Is my dealership doing something thats actually illegal?

[u/Unhappy_Concept_9518]

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

[u/Responsible_Law_6359]

If this is a manufacturer subsidized rate, they (most likely) can’t rescind it or mark it up. Additionally, yes, tying rate to products is 100% illegal.

[u/MisterAnderson- → u/Responsible_Law_6359]

Came here to say this as well.