Forced Financing at Auto Dealers: Auto Dealers Respond
Months ago, the OCCC said “we are concerned” when Jason Wheeler of the WFAA first alerted them to the practice of dealers refusing outside funding.
DALLAS – There are new dispatches coming from the “forced financing” border. Many Texans who have gotten their lender’s pre-approval for auto financing in recent months complain that they’ve faced a serious dilemma at various dealerships across Texas when trying to purchase a vehicle.
More consumer complaints
Here are excerpts from some of the dealer complaints consumers have sent to the Office of the Consumer Credit Commissioner (OCCC), which is the regulator of auto dealerships in the state:
“… would not accept my pre-approved funding …”
“… Would not allow me to use my credit union check. I wanted me to use internal funding… ”
“We were forced to use their funding at 7% interest…”.
Months ago, the OCCC said, “We are concerned,” when Jason Wheeler of the WFAA first alerted them to the practice of dealers refusing outside financing and insisting that you use lenders with whom they work.
It’s no secret that when a dealer enters into a loan with their preferred lenders, they can increase the finance rate and pocket additional profit.
RELATED: Powerful Group Denounces Force Financing Practice at Texas Auto Dealers
It’s not illegal in Texas
Let’s be clear: Many consumers find this practice unpleasant, but it is not illegal. The OCCC confirms that there is no state law against this.
Yet the OCCC has not only expressed concern, the bureau has asked consumers experiencing this phenomenon to report it to the agency so that an investigation can be conducted.
And dealers must respond to OCCC surveys.
In the latest batch of consumer complaints and dealer responses, there was a clear pattern in many dealer responses.
Here are some excerpts from what investigators say was said by dealers:
“They take … external funding”
“… cash, bank and credit union”
“… They don’t need to use their funding”.
Time and time again, different dealerships have basically said that they are not doing what consumers say they are doing.
And again and again, the investigation stops there if the consumer complaining has no documentation; it was simply a consumer’s complaint against a company’s refusal.
If you can get it in writing
A few tips: get their words written. Wheeler has been there a few times in person this past summer.
In one case, the dealership said via text message that it would not accept outside financing unless Wheeler’s lender could deliver a cashable check to him.
Wheeler responded by text to confirm that he was going to hand them a cashable check and they responded that they would accept it and made it clear what they needed from him.
Wheeler’s lender was already aware of the phenomenon of “forced financing” at the dealership and was happy to respond to requests made by the dealership.
It may be a good idea to start purchasing a vehicle online. If you find one, email or text a dealership representative. Tell them in writing if you have outside funding. Ask if it’s accepted. If they say no, you have it in writing for a potential future complaint to the OCCC.
If the dealership representative says they will accept outside financing and you go to the dealership and tells you after you arrive in person that outside financing is not accepted there, follow up with them. later by email or text to ask him why he did not accept your outside funding.
Some give in to the dealer and then refinance themselves with their pre-financing
Some consumers say they got around this conundrum by accepting the dealer’s loan, then immediately refinancing with their pre-approving lender, who offered them better terms.
If you think you could try to do this, talk to your pre-approving lender first to make sure their refinance rate would be the same as the buy rate they offered you.
Additionally, if you are using this method to accept the dealership loan knowing that you will immediately refinance with your lender, be sure to read all of the fine print of the loan at the dealership to make sure there is no penalties for reimbursement. this loan early when you refinance.
Look here for more information on what you should be looking for specifically.
How to Complain About “Forced Financing” at the Dealership
To file a complaint for “forced financing” at the dealership, you can report your experience and send any relevant documents to the Office of the Consumer Credit Commissioner.
You can contact the OCCC consumer support staff by calling them at 800-538-1579, by sending an email to [email protected], or you can file a complaint through their site. Web.