Financing question, is it normal for a dealer to ask me one week after delivery to remove the freeze on my credit reports to complete the financing?

[Mbocach]

I purchased a Telluride and had it delivered to me on 7/1/19. They also took my trade in at the time. I have exceptional credit (853) and was already pre-approved with BofA at a rate of 2.9%, however I agreed to the KIA financing of 5.9% in order to get the $1500 financing rebate, with plans to refinance with BofA in the coming month. Unfortunately, this past Sunday (7/7/19) I was a victim of a fraudulent home leasing scheme and didn’t realize that it was an identity & credit theft scheme until around 2 hrs after submitting the completed lease application. The form included lots of personal info, including social security, job history, copies of proof of income, copy of my drivers license, etc; and of course my signature. So this past Sunday, I signed up for a credit & identity theft monitoring service which included freezing my credit reports at all three major reporting agencies. Today is Tuesday (7/9/19) and I just received a call from the Kia finance manager that i needed to unfreeze my accounts so they can complete the financing. I’m confused because I’ve been driving the vehicle for a week and they took my old vehicles as a trade. The finance manager told me that they still needed to shop around to find the best financing deal, but this doesn’t make sense to me because I agreed to Kia Financing in order to get the cash rebate. In addition, I’m concerned about unfreezing my credit and leaving it wide open for a day as he has requested it, especially since it’s so soon after having all of my personal info sent to these home leasing fraudsters.
Is it normal to drive a new car for a week and be told that the financing wasn’t completed yet even when you have exceptional credit? Why do they need to pull my credit again? It would be greatly appreciated if anyone can shed some light since it makes me sick to my stomach to think that I need to lift the freeze right now and the potential exposure to continued fraud. Ironically this is why I’m paying for this identity & credit fraud monitoring service.

 

[ga1322]

I purchased a Telluride and had it delivered to me on 7/1/19. They also took my trade in at the time. I have exceptional credit (853) and was already pre-approved with BofA at a rate of 2.9%, however I agreed to the KIA financing of 5.9% in order to get the $1500 financing rebate, with plans to refinance with BofA in the coming month. Unfortunately, this past Sunday (7/7/19) I was a victim of a fraudulent home leasing scheme and didn’t realize that it was an identity & credit theft scheme until around 2 hrs after submitting the completed lease application. The form included lots of personal info, including social security, job history, copies of proof of income, copy of my drivers license, etc; and of course my signature. So this past Sunday, I signed up for a credit & identity theft monitoring service which included freezing my credit reports at all three major reporting agencies. Today is Tuesday (7/9/19) and I just received a call from the Kia finance manager that i needed to unfreeze my accounts so they can complete the financing. I’m confused because I’ve been driving the vehicle for a week and they took my old vehicles as a trade. The finance manager told me that they still needed to shop around to find the best financing deal, but this doesn’t make sense to me because I agreed to Kia Financing in order to get the cash rebate. In addition, I’m concerned about unfreezing my credit and leaving it wide open for a day as he has requested it, especially since it’s so soon after having all of my personal info sent to these home leasing fraudsters.
Is it normal to drive a new car for a week and be told that the financing wasn’t completed yet even when you have exceptional credit? Why do they need to pull my credit again? It would be greatly appreciated if anyone can shed some light since it makes me sick to my stomach to think that I need to lift the freeze right now and the potential exposure to continued fraud. Ironically this is why I’m paying for this identity & credit fraud monitoring service.

