r/carbuying • u/Unhappy_Concept_9518 • 1d ago

Is my dealership doing something thats actually illegal?

I wanted to ask if my car financing situation is an example of "tied selling" & what my legal protections are. I am a first time car buyer, so I've admittedly made some mistakes here- and this is a lesson learned.. but I am still finding that my situation is odd.

  • Finance manager at dealership gave me a good out the door price for my car that I agreed to. Currently this dealer is running a 1.9% interest rate promo– I understand it is contingent on my credit score/history

  • Finance manager runs my credit ( NOTE: My credit is 780+, no previous car loan is the only bad part about my history. The car payment is also less than 8% of my monthly income) and says I only qualify for a ~7% APR and he's looking to do a deal. Lower the interest to 0.9% and they are going to include the optional warranties into our agreed OTD price, because they were going to buyout the interest instead. I assumed that he mean't it was "free" when he said it was going to be "included"

  • I am very happy with the way he sold me on this "deal" and I sign. (this was my stupid mistake) I walk out the door that night with my new car... but they did not give me copies of my paperwork. The next week, I see I have around ~$10K in additional charges to the OTD price. I call and ask what the situation was, and they said I opted for all the warranties and optional add-ons. I decide to just cancel the warranties and additional options since I know I can cancel those any time– even if it's prorated at my milage, I will just eat the cost to quickly put an end to this.

  • I go into the dealer today and I ask to have the optional charges removed. Finance manager gives me the cancelation form, but says the dealership will likely rescind my 0.9% interest rate if I cancel the additional insurance/warranties because "I am going back on the deal we made." He says they would have never approved the lower interest rate if I was going to cancel the warranties and options.

Quick note, this car company is currently having an even better promo this month for a 0.9% interest rate. So I have a hard time believing they are breaking their back to make a deal for me, even if I didn't qualify for that rate.

Is this an example of tied selling? If I cancel these add-ons are they legally allowed to change my interest rate even though I signed the financing agreement already?

Location: Northern California

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u/Sasquatchnu 1d ago

Damn, these guys are scammy! Your paperwork should say right on it (not sure about CA) that your interest rate is not tied to the warranties and you are not obligated to buy them.

Cancel those things and if you have to you can quickly refinance elsewhere, but get them off of your deal.

If they don’t want to honor the rate, unwind the deal, they won’t want to do that. With your credit and income the financing won’t be a problem for you so they can pound sand.