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#2097274 - 09/07/16 06:16 PM Purchase Money for Auto with add ons...Cash Out???
JC Offline
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Oklahoma
If a person is approved for a $40,000 car and the cost of the vehicle is $35,000 and they decide to buy the extended warranties, add on's like undercoating or TT&L paid from proceeds...are any of those things considered cash out or part of the purchase?

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#2097296 - 09/07/16 07:00 PM Re: Purchase Money for Auto with add ons...Cash Out??? JC
Minion Offline
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Virginia
That's the big question of the day. Our legal has advised us that until the DOD comes out with a better explanation of what they mean those items would be included in the "cash out" and not part of just the purchase of the vehicle. The DOD has already expressed how much they don't believe in offering ancillary products so I think it's safe to say that they are not part of the purchase.

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#2097939 - 09/12/16 02:47 PM Re: Purchase Money for Auto with add ons...Cash Out??? JC
MyOhMyWeComply Offline
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Posts: 114
Texas
I thought the act excluded initial purchase loans?

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#2097945 - 09/12/16 03:01 PM Re: Purchase Money for Auto with add ons...Cash Out??? JC
RR Joker Offline
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Even the TT&L? What about financed bank fees?

These are my two biggest remaining conundrums! laugh!

They don't give a carte blanche exemption, My Oh My. And questions remain. crazy
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#2097950 - 09/12/16 03:05 PM Re: Purchase Money for Auto with add ons...Cash Out??? JC
ComplyGuy Offline
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Joined: May 2015
Posts: 288
And everyone is supposed to be in compliance with this in a couple of weeks. I'm sure training and procedures are happening as we speak.

If TT&L, and bank fees will make the loan covered, then what is the point of the auto purchase exemption? It will make a lot of vehicle purchases now covered. I can see additional products like warranties being considered add on and losing the exemption for them, but bank fees/TT&L make no sense.

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#2097952 - 09/12/16 03:08 PM Re: Purchase Money for Auto with add ons...Cash Out??? JC
RR Joker Offline
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That's how I feel, Compliowa...extra add on stuff, but not 'normal' stuff. I can't make myself believe that was intended.
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#2097954 - 09/12/16 03:10 PM Re: Purchase Money for Auto with add ons...Cash Out??? JC
raitchjay Offline
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OK
I feel like TT&L are less problematic than bank fees.....they'd have to pay TT&L on a comparable cash transaction.
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#2097955 - 09/12/16 03:10 PM Re: Purchase Money for Auto with add ons...Cash Out??? JC
raitchjay Offline
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Bank fees? I mean....you wouldn't have to pay bank fees if you plopped down cash for the auto (not that people often plop down cash for it, but...they could).
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#2098006 - 09/12/16 05:24 PM Re: Purchase Money for Auto with add ons...Cash Out??? JC
RR Joker Offline
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So if they make a sufficient down payment and you finance the fees - no problem. But if for whatever reason you loan 100% and finance fees...problem?

That just makes little sense. And expecting LO's to comprehend that is a whole nother story. cry
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My opinion only. Not legal advice.

Say you'll haunt me - Stone Sour

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#2098021 - 09/12/16 05:47 PM Re: Purchase Money for Auto with add ons...Cash Out??? JC
raitchjay Offline
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Joker...i don't know.....i don't think the regulation or the FAQs properly discussed the question...i'm saying it's problematic and i think we need clarification (that i doubt we get).
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#2098034 - 09/12/16 06:31 PM Re: Purchase Money for Auto with add ons...Cash Out??? JC
RR Joker Offline
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AGree.
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Say you'll haunt me - Stone Sour

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#2098134 - 09/12/16 11:31 PM Re: Purchase Money for Auto with add ons...Cash Out??? JC
Bville Offline
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Out West
Since we need more clarification, but at the same time we need to move forward, I'm taking the stance that we can finance 100% and the fees and still have an exempt purchase money loan. I'm thinking the intent is to cover multi-purpose loans. So the purchase of a vehicle and the refinance of another in the same transaction is a covered transaction, whether or not fees are financed.

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#2098550 - 09/14/16 08:59 PM Re: Purchase Money for Auto with add ons...Cash Out??? JC
raitchjay Offline
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OK
What about credit life premiums financed into the loan......would ya'll look at those the same? It seems a bit of a stretch to me to think of that particular "fee" the same as i would a doc fee or the like. Or would financing the premium mean that you have "exceeded the purchase price"?
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#2098581 - 09/14/16 11:16 PM Re: Purchase Money for Auto with add ons...Cash Out??? raitchjay
Bville Offline
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Bville
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Posts: 1,282
Out West
For now, yes, we will still consider it a purchase money loan if there is credit insurance.

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#2100720 - 09/28/16 01:20 PM Re: Purchase Money for Auto with add ons...Cash Out??? JC
Luv2run Offline
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Joined: Jan 2015
Posts: 608
Am I correct in thinking a refinance of an external car loan into one of our bank car loan products would be a covered transaction? It has been done in the past so I want to cover this in training just in case.
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#2100729 - 09/28/16 01:50 PM Re: Purchase Money for Auto with add ons...Cash Out??? JC
ScoutLaRue Offline
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Joined: Jul 2016
Posts: 73
Luv2run yes to me that would be a covered loan transaction as it's a refi

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