Here’s how you get out of your mess, and into a better car.

STEP 1: You’re broke right now; buy a broke person’s car for right now.

I just did a search on Yahoo Autos, for:
1) Cars within 50 miles of Los Angeles
2) Asking price between $1 and $2,000
3) Mileage of more than 10,000

I found 142 cars listed.
After sorting by mileage, the one in the middle is a 1997 Dodge Neon with 140,000 miles asking $1,000.

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STEP 2: Take the $400/mo you were planning on paying for car payments, and put it in the bank instead.

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STEP 3: March 2009: After 12 months, you’ll have $4800 in the bank.
Trade in your $1,000 beater for a $5,500 car.
Another Yahoo search:
1) 50 miles of LA
2) 10,000+ miles
3) Price between $5,000 and $6,000

This time, there’s over 1,100 cars listed.
Sort by mileage, the three near the middle are:
2001 Nissan Altima, 1994 Toyota Camry, 1994 Mercedes E-class, with 99,300 miles.

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STEP 4: Continue saving $400/mo for another 12 months. You’d've committed to giving that money to the car dealer, so you should be able to afford this, right?

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STEP 5: It’s March 2010. Now, the car you bought for $6,000 is worth about $5,000, and you have another $4,800 cash. For $9,000-$10,000, we’re looking at a 2004 Toyota Corolla, or a 2000 Mercedes C-class with about 74,000 miles.

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STEP 6: March 2011 (three years from now): Continue making that same $400/mo car payment that you were planning to make, but now, you have $4,800 cash, and a trade in worth about $8,500. Now, for $12,000-$13,000, you’re looking at some three year old cars.

YOU NOW HAVE THE SAME 2008 CAR YOU WOULD HAVE BOUGHT TODAY.
BUT YOU AVOIDED TWO FULL YEARS OF CAR PAYMENTS.
AND NEVER HAD TO OWE ANYONE A DIME
OR EVER RISKED GETTING THE CAR REPOED, BECAUSE YOU PAID CASH EACH TIME.

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STEP 7: Now for the crazy part:
Finish the last two years of car payments, but this time, put the money into a mutual fund.

Let it sit for 20 years, and watch two years of $400/mo (that you would have given to the car dealer as the 4th and 5th years of payments) turn into over $50,000.
That’s a free car.

You could also control the property by having a 6 month purchase option contract on that property and then assign your rights to a retail buyer or other investor.

Trust me, if you can find deals like that, finding the money is easy.

Regards…

If you made at least 12-payments, the F&I guy got all of his money. If you made less then that he was charged back a small percentage.

When you finance a car and buy what’s called back-end product like Gap and Service Contracts the F&I people are paid a percentage of the profit they made off of you the next month. If you do not refinance within 12-months they are free and clear, if you do refinance, they are charged back a percentage based on how quick you refinanced.

The other way that F&I people make money is they mark up the rate. Say the bank gives the dealer a buy rate of 5.99% they mark it up to 8.99% and this produces whats called reserve money. This also gets charged back if you refinance the loan before 12-months.

I doubt if he actually lied to you. People that do what we do for a living are good at our jobs and lieing to a customer is the fastest way to lose your job. The truth in lending law states that everything you purchase must be explained before you sign the paperwork.

With that said the most important thing, from my experience, in any financial position is being able to read people. You can expect to hear more lies than the truth.

Although, the numbers are important…the person presenting the numbers is more important. Do the questions you ask match the numbers?

I know many ways to “cook” a set books (if you don’t know what that means your in the wrong business). I know this because I have been doing this for 20 years.

My best advice to you, is do a study…and present this in the interview. Of course, you will have to prove that you knew it before hand.