Magic financing auto sales

Magic financing auto sales DEFAULT


Dealerships have found creative ways to deal with consumers’ negative equity in order to make more sales. Some practices are downright fraudulent, like fudging the numbers on the purchase contract in order to obtain financing.

In the article below, Young Walgenkim outlines fraudulent methods used by dealers to circumvent negative equity in order to sell more cars. This article was originally published by the Oregon Trial Lawyers’ Association.

Unraveling the Financing Magic

– By Young Walgenkim, Esq., as published in OTLA Guardian

When I tell people that I sue car dealers, the inevitable question I get is, “What is the most common violation you run into?” Interestingly enough, in my experience, the most obvious violation is also the most common one: Selling for more than the advertised price. If you are wondering, “are dealers really brazen enough to commit such blatant violations?” you have not spent much time with car dealers.

However, when you peel back the layers, this scheme of selling for more than the ad­vertised price contains further levels of deviance.

One of the first questions I ask a potential client is, “How much did you pay for your car?” It is surprising how many people do not know the answer to that question. Often, the potential client will review his/her paperwork and will be surprised to see that the purchase price for the vehicle is several thousand dollars over what was agreed upon by the parties. What happens is the salesman and the consumer come to an agreement for a certain price, then when the consumer goes into the finance office, the finance manager writes down a completely dif­ferent (and higher) price for the vehicle. Of course, this practice amounts to com­mon law fraud. It is also a violation of the Unlawful Trade Practice Act (UTPA) and other consumer statutes. But, some­times the cases are as simple as that. The dealer, knowing that the consumer mostly cares about the monthly payment amount, can get the consumer to ignore the purchase price. It is true that a non-sophisticated consumer will not attempt to understand the byzantine retail install­ment contract (RISC). Sometimes, the dealer does this to make an additional profit from the consumer, but most of­ten, the dealer is engaging in a fraud against the finance company, as wel l as the consumer, in a practice that is called “negative equity adjustment,” or as dealers call it, “financing magic.”


Adjusting for “extras”

Many people are familiar with this tactic. Joe Consumer comes into the lot to trade in his car that is worth $3,000 but he still owes $5,000, and therefore has a negative equity of $2,000. He wants to buy a car that is worth $20,000 but has no money for a down payment. Bob Dealer knows that the finance company will never approve a loan for $22,000 on a car that is worth $20,000 for a buyer who has not paid anything for a down payment. So, the dealer shifts the num­bers (see box below) around by adding $3,000 to the price of the trade-in and the price of the new car. Now the loan says the consumer is trading in a car worth $6,000, with a loan of $5,000, thus paying $1,000 down to buy a car for $23,000.


The dealer not only thinks that he has done nothing wrong, but he actually thinks he has helped the consumer by working “financing magic” to get him into a car he wants.

Ignoring for a moment that the dealer has just committed fraud on the finance company, this practice is a viola­tion of Oregon’s Unlawful Trade Prac­tices Act and the federal Truth in Lending Act. It also harms the consumer by failing to disclose that he or she will now be on the hook for two car loans. The Oregon Attorney General provides this commen­tary on the rule against negative equity adjustment:


This rule requires that a consumer be clearly informed that the nega­tive equity in his/her trade-in has been added to his/her purchase or lease. Compliance with this rule will eliminate those situations where a consumer believes (s)he has pur­chased a vehicle at one price, only to discover after closer examination of the deal documents that the negative equity has been added to the cost of the new transaction. The consequences are enormous. The added cost of financing can add up to thousands of extra dollars for a consumer, plus makes it even harder to trade in the new vehicle at a later date because the negative equity on the new vehicle is even more than the original trade-in. OAR 137-020-0020(3)(aa) OFFI­CIAL COMMENTARY.


Dangerous practice for consumers

So, after being made aware that nega­tive equity adjustment violates the UTPA, dealers will cease this practice right? There are several reasons why a change in their business practice is not very likely. First, this practice is extreme­ly profitable. In the second scenario above, the dealer has made a sale to a consumer who otherwise would not qualify for financing. As a result, he re­ceives $22,000 from the lender. After paying off the $5,000 loan for the trade-in, the dealer has $17,000 and another car that he can sell for well above the $3,000 he paid the consumer. With a few simple maneuvers, the dealer can sell a car to someone with a negative down payment, while passing on the risk to the lender. Second, the dealer actually thinks he is doing a favor for the buyer. He believes that he is helping the consumer by working “financing magic” to get him into a car he wanted. What the dealer fails to recognize is that the consumer is not given adequate information to make an informed decision about whether to make the purchase. Finally, this practice is so commonplace that dealers refuse to believe it is illegal. When their competi­tors are all doing it, it is very difficult for them to believe that negative equity ad­justment is not allowed. In fact the practice of negative equity adjustment is so prevalent that dealers not only do not know that it is illegal, they raise it as a defense.


Hidden pricing

I have had a few cases where I alleged selling for more than the advertised price. On all these cases, the dealers raised negative equity adjustment as a defense by saying they “rolled the trade-in into the loan.” At this point, the dealer is in quite a jam. Now he has admitted to negative equity adjustment, thus violat­ing the UTPA and the TILA, and admit­ted to committing fraud against the lender, who now has a right of action against the dealer as well. In addition, the dealer has now put the RISC and the bill of sale into question.


