Be careful of LS "Financing"

[Maxify55]

Yeah, when I bought mine, years ago. They tried that on me {LS Corp. or their financing Agcy}
Before signing I'd checked with my Credit Union. I like keeping my money local. whenever possible.
The CU matched the rate and 84 mth time frame.
I paid it off in ~36. I just wanted the cheap rate offered for 84 mos.
A personal signature note would've been a hefty rate....even for 36 mos.

 

[pevrs114]

Unfortunately, it's not going to matter what they tell you in the dealership. It matters what's written. That's basic UCC contract law, and is in effect in most every state. I'm willing to bet good money that each of these sales contracts, and the financing contract that goes with it, includes a merger clause which excludes anything not in the written agreement.

It's not necessarily anybody being shady, the dealership may not have any idea that what they tell you isn't binding.

I'd post a link to an article on merger clauses, but I have lurked too long without posting and I can't post links, yet.

 

[5030]

I'm loosing something in the comments... Don't Rule 53s apply?

 

[Grumpycat]

Two terms to watch for in a loan contract is "Rule of 78's" and "simple interest." You always want simple interest but if you pay only the monthly payment for the full term of the loan the cost is the same as Rule of 78's. With Rule of 78's you pay more of the interest up front but can still pay off the loan early to save, its just that you pay more for the same interest rate than simple interest.

 

[Otto33]

Just ordered a new MT 225s and was discussing financing with my dealer. I told him that I noticed that the 0% for 84 months deal had been taken down from the LS website.
He said that the dealers basically forced LS to remove all of the 0% language because the only way a customer could qualify for the 0% was if they increased significantly increased their quote (well into Kubota, NH, Kioti, Deere territory)
Apparently everyone agreed it had been a stupid idea and now all of the 0% stuff is gone.

 

[Grumpycat]

Somebody always has to pay the finance charge from somewhere. Usually the dealer has to pay a significant portion, as motivation to get the customer to finance elsewhere.

 

[LawnSpecialties]

I spoke with my LS dealer last week about the 0% deal. He told me the 0% came with an extra $4800 charge. Not a down payment but a charge. I didn't even go further with it. But must admit, it kind of p****d me off if this was true.

 

[neilkingent]

All brands do the same thing it seems.

 

[Gale Hawkins]

It has been a tool to drive new sales for like forever.

% finance - Wikipedia

 

[LS Tractor Owner]

So, to update this thread, today I had a rude awakening! I went to payoff the outstanding balance of the tractor loan through Wells Fargo. They charged the full amount of "interest" on the "contract", plus charged a "prepayment fee" of a few hundred bucks, and the daily interest accrued this month.

Before everyone gets on the "read before you sign" band wagon, I did. In all the fancy legal mumbo jumbo, there is a clause that states the interest would be adjusted to the value of the contract at the time of "buy-out". Not "payoff of loan". Just reading the clause makes you believe there are no prepayment penalties, and interest on the loan would cease to accrue at time of payoff. ..... just like every other standard " loan" available.

Needless to say, it cost me more to payoff my loan early, than if I continued paying it monthly for the next 5 years!

So, after elevating my blood pressure, I called my dealer. He recently became aware of this same situation occurring with a couple of his other customers. He told me that he was in process making LS corporate aware of what was happening. There were not supposed to be these issues / clauses with Wells Fargo Financial when they presented the program. He probably can't do anything about it, they were "misinformed" by Wells Fargo about the program. The dealer was upset with this for sure... he was unaware of this "contract" issue until only recently. Bad for HIS business....

Bottom line.... the only way to stop Wells Fargo's "legal fraud" is to have another class action lawsuit against them.... I will jump onto that wagon for sure!