What do you think a fair interest rate on a used car loan should be? It’s certainly not 14%, according to a swarm of users who responded to a video posted by this car salesman.
J Rod (@jrodsellscars) posted a viral TikTok sharing what he called a “perfect” sales experience. However, throngs of commenters who replied to his video, which amassed 169,000 views, thought the buyer was “done dirty.”
Seamless experience
“I just sold a car to the most perfect first-time buyer,” the TikToker claims. Then, he goes on to explain what made the customer such an ideal patron. “This gentleman came in, he saw a car that we had online. It was a 2019 Toyota Camry, priced like $2,000 below the market.”
Depending on which mechanic you talk to, finding a good deal on a used Toyota is near-impossible. Which may have played a part in the prospective car buyer’s behavior as part of this sale.
“At first he just wanted to look at the car. Open the door. Make sure everything looked good,” he says. “He connected his phone. I threw him the keys I told him, ‘Listen take your time make sure you like the car. If you need any help I’m inside.’”
According to him, the buyer came back and declared the car “the one.”
@jrodsellscars This is how you buy a car 🎯!#carsalesman #approved #dealership #carbuyingtips #firsttimebuyer #jrodsellscars ♬ original sound – jrodsellscars
Down payments are king
It appears as if J’s laid-back approach, combined with the customer’s knowledge of what he wanted, helped seal the deal.
“So, ended up doing a credit app,” he says. “He’s a 650 score. Makes a little bit over $3,000 a month from Amazon, so full-time work at Amazon.”
However, his enthusiasm when mentioning how much cash in hand the buyer was willing to put towards the car was telling.
“Came with six g’s down baby,” he says. J isn’t the first salesperson to highlight the efficacy of negotiating a car deal with a big down payment. The Daily Dot reported on another seller who went so far as to say cash down nullifies poor credit scores.
“Came with six g’s down. Pretty much an instant approval through Santander,” J says.
J says the rate was about 14% which “wasn’t bad for a first-time buyer.”
“Gosh, he came with the money down. He bought a quality freaking car,” J says. “Car’s gonna last forever. And he’s fully protected. So, I mean, it really event doesn’t get better than that.”
Is interest too high?
According to Bankrate‘s list of average interest rates for folks with 650 credit scores, the customer in J’s video is in the ballpark. Applicants with credit scores ranging between 601-660 can expect around a 13.72% interest rate on a used car loan. Ones for newer vehicles are significantly lower at 9.62% for that range.
Average rates seem to vary by state as well. Maine appears to have the lowest total average at 9.48%. Mississippi’s the highest at a 13.65% average interest appended to car notes.
However, it’s best to not always trust the figures offered to you by a single lender. Many folks would argue that financing through the dealership is almost always a bad idea. This is because, they argue, dealerships are often financing directly through the same banks most people would approach for a loan. As a result, sometimes dealerships tack on extra percentage points on that interest to juice more money out of the sale. Which means you’re effectively paying a “finder’s fee” of sorts.
However, some weigh the pros and cons of self-financing and going through a dealership. According to Spero Financial, sometimes auto manufacturers have their own lending services. This potentially gives customers access to incentives and deals that aren’t available through other financial institutions. Again, second and third opinions will always help your car negotiation process. So it’s better to always walk into the dealership armed with a pre-approval in hand.
TikTokers were critical
Several folks responded to J’s video negatively, stating that he wasn’t looking out for the customer’s best interest. One user thought it was wrong of him to process financing through Santander.
“Sir you must have sold him to the highest bider because there is no way you allowed him to finance with Santander,” they wrote. “They are the devil, speaking from personal experience, you did him dirty.”
Another wrote, “Your bio talking about selling cars the right way, you should be prosecuted.”
Someone else took issue with the interest rate. “14% with $6000 down is crazy Victor Wembanyama,” they said.
“14% is INSANE then he put down $6000 ain’t no way,” another user echoed.
More Santander hate began pouring in as well. “14% is crazy for someone with 650 but also once I heard Santander, I knew it was sum bs,” one wrote.
“Got me at Santander,” another echoed. “You did him dirty.”
Another person chimed in stating that they were able to secure a much better interest rate on a new Toyota.
“I bought a brand new 2022 Corolla hatch manual as a first time buyer in 2021 with $0 down, under MSRP, at a 2.7% APR at 60 months with a 790 credit score,” they claimed “14% with $6000 down is CRAZY.”
The Daily Dot has reached out to Santander and Toyota via email and Jrod via TikTo comment.
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