Financing fees for a used car?

Question

I am trying to get a used 09 Chevy Colbat at a dealership. I've never done this before though I've heard enough stories to be exceedingly weary. I applied for financing from Chase and was told it'd take a day to see if I'm approved. In the mean time I went to test drive the car. They offered to finance me for the vehicle and I should have stuck with my original instinct of saying no but decided to see what they were offering since they said they finance through Chase as well. Well they came back with an offer that took this car that is priced at $7,991 to a little over $12,000 bucks. $2,997 of THAT was for something called a "sign and ride fee". Explination of that fee was vague. And the APR was 16.99%. Obviously I wasn't signing that. I told them I'd just wait to see what Chase had to say. They offered to bump the APR down to somewhere closer to 10% however I walked away at that point. My question is what the HECK is that $3000 fee and if I did get financed through Chase would that mystery fee go away or would it stick around?

Update:

I should add that I've never financed from any dealer that reported to the credit unions sooo no real credit good or bad. I believe my fico score is around 650 so I expect a higher APR though not 16.99%. My main question is about the fees being nearly half the price of the car.

John · Accepted Answer

INTREST RATE  TOO  HIGH...............i just got a  ' 08 for  3...  something,  ( less than 4 % )

Anonymous · Answer

Dealers will charge any amount you agree to pay. the more they charge you, the more they make.

That said, subprime lenders DO charge fees. Some lots more than others.

One of the lowest of the subprime lenders only pays about 60% of a contracts value. So if the amount of  your note is $10k   interest, they only pay the dealer $6000 for it.

Another, better lender, for more quality customers might only charge a 6-10% discount. But they will only finance better quality deals.

Chase, if they approve you, would be prime. Meaning they pay 100% of the contracts value.   Id guess you have no chance with Chase or the dealer would have offered you a better deal.

The fee means as much or more than the apr to the lender.

Buy here pay here dealers often charge 3-4 times a cars value because their customers are crap who wont pay if the car quits running.

Its real simple. AVOID predatory lenders. Pay cash until such time as you can buy "prime".

(That means building credit over time)

Harry · Answer

it costs $3000 to sign and buy regardless of if you actually make the payments. either get the loan or walk. to much. its like saying my credit is crap but yeah just give me the car ill pay anything.

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Financing fees for a used car?

3 Answers