‘If they do it to you, they’re doing to others’: Man catches car dealership secretly raising interest rate, adding warranty without his consent to make cost higher

A user on TikTok has sparked discussion after sharing a trick allegedly used by some car dealerships—a trick that the TikToker says is illegal.

In a video with over 262,000 views, TikTok user Lyndan (@lyndan99), who says he is a former worker in the car industry, claims that his friend had negotiated a price on a car with a dealership. However, when he got the paperwork from the dealership, he noticed that they had added on a warranty that he did not need.

“So he called the finance manager and said, ‘Hey, take this warranty out, I don't want it.’ The finance manager said, ‘No problem,’ [and] sent him a new contract back,” Lyndan recalls.

But when Lyndan’s friend got the new contract, he noticed that something was amiss. Rather than just get rid of the warranty, the dealership had decided to increase his interest rate by half a percentage point. The friend promptly called Lyndan.

“He called me and asked me if that was OK. I said, ‘That's absolutely illegal. Call him back and have him lower that interest rate,’” Lyndan says.

The friend did call the dealership back—only to be met with a surprise.

After hearing his request to return the interest rate to its original rate, “the finance manager says, ‘You know what? Then I don't want to sell you the car,’” states Lyndan.

“They can refuse, but you can't refuse business because you did something illegal,” Lyndan continues. “So my friend told him, ‘OK, that's fine. I have the original paperwork and I have the paperwork where you raised the interest rate. I will see you in court.’”

“Guess what? My buddy got his brand new truck,” Lyndan concludes.

In the caption, Lyndan writes, “This is ILLEGAL (at least in California). They can not under any circumstance raise your interest rate because you refuse to buy extras, including insurances. If this happens do your best to get a copy of the orginal offer and the new offer with a higher interest rate and report them!”

It’s unclear to which law Lyndan is referring. In online discussions about similar issues, some referenced the idea of “tied selling” which, per Investopedia, is “the illegal practice of a company providing a product or service on the condition that a customer purchases some other product or service.”

In a comment, Lyndan also mentioned the FTC’s CARS Rule, though it is uncertain which part of the rule applies to this specific situation. 

@lyndan99

This is ILLEGAL (at least in California). They can not under any circumstance raise your interest rate because you refuse to buy extras, including insurances. If this happens do your best to get a copy of the orginal offer and the new offer with a higher interest rate and report them! My friend had both copies and was ready to take legal action but they straighten up quick when they realized he knew his rights! If you feel like something isnt rignt, speak up????️

♬ original sound - Lyndan C. ????That Car Guy

In the comments section of Lyndan’s video, users shared their thoughts on the car-buying experience.

“Dealerships need to go away. No need for the middle man anymore,” wrote a user.

“Had a dealer try to tell me the aftermarket warranty was ‘necessary for purchase’ and said ‘we can’t lower your payment due to you being out of state,’” alleged another.

“This is why the last time I went in was with a pre-approval with a rate I was sure they wouldn’t beat,” declared a third. “In and out in an hour.”

The Daily Dot reached out to Lyndan via email.

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The post ‘If they do it to you, they’re doing to others’: Man catches car dealership secretly raising interest rate, adding warranty without his consent to make cost higher appeared first on The Daily Dot.