Usually, these auto fraud cases involve many more UTPA violations by the dealer, such as, misrepresentations of quality, misrepresentations of warranty­and failure to disclose material defects. In nearly every case, dealers seek to evade liability by hiding behind the “as is” language and other disclaimers in the contract. They tell the consumer that the car is in “perfect condition,” “it’s been inspected,” “it’s never been in a crash,” and “the previous owner was a poor old lady who only drove it to her bingo games.” Then they turn around and have the consumer sign the contract disclaim­ing any and all warranties, express or implied, prior vehicle history, any prom­ises that could have been made by the dealer and its agents, and everything else under the sun. Now, they are saying that the contract isn’t really what it says it is. On the one hand, the dealer wants to say that the consumer is bound by all of the broad disclaimers on paper, regardless of what the consumer actually understood the agreement to be, but they also want to say that even though the contract says the consumer is purchasing the car for $23,000, the deal was really for $20,000. Dealers can’t have it both ways. Either the contract is what it says it is, and the dealer sold over the advertised price, or the contract isn’t what it says it is, and the dealer has committed unlawful negative equity adjustment, and invali­dated all disclaimers. Either way, the dealer has violated the UTPA, and will be on the hook for my attorney fees. Perhaps with a constant reminder and a bit of luck, we can get these dealers to actually start being honest in their con­tracts.

Young Walgenkim represents consumers in auto dealer fraud and various other con­sumer law issues. Walgenkim is a member of the OTLA Guardians of Civil Justice at the Friends level. He is a founding member at Hanson & Walgenkim LLC, 838 Com­mercial St. NE, Salem, OR 97301.


Contact us for any questions or for more information.


Magic Financing in Denver, Colorado, CO. Buy here pay here Dealer in CO with Address, Contact Number, Photos, Maps. View Magic Financing, Denver, CO on Magic Financing located at 6385 Federal Blvd, Denver, CO 80221, United States is one of the top player listed here in the category Buy here pay here Denver car lots Dealers. Magic Financing are 4.7 rated out of 5 by 172 users reviews.

Have you ever considered buy here pay here near me car dealerships? If so, have you heard of them? There are many advantages to buying a car through a buy here pay here dealerships compared to purchasing a vehicle through an individual or a private seller. Located at 6385 Federal Blvd, Denver, CO 80221, United States, Magic Financing is dealer you can consider. The biggest difference between a buy here pay here dealerships and a typical local dealership is that with buy here pay here dealers, nearly everything goes through your local auto dealer directly. You can contact Magic Financing using the contact details given below.

How to book an appointment with Magic Financing?

At buy here pay here near me, we made it easy to book appointment with best dealers. You can book appointment with Magic Financing either by calling their contact number (303) 298-1155 or fill the contact form above.

How Buy Here Pay Here Denver Works?

When the bank says no to your car loan, the buy here pay here Denver car lots comes to guide you in the right direction to help you get the car of your choice. The process of buying used cars from a buy here pay here Denver dealer is pretty simple which starts with your visit to any of the dealers listed here. You tell them your car requirement including a specific car model you’re looking for and overall budget. Based on your budget, the dealer shows you a number of cars with desired car models. Once you find the car of your choice, the dealer works with their own exclusive lender for financing the car. The dealer completes the small paper work and hands over the vehicle to you mostly on the same day.

Any Advice on BHPH dealership Denver?

Generally, we advice customers to go to the traditional lenders first such as banks, credit unions, or finance company. But if your application gets rejection from all of these traditional options then BHPH dealers are the one who can make things possible for you irrespective of your poor credit score.

Average Credit Score to Buy a Used Car from BHPH dealer Denver?

The credit score becomes very crucial when it comes to getting loan approval especially when it is through traditional financer like bank or credit union.


  • Monday: 9:00 AM u2013 7:00 PM
  • Tuesday: 9:00 AM u2013 7:00 PM
  • Wednesday: 9:00 AM u2013 7:00 PM
  • Thursday: 9:00 AM u2013 7:00 PM
  • Friday: 9:00 AM u2013 7:00 PM
  • Saturday: 9:00 AM u2013 7:00 PM
  • Sunday: Closed

Rated 4.7Out of 5 from 172 reviews

  1. 1993 honda accord
  2. Expanding brain meme
  3. Earth cake ideas
  4. lesson 22 answers

After eating yogurt, I rushed to gallop through the meadows. I was in a wonderful mood from the wonderful weather and fresh air. Only now I was not insured against accidental falls.

DealerLink Special Finance Leads - Auto Sales Leads - Automotive Direct Mail - Bankruptcy Mailers

Then Nyusha jumped off Ruslan, revealing to the observers a gorgeous big boy's penis shiny with grease, finally took off her shorts, turned her ass. To Ruslan and rested her hands on the log. Ruslan deftly caught the tube, got up from the log, and, having smeared his penis and girlfriend's ass with Vaseline, began. Impatiently to go in.

Nyusha groaned in pain, but ordered Ruslan not to stop until he completely entered the full length, after which he began to gradually.

Sales auto magic financing

He slightly pulled his lips to me, suggesting thereby touching them with a non-duty kiss, I smiled, I felt so easy. And cheerful that I put my hands on his shoulders and pressed my lips to his lips. I felt a heat in myself. It seemed that I kissed him for only a moment, but my back was sweating all over, without tearing my lips off, I said to Slavka in mute silence, You are.

A tempter of a serpent, I didnt see the answer in his eyes, but I felt his hands biting my sagging breasts.

Magic Financing with DJ A-Rich

Sometimes you need a woman to relieve: hmm, tension. I apologize that because of my early childhood I cannot be useful in this, let alone interest you as a woman. To this I could not answer anything. Vika turned to the window.

Now discussing:

The girls sat in front of us and desperately masturbated between their legs, accompanied by loud moans. We began to finish almost at the same time: the girls began to convulse, uttering long screams; the boy and I both groaned and began to pour sperm on our. Friends.

235 236 237 238 239