Car Dealer Fees - Was I Fooled by the Dealer??

by Jithu
(Vernon Hills)

Question: I have a question regarding car dealer fees and my recent car purchase. I am new to this country and hence I don't have any credit history.

I bought a car putting 50% as down payment and my relative who had 751 FICO score co-signed for me. The dealer made my relative as the main buyer and I as the co-buyer.

He charged an extra 500 dollars stating that I had Tier 4 Credit and and my relative had Tier 1 Credit and otherwise my interest rate for the finance would shoot up.

So is this additional fee actually charged or was I fooled??? Somebody please advise me. Thanks in advance.

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Answer: Hi Jithu,

It sounds to me like you were lied to and I can see no reason to add that $500 to the sale price other than the dealer making more money.

Even if you were approved by a lender that was charging the car dealer fees of $500 all lenders that I have worked with specifically state that that fee cannot be passed on to the customer.

Your relative has a good credit score and I'm assuming a strong credit history and I just don't see why the dealer would have to send your loan to a lender that would charge a fee.

What lender did they get you financed with?

Assuming you have a social security number, but no credit, I'd think that you would have been able to get financed with a credit union since you have a strong co signer and a very attractive down payment. Credit unions don't charge fees for loans (at least not the ones I've worked over the years).

If you have a print out of what the vehicle was listed for sale on their website, that may help you get that $500 back. If they are not willing to do this, then you could look to your states Attorney General or the Motor Vehicle Department for further help.

Hope this helps,
Justin