Vehicle purchasing question...

[WAslayer]

BIL in process of purchasing second hand vehicle..

He has never signed nor seen an OTP or even been told how much exactly they are applying(in terms of added extras they like to sneak in on top of vehicle purchase price) for at the banks for the finance..

finance manager called today, tried to anyway, to discuss approved finance..

I always thought they would need the buyers signature on the OTP before being able to submit an application to the banks for finance..?

Either way, told the BIL when finance manager phones tomorrow, to ask for the OTP and tell said person to phone back in 30 minutes, so he can at least see what, if anything, they have added to it..

 

[rvZA]

I always thought they would need the buyers signature on the OTP before being able to submit an application to the banks for finance..?

AFAIK, the OTP is not needed by the bank when an F&I on the dealership floor, or even dealership sends an application for finance to the banks. The OTP is just an agreement between you and the dealership to reserve a specific vehicle until such time finance is granted. Else they can simply sell your specific vehicle you wanted to a cash buyer while the finance application is pending.

 

[WAslayer]

AFAIK, the OTP is not needed by the bank when an F&I on the dealership floor, or even dealership sends an application for finance to the banks. The OTP is just an agreement between you and the dealership to reserve a specific vehicle until such time finance is granted. Else they can simply sell your specific vehicle you wanted to a cash buyer while the finance application is pending.

Cool, thanks..

 

[TheChamp]

Cool, thanks..

No, you were right in your initial thinking, the bank needs the OTP to see how much the client is applying for even if the application was done by the dealer there was still an OTP presented that details everything from the price of the car, extras and stuff, it's all pre approval at this stage so it's not a big deal.

What you need to do is ask the finance manager for the pre approved finance contract to see exactly what the total on the car is, I am sure it will be a lot more than what your BIL saw as advertised, then ask the dealer for a breakdown of how the cost escalated.

To be honest the dealer is being slightly slimy here and it's not a good sign, they were supposed to discuss the price and extras and agree, your BIL sign the OTP so that he is not surprised with the extra costs. The dealer is doing what dealers do to first time buyers, pretending to be helpful while scamming the unsuspecting buyer.

 

[WAslayer]

No, you were right in your initial thinking, the bank needs the OTP to see how much the client is applying for even if the application was done by the dealer there was still an OTP presented that details everything from the price of the car, extras and stuff, it's all pre approval at this stage so it's not a big deal.

What you need to do is ask the finance manager for the pre approved finance contract to see exactly what the total on the car is, I am sure it will be a lot more than what your BIL saw as advertised, then ask the dealer for a breakdown of how the cost escalated.

To be honest the dealer is being slightly slimy here and it's not a good sign, they were supposed to discuss the price and extras and agree, your BIL sign the OTP so that he is not surprised with the extra costs. The dealer is doing what deakers do to first time buyers, pretending to be helpful while scamming the unsuspecting buyer.

Lucky it's not my first rodeo and I really don't like how this has played out so far..

All of my previous three purchases I first laid eyes on and signed the OTP, before any finance applications were made, which just seems like common sense approach to follow..

I shouldn't be surprised, dealers look out for themselves first, but this is happening with the same dealer I bought a car from just a year ago and this is not how things played out then..

 

[SauRoNZA]

Brother probably signed an OTP without knowing what it was.

But it really doesn’t matter either which way. The bank won’t enter a finance agreement without a signature from him, so he will at some point see what’s been loaded either which way.

 

[WAslayer]

Brother probably signed an OTP without knowing what it was.

No, we are helping him through the process as a first time buyer.. no paper work was signed in anyway whatsoever..

 

[SauRoNZA]

No, we are helping him through the process as a first time buyer.. no paper work was signed in anyway whatsoever..

Then it’s likely just a pre-approval affordability check for finance and not much else.

Surely he must have provided something with his details on for them to get anywhere….so there must have been some kind of paperwork?

 

[WAslayer]

Then it’s likely just a pre-approval affordability check for finance and not much else.

Surely he must have provided something with his details on for them to get anywhere….so there must have been some kind of paperwork?

As I initially said, finance manager said finance has been approved and was calling to discuss the details..

All required paperwork for the application was provided, we have just never seen or signed an OTP, which I thought was required, or at least common courtesy before they would go ahead to apply for finance..

 

[SauRoNZA]

As I initially said, finance manager said finance has been approved and was calling to discuss the details..

All required paperwork for the application was provided, we have just never seen or signed an OTP, which I thought was required, or at least common courtesy before they would go ahead to apply for finance..

As I recall you only need the OTP when finally agreeing to the finance agreement.

With my wife’s last car we signed the OTP and the finance agreement right after each other on the same day we collected.

This was after the roadworthy and licensing and all that stuff was already done.

That being said we knew exactly what we were signing for and had already scratched off a lot of extras and crap including window tinting which was already on the car through back and forth via email.

 

[WAslayer]

As I recall you only need the OTP when finally agreeing to the finance agreement.

With my wife’s last car we signed the OTP and the finance agreement right after each other on the same day we collected.

This was after the roadworthy and licensing and all that stuff was already done.

Which would have been a fine approach, but we have no idea what amount the finance application was done for and they could have added a million extras we don't want or even need, to the application..

 

[SauRoNZA]

Which would have been a fine approach, but we have no idea what amount the finance application was done for and they could have added a million extras we don't want or even need, to the application..

It’s a cart before the horse problem.

When it comes through simply tell them to change it and try again.

Not a big deal at all.

Never accept the first offer anyway, always send it back tell them to do better.

 

[XPD]

Unless it’s a low stock availability car, up front OTP is not required for finance application, provided you sent the required docs (app form, bank statements etc) to apply for finance. It’s actually a beneficial position to get finance approved and validated based on whatever the cost and extras the dealer applies for then you in a position of power once the finance is approved. You then say what you willing to pay and be willing to walk away if the dealer doesn’t budge. A dealer will almost never walk away from a client with approved and validated finance. Never pay for on the road fees, licence, smash and grab and look carefully at vaps offered (some are good like shortfall cover) and depending on market prices (check autotrader or cars.co.ZA) knock some thousands of you offer price as well. This works for me all the time. The dealers are particularly desperate come last week of a month.

 

[TheChamp]

Unless it’s a low stock availability car, up front OTP is not required for finance application, provided you sent the required docs (app form, bank statements etc) to apply for finance. It’s actually a beneficial position to get finance approved and validated based on whatever the cost and extras the dealer applies for then you in a position of power once the finance is approved. You then say what you willing to pay and be willing to walk away if the dealer doesn’t budge. A dealer will almost never walk away from a client with approved and validated finance. Never pay for on the road fees, licence, smash and grab and look carefully at vaps offered (some are good like shortfall cover) and depending on market prices (check autotrader or cars.co.ZA) knock some thousands of you offer price as well. This works for me all the time. The dealers are particularly desperate come last week of a month.

That assuming the client is well versed on the process of buying cars, many first time buyers end up signing for extra costs they cannot explain, because all they want is the car. Ask any first time buyer about the interest they got and the total cost in extras and other services they paid for, you will most probably be met with a blank stare.

Doing things like that most often than not end up benefitting the dealer.