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“Add-on” auto finance plan gets a “D” for deception

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Buying a car can be expensive. So when you hear there’s a service that can save you on financing, you might be all ears. Well, you’ll also need to be all eyes, because some companies say one thing while the paperwork says something different. Case in point: a biweekly payment plan offered by National Payment Network (NPN) at dealerships such as the Matt Blatt Dealerships in New Jersey.

These companies claimed NPN’s auto add-on plan could help customers pay off their loans faster and save money on interest payments, all with no upfront fees. Okay, so where’s the catch, you say? Right here, says the FTC: Matt Blatt Dealerships and NPN failed to tell customers the total cost of the add-on service or that the cost often outweighed the savings the service provided.

Here’s how the plan worked: People made biweekly payments to NPN, and NPN made monthly payments to the financing company on the person’s behalf. Through this plan, people paid more money toward their car loans more quickly, which eventually saved them money on interest. But according to the FTC, many people paid in more than they saved: NPN took an enrollment fee of $399.00, as well as a processing fee of $2.99 for each payment and a $25 cancellation fee, which many people paid even if they ‘cancelled’ because they had completed NPN’s plan. These fees added up to more than $775 on a standard, five-year car loan. The FTC says these fees more than offset any savings for many people, and many others didn’t end up saving what they were told they would.

As part of the settlement with the FTC, NPN is providing customers with $2,475,000 in refunds, and will be barred from giving people only half the story about savings in the future. Matt Blatt Dealerships will be under a similar order, and will give up the commissions it received for selling NPN’s payment plan.

If you’re interested in financing a car and want to pay off your loan early to save on interest payments, you may be able to do so for free. Check out Financing a car? Ask about pre-payment penalties for more information.

Blog Topics: 
Money & Credit


Them sorry sap suckers

Why can't you make these notices so that I can re-post them on Facebook?

You can copy the URL of the blog post and paste it into a Facebook status update to share it. The URL of this post is

WOW! There is always someone out there to take your money no matter what?

I purchased a car in 2011 from Lipton Toyota, was given paperwork to sign, finance manager told me what they were but not the cost. Made them appear necessary. My $16000 car turned into over $30,000 after a $3500 deposit. GAp, GAP Plus, warranty, extended warranty, tracking device exc. this is after being at the dealership for 6hrs.Went home and reviewed the paperwork, called him attempting to get some of the items remove and he refused, for months I called twice each week.
7 months later I could no longer afford the car and had to return it. This is when the customer service manager advised me that I should have taken the matter further, she removed the add on but I was still not able to keep the car. Three months later I received a bill for $9000, citing it was the difference between what was owed and the sale of the vehicle. If I paid $3500 plus over $420/mth for 7 mths, add on was remove and car sold for over $10000, why do I owe them? Well they removed the add on but not the 6 year interest attached to them and have now sent that amount to collections.

When you are signing all those papers, you are signing legal documents and contracts. You need to be reading them, not blaming some one else because you didn't. Also, you signed a contract agreeing to make payments for and agreed upon term and an agreed upon rate. It is unfortunate that you became unable to pay for your car, but that isn't the finance company's fault. They are running a business.

Bad deals never get better. If it does not seem right simply walk. Getting out of a bad deal is difficult once you sign.

Why not look into the practice of dealers buying a single car to advertise at a lowball price, then refusing to sell the car to consumers and selling them a higher priced car?

lwas ripped off by al piemente foed nizan on 25thand north ave chicago lll.for to $2o.000 for four cinlinder chinee car with 45,000 thousand miles on it and finance me with a td finance l two years at $229.00 a month plus motor insurance at $700.00 and tramsmission insurace at $17oo plus two cars an olsmobileand a cadillac they say that gave me $245.00 for licence plates witch l l had in both cars L asked for for monies but never gave me a penny insted the gage it to a conpany in sacramento , company call td l wrote to them no respond thy kept the monies so l pay the car off with my life savings to avoid more pelnaty and inteest;this dealer been in chicago tv news for discriminating againt hispanyand black charging more a no and sillig cars as is with no warranty or garranty ignorig ll. laws.

Please file a complaint with the FTC and describe what happened. It’s important to submit a complaint because investigators from all over the country use the FTC's database. You can also contact your local consumer protection agency and state Attorney General. Tell them what happened.

I recently purchased a used vehicle and got a loan through the dealer that looked pretty good. Later I was looking through my paper work for the car and noticed a 4 year power train warranty for $1,895 that I didn't remember signing although my signature was on it. I went back to the dealer and they quickly cancelled the warranty and credited my loan. It's sad to think this kind of stuff is still going on. Never trust them.

Your style is really unique in comparison to other people I have read stuff from. Many thanks for posting when you have the opportunity, Guess I'll just bookmark this site.

The topic is great. It is an exceptional writing about financing. It is a great idea about money saving.

My mother purchased a vehicle 4 months ago....the dealership charged her $9000 to finance a $16000 2014 Chrysler 200...for a total of $25000---she is really upset. Is there anything she can do? I feel they took advantage of senior citizen.

You can contact your state Attorney General’s office and explain the contract terms and interest rate. Find out if the contract is legal in your state. You can also file a complaint with the FTC at, and the details will go into a secure database that law enforcement uses for investigations.

The Consumer Financial Protection Bureau takes complaints about problems with car loans. They'll send your complaint to the company and give the company 15 days to respond to you.

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