense. The purpose of a site like this is to share information and help each other. Wouldn't you want others to know and be prepared?

[raider396]

You're clearly not getting it. I'll try one more time.

 

I am not saying that you lost anything. I am not saying that you were screwed. It could be anything from him misreading the interest rate initially to him flat out lying. I'm not even implying that he was trying to dupe you, although it is a possibility. I'm saying that BUYING THE ESP DID NOT LOWER YOUR RATE. That is where the obvious lie was told. If you're happy, great, but like akirby said, it's important that others that may fall prey to dishonest people know beforehand.

 

My wife even almost got taken. In 2007, she bought a civic. We keep separate money. The car and payment were hers alone, but I'm not going to let her get conned. I worked the fastest deal on it in history, and then it was time for f&i. The guy even tried to tell me that I needed to wait outside, since my name wasn't going to be on the car. She demanded that I be in there with her. At this point, I was very calm, waiting to see where this was going. He ran her credit, and then told her the best he could get was 6.9%. She has good credit, I have stellar credit, and we're in a community property state, so I knew he was full of shit, but I still bit my tongue. He asked her about the extended warranty. She declined. He even said, "if I could get the interest lowered to where it didn't cost you anything extra, would you want it?" she asked what he could get it down to. He said, definitely 5%, and maybe even less." I asked, "if you can get her bought at 5% with it, why can't you with it?" his response: "if I'm gonna scratch your back, you have to scratch mine." I told her it was time to go, and the guy actually physically threatened to hit me if I told her what to do again. I encouraged him to do so, which he graciously declined.

 

We got her car at another dealership for the same price with 0% that afternoon. The f&i guy in question became unemployable and left GA.

 

Please understand that even a victimless crime is still a crime, and awareness of the possibility of it happening is your best defense. The purpose of a site like this is to share information and help each other. Wouldn't you want others to know and be prepared?

Absolutely!!

[Dingo]

Yo, raider... Just out of curiosity, if you're comfortable saying, which warranty did you get and how much were you charged?

 

Is yours FWD or AWD, and did you get PremiumCARE, ExtraCARE, BaseCARE, or PowertrainCARE? How many years and how many miles?

Did you also get RentalCARE, TireCARE, DentCARE, WindshieldCARE, TripleCARE, or EtchCARE?

Did you also get a maintenance plan?

Edited February 9, 2012 by Dingo

[raider396]

Yo, raider... Just out of curiosity, if you're comfortable saying, which warranty did you get and how much were you charged?

 

Is yours FWD or AWD, and did you get PremiumCARE, ExtraCARE, BaseCARE, or PowertrainCARE? How many years and how many miles?

Did you also get RentalCARE, TireCARE, DentCARE, WindshieldCARE, TripleCARE, or EtchCARE?

Did you also get a maintenance plan?

Mine is FWD. I would have to look at my paperwork for exact numbers which is at home, but I know I did get the PremiumCARE - 6year/100,000 I believe are the terms. I don't know the $ off the top of my head. However I was playing with the numbers not long after I actually bought the car and figured at the time my monthly payments w/o ESP @ 3.9% vs. with ESP @ 2.49% and the difference was a dollar or so more a month more with ESP @ 2.49%. I did not get any of the other CARE packages.

[Dingo]

That plan is $2205 retail, and Dealer Cost is $980, just in case you care to know.

[jRE]

I'm in the same boat just days ago. I got a 0.4% rate reduction provided i get the 72/74k premium ESP at 100 deductible. The f&i guy priced me 1,999 (1000 more than what i could have gotten for the same thing elsewhere) but he said it is refundable (by returning the amount to the remaining mortgage) if ever i changed my mind. I plan to give the dealer a visit this monday and have the ESP cancelled which will be 8 days of signing the papers.

 

1. What happens to the reduced interest rate that i got after the ESP is gone?

2. Asuming it will not be a full refund so what is the reasonable amount i should get back?

 

This time, I just want to separate what is reasonable from any of his sales pitch and excuses.

[richy]

There's been some great info in this thread! There have been other threads which have listed online dealers who sell the warranties far cheaper than what the selling dealers usually want to. You can use the info to keep them honest (and get it included in your monthlies and at a lower rate) or tell them to shove it and get it at the online site.