Someone else will probably be able to answer you more in detail and with some experience, but I’m pretty sure that when you finance with Kia, they are using some other financial institution. That’s probably what they mean by shopping around. Not sure why they wouldn’t have it all processed unless they are just slow. Mine was done within a few days.
Also just an FYI, with that credit score, you should have been able to get the 1500 rebate and 1.9% for 48 or 2.9% for 60. I know you’re refinancing but just to make you aware of how the dealership is treating you

 

[Mbocach]

Someone else will probably be able to answer you more in detail and with some experience, but I’m pretty sure that when you finance with Kia, they are using some other financial institution. That’s probably what they mean by shopping around. Not sure why they wouldn’t have it all processed unless they are just slow. Mine was done within a few days.
Also just an FYI, with that credit score, you should have been able to get the 1500 rebate and 1.9% for 48 or 2.9% for 60. I know you’re refinancing but just to make you aware of how the dealership is treating you

Thanks for your reply, I even asked the finance manager about the 4.9% rate since I was financing at 72 months but he told me some BS line about how that rebate had changed on 7/1. I even asked if they were marking it up a point to 5.9% and he said “absolutely not”. This guy has been shady from the beginning. He had to reprint the paperwork three times after I found “mistakes” with the numbers. The first time was listing the purchase price $1000 more than I had agreed to with the salesperson! The second time was after I declined the pre-installed security system. He begged me to take it at his cost of only $395 since it was already installed but I politely declined. He reprinted the paperwork but surprise! the $395 cost was still listed! Then he acted all surprised “I have no idea how that happened, please forgive me”. By the way, this dealer is Kia of Irvine located south of Los Angeles.

 

[Mbocach]

Thanks for your reply, I even asked the finance manager about the 4.9% rate since I was financing at 72 months but he told me some BS line about how that rebate had changed on 7/1. I even asked if they were marking it up a point to 5.9% and he said “absolutely not”. This guy has been shady from the beginning. He had to reprint the paperwork three times after I found “mistakes” with the numbers. The first time was listing the purchase price $1000 more than I had agreed to with the salesperson! The second time was after I declined the pre-installed security system. He begged me to take it at his cost of only $395 since it was already installed but I politely declined. He reprinted the paperwork but surprise! the $395 cost was still listed! Then he acted all surprised “I have no idea how that happened, please forgive me”. By the way, this dealer is Kia of Irvine located south of Los Angeles.

I just sent this email to the finance manager and copied the general manager:
Hello Sammy-
I wanted to follow up after speaking on the phone with you earlier.

As I told you, I was a victim of an identity & credit fraud scheme this past Sunday (7/7/19) which involved submitting a completed rental application and included my personal information such as social security number, residential address history, job history, birthdate, etc. It also included copies of my drivers license & tax returns for income verification since I’m self employed. I realized this was a scam around 2 hrs after submitting the information, but obviously it was too late to do anything about it. I immediately signed up for an identity & credit theft monitoring service and notified all three major credit reporting agencies to freeze my accounts as of 7/7/19.

Since it’s been a week since I purchased my Telluride, I was very surprised to get the call from you telling me that I needed to unfreeze my accounts with the credit reporting agencies. You even gave me a copy of my credit score that you ran on 7/1/19 so I’m confused why additional reports need to be pulled at this time. As displayed on the printout you gave me, my credit score is rated exceptional at 853 so I’m surprised that I’m hearing anything additional a full week after driving the car off your lot.

You mentioned that you are shopping around my loan to get better financing, however I’m not interested in releasing the security freeze in order for you to shop it around. The possibility of these fraudsters being able to damage my credit and/or identity while the freeze is lifted is simply too great for me. Also, I have no problem with the 5.9% rate that you told me was the rate of financing through Kia. If you can’t secure the financing as promised through Kia, I will simply use my pre-approved loan through Bank of America. They have already pulled my credit report and I have a letter from them approving the financing.

Please let me know if Kia will indeed be the financing company as agreed upon on 7/1/19 or if I should proceed with using Bank of America for the financing.

Thank you-

______________________________

 

[Tim-in-CA]

Don’t do it. You have the vehicle, check your report to see if an inquiry came from KMF. I’d also call KMF as well. 5.9% is also very high. They are trying to screw you.

 

[Mbocach]

Don’t do it. You have the vehicle, check your report to see if an inquiry came from KMF. I’d also call KMF as well. 5.9% is also very high. They are trying to screw you.

