CAR LOAN contracts. How to read them so you don't get SCAMMED into paying too much.

this right here the typical contract you sign for your auto loan and I'm going to show you everything on this so you know exactly what to look for if the dealership is trying to scam you [Music] lise are here you know somebody's messed up when the police are here hey everyone welcome back to the channel I hope you are having a fantastic day I'm really excited about today's video because I think it's something that every single person in this country who finances a car can utilize this video during or before the transaction process to make sure that everything goes right now I've done a couple different contracts in this video that I'm gonna show you that I think are the main things that you need to look at and to ensure that you are getting the best deal and to not get scammed or have anything slipped in on the contract now let's talk about those police officers that are literally standing right there still in this video if you want to know what they're here for on the Louisville Chevy dude Facebook page link in the description there is a video of what happened and why they're here and then secondly if you don't follow me on Instagram make sure you do because I just gave one of my Instagram followers a hundred bucks for one simple question so make sure you follow me on instagram that link is in the description below as well so I'm actually sitting in one of the managers offices here the one who actually has you sign this big contract so I'm gonna do this I'm gonna show you two different contracts I'm gonna show you one with all the numbers are made up but I'm showing you one with just a car deal nothing involved then I'm gonna show you one that has product like say you bought a service contract or gap insurance stuff like that I'm gonna show that as well so as you saw earlier this is a really big form so there's quite a bit of stuff going on here we have a Truth in Lending disclosure box I am NOT putting a car in here so this would be your description of what you're buying if you had a trade this would be your trade this is the autumn is a ssin of amount financed right here we're gonna go over that any type of insurance that you bought like credit life and credit disability which if you remember in the nine fees that I told you to never buy any of this stuff and then over here would be any types of protection packages like service contract or gap or anything like that and then up here is your interest rate and minimum finance charges and all of that stuff as well so we're gonna start right up here in the processing boxer the truth-in-lending box and you'll see that I have this dated five 14 19 the same day I'm shooting this and uploading it to YouTube anything that I have blacked out here is just information that does not really need to be on the internet there's nothing crazy about a deal but you can see this is the seller name and address so this would be the dealerships information and then your information as a buyer would be right here so let's hit the Truth in Lending disclosure box so anything in this black box right here nothing can be stroked up struck out in handwritten so if a dealership does that you already know that the bank is not going to accept that contract so don't ever let them set here and hand write anything in this black box it's absolutely whenever saying illegal so in your postage rate is 6.60 percent so we come down here we're going to revisit this here in a second you'll see that I got six point one two percent so six point one two is the actual rate on this mock up car loan that I'm using and the reason it says six point six so I'm going to show you that here in a second so the finance charge on this is three thousand six hundred and forty two dollars this is a 60-month car loan so if you pay every single payment on the day that it's due in this case I have it due on six 28:19 so every thirty days beyond six twenty eight 2019 if you make your payment of three ninety eight thirty five this is the amount of finance charge you have if you pay the car off early if you make payments early this would not be your finance charge this is a Truth in Lending disclosure box assuming that you're paying all your payments on time and you pay all sixty payments so amount financed is twenty thousand to fifty not nine the amount of total payments is twenty three thousand 901 so that is this number plus this number equals that number total sale price this is the total cost of your purchase on credit including your down payment so in this instance I use two thousand dollars down so twenty five 901 that is this number Plus this number plus two thousand but that's what that means I just shared this with you earlier I did this on sixty months at a three ninety-eight payment and your first payment do on six 28:19 down here tells you any type of late charges it looks like it's 5% or $15 whichever is greater and you have a 10-day grace period so if you paid this on 7/8 you're fine if you pay this on 7-9 then you have to pay a $15.00 late fee right here tells you if you have a prepayment penalty or not this is a big one this one is always always always a big question that I get if you pay office contract early you the first box May and the second box will not have a pay a minimum finance charge so you always want to make sure that this box is checked right here excuse me I have that down a little bit but right there and then this is tie any types of contract provisions so description of the property I mentioned that earlier I mentioned the interest rate on the car right there and then conditional the glove delivery usually there's nothing in there so down here ionization of Finance so we have a twenty thousand nine hundred dollar car so it tells you right here that this includes nine hundred dollars in sales tax so this is actually a twenty thousand dollar car plus nine hundred dollars in sales tax I put a trade in here of five thousand dollars I put a trade owing amount of six thousand dollars so there's one thousand dollars negative equity on this deal now right here where it says n/a typically would be a bank printed out but again I didn't put any bank information in there because it's not privileged not permanent on this so nothing else down here you got your cash payment of two thousand dollars no manufacturer rebates no deferred down payments banks don't let you have deferred down payments I don't know what's on there but it's noise on there other down payments include I don't know how anybody use that we typically don't use that here at the dent dealership so all of those added up