Extended warranty and re-sign call question.

[thatonedude]

Okay, I'm new to buying at a dealership and I had my first experience this past Saturday. I purchased a 2006 Honda Element, I am satisfied with my APR, unit pricing and monthly payment. I was offered an extended warranty of 60mo or 100,000 miles for $3000, which I flatly refused as I know Honda sells these for $650. The finance officer brought in the finance manager (totally coke'd out too, man what a hard sell) and eventually told me that he would sell it to me at $700 ($50 above cost from Honda, which is correct I checked this), so I agreed to add this on top of the financing.

At this point I have had a good experience and trusted his math and did not double check, though on my home in the Element I was thinking about it and did the calculations and it turns out he is charging me $1560 for the warranty.

This is not the only other problem... four days after having the Element at home (and loving it) I get a call from the finance officer who tells me my gross income does not match what I told them (I may have been a grand or two off, as I answered that question off the cuff and it was Saturday evening and supposedly the Capital One Finance office was not open at 7pm for it to be fully approved and it would go through Monday) so he tells me he ran it by them and they want to lower my payments $10 a month and I need to come in to resign ASAP. My wife had the Element at work last night and I told them that I will be there tonight afterwork.

Now it sounded very fishy to me that the dealership wants to cut my payments and I found a site that says this can possibly be a scam where they want you to resign for a lower payment, but extend the amount of months you pay. I have not confirmed if that is their intention, but I suspect it may be and I will be paying attention to this when I go there this evening.

Now with all that backstory I have two questions:

1) I am going to ask they cancel the extended warranty if they cannot renegoiate to the promised $700. Does this have anything to do with the outside financing outcome... Capital One is who the dealship is getting me financed through... or is this just pure profit for them and the finance company could give two craps?

2) If they do try to extend my loan term and hide the extra by making look like my payments are less, I can flatly refuse and still demand the origninal deal?

Paperwork is going to have to be redone since I am demanding the extended warranty be dropped or discounted. After my calculations I should be paying roughly $10 less a month anyway. Eh this is frustrating. Any insight? Should I stand my ground with the warranty and can they cancel the contract if I refuse to resign a bloated 'deal' or will they more than likely let me keep the origninal deal if I flatly refuse? Any insight would be helpful as I am so nervous about going back in there.

[Ray paulsen]

(1) you were offered a $ 3000. warranty that you added on for a cost of $ 700. You mentioned you checked this to be the correct amount ? let us all know your little secret how you know that to be the correct amount, is there some place you can supply a link ?

(2) THIS IS MY KEY QUESTION TO YOU

" Four days after delivery " you get a call from dealership to re-negotiate paper work - did you sign a RETAIL INSTALLMENT CONTRACT ?

[thatonedude]

Originally Posted by Ray paulsen

(1) you were offered a $ 3000. warranty that you added on for a cost of $ 700. You mentioned you checked this to be the correct amount ? let us all know your little secret how you know that to be the correct amount, is there some place you can supply a link ?

Well, I went back to the page and it was from another dealership. I guess I don't have any official Honda link. I'm guessing these Honda Care contracts are dealer incentive laden. I took a second look at the receipt when I got home last night and found that is actually a 84mo or 100,000 mile honda-care warranty and we paid $798 for this. Also, upon a second look I see we paid some $762 for gap insurance. I had totally forgot about this discussion with the finance vampire. Now, I did some searching and found I can get this much cheaper, less than half that. Soooo, another trip to the dealer is in my future to cancel the gap insurance.

(2) THIS IS MY KEY QUESTION TO YOU

" Four days after delivery " you get a call from dealership to re-negotiate paper work - did you sign a RETAIL INSTALLMENT CONTRACT ?

Yes, it was a 'spot delivery contract'. Something about 14 days if cannot find a lender, will be required to return the unit as it was minus normal wear and tear. They actually did take $10 off a month and did not extend the months or change the APR. I guess my wife overestimate her income by a couple grand, it didn't reflect on her latest stub in the YTD. So the dealership had to lower the principle of the unit another $600.

I did some more research last night and found our credit score (which isn't outstanding, but not horrible... 640) should have us at a few percentage points lower on the APR. We are now in Chicago, though used to live in Burlington, IA and financed two vehicles several years ago through a small credit union my wifes family has done business for at least 20 years. We are going to approach them for re-financing for the better APR, we think we can retain the same monthly payment and knock 12 months off the loan.

This has been an experience and I will probably not try to finance through a dealership again.