I agree 5.9% is high. I was already pre-approved with BofA at only 2.9% so I agreed to the 5.9% in order to get the $1500 cash rebate and intended on refinancing with BofA in the future. I was going to wait at least one payment cycle to be nice so the dealer would get his commission for placing the loan with the bank. But now I don’t feel like I want to have any type of relationship with them for one minute longer than I need to after Sammy keeps feeding me a bunch of nonsense.

 

[Tim-in-CA]

I agree 5.9% is high. I was already pre-approved with BofA at only 2.9% so I agreed to the 5.9% in order to get the $1500 cash rebate and intended on refinancing with BofA in the future. I was going to wait at least one payment cycle to be nice so the dealer would get his commission for placing the loan with the bank. But now I don’t feel like I want to have any type of relationship with them for one minute longer than I need to after Sammy keeps feeding me a bunch of nonsense.

You have no obligation to the dealer, they started out by screwing you with the high interest rate. Your paperwork should have the financier... if it’s KMF, call them directly to straighten it out.

 

[mrmac]

My bet is the dealership is trying to get another lender to buy the deal. With your score, there are many lenders who will pay the dealer handsomely for a loan at 5.9% interest.

For example:

A $45,000 loan for 72 months at 3.9% would equate to $5,542.90 interest to the lender.

The same loan at 5.9% equals $8,543.29 to the lender.

As such, a lender will be willing to pay the dealer at least $2,100 (70% of the $3,000 difference in interest) to buy your loan. While the dealer will have to pay KMF back the $1,500 rebate they gave you, they can afford to do that and make an extra $600.00 by selling your loan.

Knowing this, you can decide whether or not to unfreeze your credit.

Ultimately, you should immediately refinance this loan with BofA and really put the screws to the dealer. By refinancing within 90 days, your dealer will have to repay that $1,500 rebate to KMF and have to repay the $2,100 the other lender paid to buy your loan. That's what stinky dealers deserve, IMO!

______________________________

 

[Mbocach]

My bet is the dealership is trying to get another lender to buy the deal. With your score, there are many lenders who will pay the dealer handsomely for a loan at 5.9% interest.

For example:

A $45,000 loan for 72 months at 3.9% would equate to $5,542.90 interest to the lender.

The same loan at 5.9% equals $8,543.29 to the lender.

As such, a lender will be willing to pay the dealer at least $2,100 (70% of the $3,000 difference in interest) to buy your loan. While the dealer will have to pay KMF back the $1,500 rebate they gave you, they can afford to do that and make an extra $600.00 by selling your loan.

Knowing this, you can decide whether or not to unfreeze your credit.

Ultimately, you should immediately refinance this loan with BofA and really put the screws to the dealer. By refinancing within 90 days, your dealer will have to repay that $1,500 rebate to KMF and have to repay the $2,100 the other lender paid to buy your loan. That's what stinky dealers deserve, IMO!

Thank you for helping explain this!

 

[Rondakay]

Thank you for helping explain this!

I second @mrmac - I would refinance as soon as possible!

 

[mrmac]

Thank you for helping explain this!

My pleasure

 

[G-636424]

Someone else will probably be able to answer you more in detail and with some experience, but I’m pretty sure that when you finance with Kia, they are using some other financial institution. That’s probably what they mean by shopping around. Not sure why they wouldn’t have it all processed unless they are just slow. Mine was done within a few days.
Also just an FYI, with that credit score, you should have been able to get the 1500 rebate and 1.9% for 48 or 2.9% for 60. I know you’re refinancing but just to make you aware of how the dealership is treating you

That is very useful information because I am in the same boat with BOA and my own financing and was told the same thing from the Kia dealer to refinance. There is a guy on Youtub called Marco White Board and he goes over how all the financing works and how the additional % goes to the dealership as profit. If it were me, I would not unfreeze anything.

______________________________