You didn't get ripped off from what I can see. The reason they came back with a higher interest rate on the older cars is because of many factors. Lenders will not approve very low interest rates on older cars unless it is a credit union extending it to a member. The reason is an older car usually is worth less, and so at a lower apr they would make almost no money. Plus, people who buy older cars that don't cost a whole lot, but want to finance are statistically more likely to skip out on payments. They are basically covering their butt due to the added financial risk of financing a cheap older car that has a higher likelihood of breaking down. Let's say that you, the customer, does not make some payments on time and the lender repos the car...they would have a hard time selling it and recouping their losses.
As someone who works for a reputable dealership, I can tell you that what they did was good. As a business, they are there to make money, as anyone who works for a living does. But some places are quite predatory. If it had been the other way around, and you were looking at new cars but they said "oh, we can't finance you on this, but we can get you into a used car" I would get a second opinion. Dealerships make more money on used cars. So it sounds like they were treating you well compared to what the average dealership does.
About the only thing that is not great about this transaction is the APR. while not bad, it could have been better (depending on length...32, 60 or 72 month.) the fact that they magically found you a better APR is BS. While not great, a credit score over 700 is pretty much automatic approval, especially with two grand down. They have books from the banks and credit unions that tell them what percentage to charge for what credit scores (there are exceptions to this, but if everything on the report is clean, this is pretty much true). The thing is, if they can get you to sign at a higher APR than what the bank has said it will offer, the dealership gets a cut of the additional money that you are charged each month. Basically, when they come back with a different APR, they are just lowering their profit a little.
The dealership I work at actually does not practice this. We just go with whatever the apr approved by the lender to the customer. I don't blame them though. To be honest, total profit when everything is said and done (adding flooring fees, taxes, the fact that Honda does not offer kick backs to dealerships or any dealer incentives on civics) there is really only about $700 dollars of real profit on civics if they can manage to sell it at MSRP. That $700 is then split up with the salesman, the manager, the general manager, the lot attendant, the lady at the front desk who answers the phones, and bills like electricity..etc. (as an example, i have never been paid more for selling a civic than $150) so obviously they try to add every additional option they can to make it as profitable as possible.
Finally, on the flip side, the lowest APR offered on civics is 1.9% for 60 months or 0.9 for 32 months. You really are only paying a few bucks more a month than you could have.
TL,DR
No, overall, you did not get ripped off. Good job, but good thing your parents were watching your back, because they would have kept you at an even higher APR without you pushing it one step farther.
.. looks great!
