Driver gets financing on a 2023 Toyota Highlander by borrowing on a new credit card without knowing the car’s price: ‘I didn’t really know about stuff like that…’
In September 2024, the average American new car payment is $734. CNN reported that in Q2, the average car loan interest rate hovered around 6.84% for new cars and 12.01% for used vehicles. These being averages, you can bet that there are folks tangled in financing situations that are much “worse” relative to others. Here’s a good example.
Guy says the dealer had him open a credit card and use a cash advance for a car loan down payment
Yusuf Benallal runs Asheville Auto Center in North Carolina. He posts conversations he has with people looking to trade in their cars. Unfortunately, many of the calls involve people who seemingly lack financial literacy, with crushing results.
In this call, the owner of a 2023 Toyota Highlander claims that the car salesperson had him borrow on a credit card they had him open. With those funds, he secured a car loan.
Benallal looks surprised. When he asks the caller how much he paid for the car, the response is even more shocking.
How much did he pay for the Highlander? “They didn’t even tell me.”
Huh? Benallal hardly believes it. “They didn’t tell you the price, brother? I mean, you had to sign something…” he asserts. “You didn’t sign any paperwork?”
The caller says yes, he got the paperwork, but they didn’t tell him how much the car was in the process. “I didn’t really know about stuff like that,” he sadly explains.
Ultimately, they hash out the financing. The caller put down $1,000 using borrowed credit card funds. He secured a loan at 16%. His monthly payment is $1,056. Car insurance is another $630, bringing monthly fixed vehicle expenses to nearly $1,700. His payoff is now $44,360.
Benallal offers the caller $30,000 for the 2023 Toyota Highlander. This would leave the caller with about a $14K gap to pay before the title would be cleared for sale.
Does the caller have any money to put down toward the gap? No, not right now.
Unfortunately, this means the caller is likely stuck with his payments unless he finds another solution. His options are slim, it seems, but he could try to pay a bit extra on the loan (if the terms allow extra or early payoff). He might do this by creating another revenue stream just to address the car loan.
If you’re looking for a good price on a new or used car, check out MotorBiscuit’s seamless car buying service to compare models and get the best deal near you. And of course, make sure you understand all financing terms before entering into a car loan agreement.
