My fiance bought a 2005 Chevy Impala for 10,070, with a car payment of 202.09 for 48 months that would equal 9700.32, a difference of 369.68. He has good credit, so the interest rate would not be high, and we thought 10,070 was a good price. In June we made the first payment, and we were on our way, or so we thought.
Around September we started looking really closely at the car statements (Citifinancial does not have a book; they send a statement in the mail monthly), and we noticed that every month they take a certain amount of the payment and apply it to the principal and the rest toward the interest. So we called to ask them about this, and we got someone who can barely speak English and who told us that it changes every month, so okay, we continued to pay.
Christmas came around and we were late on the payment. They hounded us for an 8.98 late fee. They wanted us to pay it over the phone, which would cost $14.95, and that was not happening, so in January we sent enough to cover the car payment and the last fee. My fiance got a money order for more than he was supposed to, and they took the remainder and applied it to the principal. In February we made a payment and noticed that the balance of the car was not coming down at all. On Feb 17 we got a statement in the mail. It says that we owe a car payment of 202.09 (nothing new there) and the entire balance is 9177.05.
Now how can this be? Let's retrace: car payment 202.09, we have made 9 payments for a total of 1818.81. Subtract that from 10,070 and you have a balance of 8251.19, or so I thought. We called Citifinancial again and still could not get anyone who speaks good English. They told us that they do not decide how much goes toward the principal and how much goes toward the interest, that it is decided by someone somewhere, and that it goes by the date the car payment is made. My concern was where the other $900 was going. No matter how much goes toward principal and how much goes toward interest, the total amount for the car (including interest) was $10,070.00, so any payment sent should be subtracted from that price. But they gave me a story about the interest and the principal, so I asked what if I wanted to pay it off early. She then told me that there is a penalty to pay it off early, but I save on the interest rate now. How is that possible?
I have been trying to talk to someone regarding this, and I keep getting the runaround. I am going to look to get my car refinanced through someone else because times are too hard for this.
These people should be ashamed of themselves for trying to get over on people as bad as the economy is, but they will not be getting over on us. We are going to find out where the other money has gone, and either they are going to apply it to my account to lower my balance or give me a refund, or they will wish they had. I do not have a problem with going to the attorney general about this.
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