Can Wells Fargo Auto Financing be breaking the law?

I bought a 2004 Nissan Sentra in 2005. My credit was poor and I had nothing for a down payment, so i felt "at their mercy" if I wanted to have a car to drive. On the lot, the little Nissan had a sticker on the windshield of $11,000. I didn't even think of it at the time - I obviously felt between a rock and a hard place - so I didn't object to anything they offered me. Bottom line, the interest was high (16%) and so were the payments. After paying $353 for about 5 years, that means I had already paid $21,000. Then, I finally was able to have Wells Fargo refinance the loan and the payments were more tolerable ($192/mo). Paying that until, probably 2014, that's another $9200 (just to round off)... making the point that I am an idiot for paying over $30,000 for an $11,000 car. I feel very stupid, but I obviously didn't know what the bottom line would be when I signed the contract. It is what it is... but what is it? It doesn't even seem legal that an auto finance co. can do this kind of a deal. Is it? I'm still paying!! By the time, it's finally "paid off", I will have been making payments for about 9 years!!!

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  • 9 years ago
    Favorite Answer

    Auto finance is what I do for a living and Wells Fargo is one of the largest lenders in the Country.

    Having said that, no they did nothing wrong or illegal.

    You signed the contracts plain and simple. All terms were disclosed at the time of signing (Federal law) so the only person you have to blame is the lady looking back at you from the mirror.

    Sorry for your luck.

    Source(s): Finance Manager for a car dealer for over 12-years.
  • 9 years ago

    Did Wells Fargo take advantage of you by refinancing? I know they did what you asked them to do... should you have asked them to do this = NO. Should someone had said - it's not a good idea = yes.

    First - you didn't pay $11000 for the car. That was the initial sticker price, but you definitely had fees rolled into it - sales tax, registration, etc. And you might have had other things like an extended warranty. We also don't know any downpayment you had.

    - There is no way for us to tie back to the $353 payment but most likely it was a 7 year loan originally.

    When you finance anything (car, house, etc) - the higher the balance, the more interest you pay. When you get towards the end of the loan your interest amount is minimal because the loan is much less. instead the majority of your payment is principle.

    In 2010 you probably had 2-3 years left paying the loan. At that point, you were payng mostly principle. You could have refinanced, if you wanted but you should have kept the loan term the same (no more than 3 years, because that is how long your original loan was for).

    - However, you started with a 4 or 5 year loan and restarted with the majority of the loan going towards interest again, instead of principle.

    You can pay extra payments any time you want to pay off the car early and avoid the addtional interest you created.

    There is ALWAYS learning experiences in any kind of loan situation. Things for next time:

    - know how much you are buying the car for and the extras

    - know how long the loan is

    - when refi-ing attempt to keep the original term of the loan, or you almost always end up paying more.

  • 9 years ago

    Two observations:

    1. There is nothing wrong with paying the loan off early.

    2. The interest has nothing to do with the car. In other words, the interest does not add or detract any value to or from the car.

    $11,000/60 months = $183 In other words, if you would have paid $183 toward the principal for 60 months in equal payments, the loan would be paid.

    One final comment- It could be that owning the car increased your income producing ability by far more than the cost of ownership. If this is the case, then the car has been a good investment.

  • 5 years ago

    Truthfully I've never had a quandary with Wells Fargo. Why no longer simply have them auto-withdraw from your financial institution account every month? It is quite a bit easier. Paying over the cellphone is not riskless, anyway, so it can be quality that they do not offer it.

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  • Ian G
    Lv 4
    9 years ago

    I trust you read all of the terms and conditions of the loan when you signed on the dotted line or did you just get carried away with the thought of having a shiny new car to show off.

    You bought it, you signed for it, now you must pay it.

    Not what you want to hear but it's the most honest answer you are going to get on here

  • 9 years ago

    You entered into a stupid contract, that isn't their fault. Their job is to maximize profit and minimize risk. In your case, the risk was actually quite high due to your poor credit.

    The bottom line, you weren't forced to buy this car nor were you forced to sign the contract. You acknowledge this fact right in your post so I really don't understand your problem.

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