is still two thousand dollars so unpaid balance is eighteen thousand nine hundred dollars we have a finance trade in balance of one thousand dollars and then you have paid to public officials so this would be like titling fees registration fees lien filing fees on title stuff like that so that's what that means right there so down here you see all these blank lines that the computer can print stuff in so this is where you have to really really pay attention right here testing fee of $2.99 50 so that's our dealerships documentation fee I've mentioned that before people are triggered a little bit over that and then this one right here is a prepaid finance charge some banks do have prepaid finance charges or vsi so that would be down here and that is why the interest rate on this car loan that you were approved for was six point one two and this is why it's saying six point six oh because in the Truth in Lending disclosure this right here is a finance charge so the bank has that for whatever reasons not all banks have them some do some don't you can certainly ask questions to the finance person in front of you okay is there can I get a same rate without that finance charge sometimes you can sometimes you can't sometimes that's not that big of a deal but it's what it what that means so total other charges fifteen ninety four so that is all of that stuff added up and then the prepaid finance charge redundant at two thirty five and the internal amount financed is twenty thousand to fifty nine so you can see that line a a matches right up here in the Fed box so that is absolutely important that this matches and that matches up there at the top so down here below you would have a couple different Sanders on this form you'd have a signature here you would have a signature here and if you bought an extended warranty or gout coverage you would have extended sure there so this particular one does not have any of that on there down here would be credit life and credit disability again don't buy those from the dealerships so that would be signatures there and then down here would be property insurance again property insurance typically you would not buy from any dealership liability insurance stuff like that and down here is your sales agreement so you promised to pay the principal amount of twenty thousand four ninety four at a rate of six point one two percent it tells you everything there and then down here would be the bank information that you financed your loan through typically a phone number to reach them and then this is the dealerships autograph right there you are absolutely 100 cents to get a copy of this and this is something that would you would keep with you for later reference so now let's go over to the next one and I'm going to show you what it looks like if you have purchased products so you can see I'm using the same car numbers and you can see that I'm a six point five four we have a finance charge right there a forty 163 amount financed total of payments all that stuff is added just a little bit the same interest rate at six point one two and the reason this changes a little bit is because we have we're financing more money so the more money you financed this annual percentage rate is going to go up because of that two hundred and thirty five dollar prepaid finance charge so we're gonna come down here we're gonna skip all that top stuff that I've already mentioned in the video where I come right down here to the ionization of amount financed so this is really really important to make sure that you read through this spot so we have the same thing of two thousand and thirty eight dollars for the purchase price of the vehicle and the reason that is up is because the sales tax is up the last one that I showed you had twenty thousand nine hundred because in Kentucky you are taxed on a couple of service contracts and stuff like that so the sales tax went up so we're gonna use the same numbers at five thousand dollar trade six thousand dollar pay off two thousand dollars cash down and then your unpaid balances 1908 just a little bit above the 89 that we had on the other one again only reason is because the sales tax right there same fee here of fifty nine dollars and fifty cents for title fees and stuff like that down here this is where all of those lines I just mentioned and showed you are going to be filled in so this is our vehicle service contract ethos group I just made up a number of $2,300 gap insurance $699 the dealership processing fee that prepaid finance charge all of that stuff added up twenty three 396 you can see twenty three 396 it adds up and then when you do all that you can see that we added twenty three hundred there we added another 700 there so we added three thousand dollars to that and it adjusted the vehicle payment by about sixty bucks let's just round up and say sixty bucks the last payment was 398 this is 459 alright so there you go that is exact how you read a finance contract now a lease contract is completely different and can be even more tricks in scams on a lease contract I'm going to share that with you real soon maybe even next week on the video of how to read a lease contract these are questions that people ask me all the time so I'm trying to do videos that you are asking me for so if you've got questions on this video throw it down in the comments below if I can answer it I'll answer it through there if I feel that I need to redo this video I will redo this video if you were watching this video way past to the upload time and I have redone the video I will link it at the end of the video or down in the description below one of the two so again as always thank you guys so much this is one of your ideas for me to do so I did it based off of using the forum down below as far as the ideas for my vlog so again as always thank you so much for watching I hope you have a fantastic day make sure you hit the subscribe button turn your Bell notifications on use the Amazon link down below or in shop the Chevy dude swag store have a great day drive safely [Music]

Channel: Chevy Dude

Views: 216,003

Keywords: bachman chevrolet used cars, mike davenport, louisville chevy dude, bachman chevrolet, louisville ky, car loans, car loan, auto loan, car payments, dave ramsey car, car finance, dave ramsey buying a car, dave ramsey car buying, car loan interest, dave ramsey car payments, car loan calculator, financing a car, best car loan, used car loan, how to buy a car, how to get car loan, car loans for bad credit, bachman auto group, dave ramsey car loan, the dave ramsey show

Id: OxprkLlvQqU

Length: 12min 49sec (769 seconds)

Published: Tue May 14 2019