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Tips on Buying Cars/Warranty on Financed Car


I financed a car for my son.  It is used and has a 12 month powertrain warranty.  Total purchase price was $6,200 we put down $1,000. Amount Financed was $5,200. We bought the car in may and there is now $5,043 left they said. It started making noise so we brought it back for them to look at. They said they have to get us another car because the engine is shot. How does this work now? I don't want to get ripped off for what we already have paid so far and I don't want the payment to go up. I'm a single mom and don't want them to take advantage of me so please tell me what I should be aware of and how this works if you know.  Thank you soooo much!


car guy
car guy  
I need a little more info...

First off what state are you in?
Secondly, when you say it had a 12 month powertrain warranty was that something that they put on their cars or something you negotiated for or?
Do you have an actual warranty certificate of paperwork?
Is there an insurance company behind the warranty or just the dealer? and lastly
was this an independent dealer or a franchise dealer? OOps one more
Is the car financed through a bank or credit union or finance company or is the dealer carrying the paper?

In the mean time is where you are at. If I were guessing I would guess that the warranty was included by the dealer as part of the way he markets his used cars and so he is probably on the hook for the repair bill. He has decided that it makes more sense for him to take you out of that car and put you into a different one and then he can run yours thru the auction w/no guarantee and get what he can for it. There three ways this can be done ...only one of which you should be agreeable too.

1. He can show the old car as a tradein on the new car (this is where it matters where the car is financed)and there is no way that you will not be screwed doing it this way. He will want to profit from this new transaction and so you will be financing the profits from the old deal and the new deal all in the next deal.

2. He can (and should) unwind the old deal (once again where it is financed matters alot here) and put together a new deal with no trade and with the paperwork showing your original 1,000 down on it ...this is the only way (or at least the preferred way you should agree to this...

3. You could find a new car for roughly the same money and have the bank do whats called a substitution of collateral which means they give the dealer the title to the old car and the dealer gives him the title to the new car and the payments term and rate on the loan stays the same and everything continues just like nothing happened...this way may work in your favor and is a possibility but you will need to be careful that you don't get traded into a worse position than you are in ...I can help you with that

4. I guess there are 4 options not 3 lol ...4th is you say no way Jose lease fix my car under my warranty

Get back to me with the additional info and I will get real specific with you


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Roger Alvey


I can answer any question about the car buying process. I am a recognized industry expert on all issues regarding auto finance, including sub prime and buy here pay here financing, I can answer questions about car lock out systems, GPS monitoring by your bank, and about auto recovery methods and defenses. I am a 20 yr car industry expert and can tell you what to look for in a used car, how to negotiate the deal, help with how to market your own car, and how to negotiate with the internet department of any car store. I can tell you every single way the dealer is set up to beat you and how to avoid those traps, I can discuss all aftermarket and extended service contract products you will be offered in the finance process, I have lectured extensively on "The Best Way to Buy a Car" to civic groups and university students. I am a credit expert and can tell you what the dealer and banks are looking for and the rate you can expect to pay. HERE IS THE LINK TO MY OTHER ALLEXPERTS CATEGORIES WHERE I HAVE ANSWERED LOTS OF QUESTIONS HERE IS A LINK TO MY BLOG


20 years industry experience in top management of dealerships and dealer groups. Recognized industry expert since 2004 in the Top 10 industry experts for The Gerson Lehrman Groups Auto Industry Council. I also do consulting work for Atheneum Partners, Expert 360, Expert Connect and Coleman Research. I have been a franchise owner and understand all facets of the auto industry from the time the car leaves the factory until it leaves the lot with it's new owner. I have written training materials for both the prime and the subprime sales and finance process.

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