Tips on Buying Cars: New Car Contract, contract question, car contract

Question
QUESTION: I live in Indiana and I signed a new car contract for a car that I cannot afford.  I felt pressured to make a deal by the finance manager when we were having trouble getting financing.  I wanted to go through my credit union and he said they are closed and he needed to get all Cash for Clunker deals settled that day (Sat) even though the program is not up until Monday.  I was so nervous and overwhelmed and he kept changing rates and numbers and I don't know why i signed this deal.  I cannot afford it and I don't know what to do to try and get him to tear up the agreement.  I plan on going there first thing tomorrow am (Monday).  I see my clunker is still in the lot.  Any insight as to how I might get him to agree to rescind the deal?  I don't believe he has to do this based on Indiana law.  Thank you,
Karen

ANSWER: Karen,

Thanks for your question.  The dealer is not required to rescend the deal, unless they just want to.  Now, with all of that being said, you can cancel any backend product that you may have purchased, although all of those options have value.  I would talk to the sales manager and explain the situation to him.  Also, I would go to your credit union and see if they can refinance the vehicle for you at a lower rate.  Most dealers were finalizing the deals on the CARS program for Saturday, because they have to have them submitted by Monday night and they need all day on Monday to submit them because of the backlog.

Hope this helps.

Thanks - JB

---------- FOLLOW-UP ----------

QUESTION: Thank you JB.  Just to let you know I did go to the dealer this morning and they would not rescind the deal.  They did offer to buy the car back from me now as a used vs. new car at about $5000 loss.  About $1600 of the $5000 is for an extended warranty I purchased.  I don't know if I should take him up on his offer.  He said there is no hurry because it can't go completely through until the title comes in.  He told me to drive the car for the next couple three weeks.  I don't have to decide right now.  He also offered to see what he could do on the price of a used model (because I asked about that option).   If I sell it back, in essence I just gave him my clunker for which he will get $4500 from the gov't. and I would also get to give him another $5000 for the pleasure of driving a new car for a few precious weeks.  I have no one to blame but myself.  Lesson:  Do your homework before signing on the dotted line.  I feel greatly ripped off and I am scared I will have financial difficulties making the payments a few months from now.  Karen
Karen

ANSWER: Karen,

That is very disheartening to me.  Let me ask you this question:  Do you know who you are financed with?  If you do, then I would call and talk to them, and tell them that you don't think that you can afford the car payment as it sits, and see if they are still willing to fund the contract.  The reason that I ask this question is that a lot of lenders will do what is called a welcome call before they fund the contract to the dealership.  In this call they ask you all sorts of details about the loan and your credit application.  Usually these calls are only done with customers that have credit issues and a deal that was difficult for the dealership to get bought.  I obviously don't know if this is your situation, but if so, make sure that you tell them when they call that you aren't sure you can afford the payment.  

With this being said, you have learned a difficult lesson.  Don't sign the paperwork if you don't think you can afford the payment.  Some of the responsibility falls on you, and I don't mean to be rude, but that is just the facts.  At the same time, some of the responsiblity falls on the dealership as well.  If I were you, and you are worried that you can't afford the car, don't trade it in with that dealership. Go to another dealership and see what they are willing to give you for a trade in.  Another dealership may be willing to work with you a little more as sad as that may be.  

Let me know if you have any other questions and I will be glad to help you thru them.

Thanks - JB

---------- FOLLOW-UP ----------

QUESTION: JB - Forgot to mention that the payment is $649/mo for 72 months.

Answer
Wow.  That's a huge payment for that vehicle for 72 months.  Now, all I can do is recommend that you look around at other Toyota dealerships, or other car dealerships, and see if you can get more for your Venza at those other places.  A good thing to try would be find a car dealership that sits right next to a Toyota dealership and see what they would be willing to give you, and see if they have anything that you would want.  Toyota Financial will not make a welcome call, so that idea goes out of the window.  When you talk to these other dealerships, DO NOT tell them how much Toyota will give you for the vehicle.  

Let me know how it all plays out.

Thanks - JB