Car financing and usury

[Horse with no Name]

My SIL went to buy a truck a couple of weeks ago. He went to all of the dealerships but ended up with a Tundra because the ONLY one who would finance him is Toyota.
My gripe is that these people really DO NOT want to finance cars. I have no pity on them.
I see people driving cars that do not have jobs or any visible means to pay for them. They get financing without a problem.
My SIL does NOT have much credit...however, he is VERY creditworthy.
The only credit he has is a car that he purchased a year ago and has paid several payments on it each month. He paid $15k for the car and owed $7k only after a year. This was purchased through Toyota credit.
He has a guaranteed income of $5k a month. He works and makes $2k a month. He has a large savings account as well as a large trust fund from a legal settlement that will pay out next year. He had a down payment of $20k on this truck.
So anyway, Ford and GM refused to finance him. Toyota offered to finance him with 18% interest after agonizing over the decision for 48 hours (even though he had been paying on another car note for the past year).
Now...I'm sorry. This was an equity buy. 18% was usurious.
I advised him to go to his little hometown bank that he did all of his business through. He had an approval in 5 min with a 6% rate (it was the lowest their Board of Directors allowed).
Now...the feds want to give MY money to GMAC. I'm sorry but if this is the kind of business they are turning down--then they NEED to go out of business or get some people who know how to purchase good paper.

Edited to add: The Toyota note was approximately payments of $360 for 60 months and the bank payments are $375 for 48 months.

[K Gardner]

1. !!!!!!!!!!!!!!!!! Absolutely unreal ! Thank you for posting this.

[TexasObserver]

2. Indeed, getting car financing from dealers is like taking a bar bet.

People should try to pay cash for their cars, and failing that, get a bank loan. Banks will finance cars in the range of 6-8% right now, to those with good credit and the ability to repay the loan.

[EnviroBat]

3. I got totally f'ed just like that a few years ago.

I desperately ned a vehicl as my used little truck, "The Donkey" was on it's last legs. I think I'm paying close to 19%. These assholes will never again take advantage of me. They can all rot in hell for all I care. I can guarantee this much. They are damn grateful I make my car payment every month. You can bet they don't want to repo cars right now.

[DainBramaged]

4. What was his credit score? Most of the idiot captive finance arms

have pulled back and won't loan anything with under a 750 score. And Toyota is pitching "Saved by Zero" 0 percent financing, so I guess they tried to scam him.

[Horse with no Name]

5. He only has one car note that he has paid on

One. Several payments a month. I don't know what his credit score is but my guess is that since he isn't covered up in debt, it isn't as high as they would like.
Perhaps the credit score is the root of the problem. Instead of using good judgment based on facts like money in the bank, amount of down payment, guaranteed income and other economic indicators--they rely on a score that is determined solely by owing more money which may (or may not) be paid back in the long run.