Mercedes-Benz driver still owes Carmax’s sale price after 4 years of car payments
“Please tell me this is a joke.” The Atlanta-based car dealer shakes his head at the details. An Amazon driver scheduled a call with the industry insider, who often tries to help people get out of bad car loans. “It’s not, man,” the caller responds. He’s stuck in a high-interest car loan on a Mercedes-Benz, and he hasn’t moved the balance down from the original sale price…after four years of monthly payments.
Driver buys a Mercedes-Benz from Carmax just out of high school
The concept isn’t anything Yusef Benallal, the car dealer and vehicle loan consultant, hasn’t heard a million times before. Folks want to be seen driving a certain badge and will do almost anything to keep up appearances…including signing up for a high-interest car loan.
The caller explains that when he graduated high school, he wasn’t too “smart” about vehicle finance. When he saw the car for sale at Carmax, “I pretty much just blindly signed,” he says.
Unfortunately, that blind signature set him up with a 26% interest rate.
The Mercedes-Benz owner pays $668 a month for the car. After four years of payments, that’s about $32,000. By now, the vehicle has 170,000 miles on it. And he’s not even close to paying it off.
Even though he’s ponied up more than $30K, he still owes another $25K
The kicker is that the original sale price was $25,000. Something isn’t adding up here.
It’s possible the driver rolled in negative equity from a previous car loan, leaving him with much more than the Mercedes purchase price to pay back.
One commenter agrees with this theory: “As a sales consultant for Carmax I can vouch people sign these deals everyday. Typically rolling over insane neg equity into the loan on top of 25-30% Apr.”
Still, the caller wants to know if Benallal can help him get out from under the Mercedes-Benz loan. The dealer asks for the driver’s credit score and how much cash he has to put down on a different, more affordable vehicle. The caller says his score is only 580, and he doesn’t have any money for a downpayment right now.
The car dealer advises the Mercedes-Benz owner to continue using the car to get to and from work, climb the Amazon career ladder, build his credit up, and come back to him when he’s truly financially ready to move on. In the meantime, it sounds like the car might get repossessed by the loan company.
Benallal captioned his video of the call with “If you’re young and watching this. Please think again before buying a luxury car with a high interest rate. Buy within your means!”
