Don’t Be Forced At The Car Dealership, To Use Their Financing!!

Texas People FCU Blog

How does one already navigating lack of available cars and trucks, now have to deal with dealerships financial offices saying you can’t use outside financing when buying a vehicle? Following a WFAA story, Texas regulators are getting complaints about dealerships who are refusing outside dealer financing. Never heard of this before from an auto dealer? Having a salesman tell you they didn’t want to do business with you if your already have financing from my credit union or bank because they can make some extra money off their in-house financing.

The Federal reserve shows domestic inventories at a historic low point. The allocations of vehicles have been slashed 80%. . . Supplies will and have become a fraction of what they are now. Of course, we all know this has become the norm due to the supply chain issues creating a chip shortage, which in its self, hard to navigate.
Yes, dealers are struggling because they don’t have enough cars and trucks to sell—but they’ve got the upper hand with the inventory they do have. But to be told that they are at this time not accepting outside financing, that is a ‘concern’.

Can it possibly be legal for a dealership to be able to refuse to sell you a car or truck if you have outside financing? Can they essentially require customers to use their in-house financing, which could force you the customer to pay considerably more money than they have to pay using an outside financial institution?

Dealerships can refuse any type of financing for any reason. That said, car dealers usually refuse outside financing if they’ve lowered the price enough. . .That said, they make up for this discount, they want you to finance with them to recoup that money they have lost due to the lack of inventory on their lots.

You can always walk away from the deal if it doesn’t feel right or if the term is longer than you want. But let’s be clear: Financing is profitable for dealerships in many ways. If they know they can’t turn a profit from financing, they’re more likely to push harder to find profit elsewhere.
Discuss your plans with your credit union or banks loan department; so, they can pre-approve you, so you have the knowledge. Well informed with the rate, term, and loan details. By doing your research ahead of time and knowing what financing options are available to you, you can let the dealer think there’s still money to be made in the financing, which may strengthen your negotiating position on other parts of the transaction, like the price of the car or the value of the trade-in. Always trust your instincts and don’t sign anything that seems like a poor deal.

The Texas Office of Consumer Credit Commissioner is very concerned about this going on. They are encouraging any customer who has experienced this to contact the OCCC’s Consumer Assistance at 800-538-1579, by sending an email to consumer.
It’s your money be smart!