Questions About Financing New Vehicles
This continues topic #21 in the Smart Shoppers
Conference where we talk about financing your new
car. To read the earlier part of this discussion
click here, then return to this topic to post your
comments and questions.
Nancie
Conference where we talk about financing your new
car. To read the earlier part of this discussion
click here, then return to this topic to post your
comments and questions.
Nancie
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Here is a sample lease. Right now you can lease a 1998 Honda Civic DX Coupe for $149 per month and a $1,500 down for 36 months. When you take possession of the car you will probably be required to pay the first month's payment ($149), the down payment ($1,500), a security deposit ($150), and an acquisition fee ($495). Please note that under the terms of this lease you are only allowed to drive the car 12,000 miles per year. You will be charged for any mileage over that amount that's on the car when you return it.
Thanks,
TF
I would appreciate any wisdom!
I would like to mention that after purchasing my 1998 Toyota Sienna XLE the other day, I applied for financing at the http://www.peoplefirst.com web site. Got 7.25% for 5 years. When you fill out the application (about 5 minutes), they will call you in about 15 minutes to notify you of their answer. You can get a draft check overnight as well. Great staff I talked to and the service was perfect. I got a call to make sure the check got to me overnight and they asked me to call them with any questions. Great financing service!!
Scott
PeopleFirst states you must have excellent credit, own your own home and they will have an answer for you within minutes. Well, they are located in California and I'm on the opposite side of country. I had to wait until they opened to get an answer! :-) But they had one within minutes of opening!!
You can check out their web page at http://www.peoplefirst.com. I'm not affiliated with the company in any way except that's how I'm financing my VW Cabrio.
Scott
What I learned is this. In addition to their published loan rates, banks also provide lower preferred rates in some circumstances. These rates are not generally available to the public, but through a combination of volume (dealer referral in my case) and excellent credit on the part of the lender, an individual can sometimes get the preferred rates. The 6.99% I got was through NationsBank, whose published rate was somewhere in the 8.25% to 8.75% range.
My advice is to always let the dealer try and beat the rates you can get on your own. But DO be very careful that any dealer financing which beats what you can already get has the same conditions (i.e. fixed/variable rate, same length, penalty clauses, down payment, etc.)
It amazes me how many people will go to such extremes to get the best car price, then they just settle for the what ever interest rate the dealership offers. Don't sign the purchase agreement, until you've seen the financial officer and have agreed on the interest rate. If they say, that's the "best they can do" and you don't believe them, get out of your chair and head for the door. More often than not, they'll try to find a way to lower it. The dealer will be eager to match or beat your lowest rate so you'll take possession of the car right then.
You can negotiate the deal after which they will probably ask you to fill out a buyers order describing the vehicle you negotiated on and the price, including trade-in and such. DO NOT SIGN it and just tell them you will complete the form when the financing has been agreed upon. The buyers order says it is a legal contract somewhere on it, so if you sign it, all they have to do is provide financing to you. The buyers order has your SSN and enough info for them to decide what sort of interest rate they will offer you. I always shop around so they know what they have to beat, then if they can't beat it, they'll give you a Promissory Note and you have 5 days to get a check to them. Just did this about a month ago.
Scott
Wanted to thank you for the info on the Edmund's site re: car buying.
I have never purchased a new car before and so I have been painstakingly
researching everything. I did get outside financing thru CarFinance.com and
would just as soon stick with them if the Factory rebate for Toyota goes into
effect again. There is a dealer incentive on now though. I am also putting
down almost 50%.
I understand that I should NOT sign the buyer's agreement until either my
financing or the dealer's financing goes thru. In the case of CarFinance.com
that means faxing documents to them and providing proof of income to
complete the qualification process. I assume I can do this before actually
committing to the vehicle by signing the buyer's agreement. Then if financing
goes thru,(I assume that happens right away?), I sign and drive. If it takes
longer, then I do not sign, and I do not drive, until it does?
I was confused about the prommissory note you mentioned. What is that and
is it given only after a buyer's agreement is signed in the case of someone
wanting to shop around for a loan after they have committed to a purchase
agreement?
Suzanne,Scared -but -making- progress
Sooooo, it is a good idea to get your pre-qualification stuff out of the way before you go shopping. Then you already know that you are approved for X% interest rate and for X dollars for Xyears.
I signed the buyers order before I spoke to the finance officer because I knew I had financing already arranged. It was just a matter of whether the dealer could beat it. Does this help you any more??
Don't be scared about buying a car. The dealer will sense your fear and try to take advantage of you. Take along someone who knows how this all works or just do your homework and gain control of the transaction. Just remember, you have the money they want. Don't give it to them easily. If I can help any more, let me know!
Scott
i had leased a nissan over 3 years while i was
in college. i was late on 10 payments. i have 3 credit cards, and a total credit card debt of 4k. all are reported as "R1" on my credit report. i had two bills that were
placed in collections, but they have been paid.
i am 23 years old, and just graduated college.
i have been on the job six months, working full time. my yearly salary right now is around 33k.
i went with a friend of mine to a second chance
place, and i while he was filling out the application, i told the salesman of my situation, and he says that i wouldn't be able to get a
(approximately) 20k loan, even with 10-15% down, and that i'll have to
pay the high rates of a second chance dealership.
is he right? or do i have a fairly decent chance of getting a loan somewhere?
loan from a bank, should i try and get one through my credit union before going to the dealership. i have only banked there since i moved to minneapolis (about 5 months ago). i was warned that too many credit inquiries at the same time negatively affects your chances of getting a loan.
is there anything else i can do to help my situation?
honda accord, or buying a 94-95 lexus es 300 used.
would i be better off getting approved on one over the other?
The folks are PeopleFirst are very responsive and friendly - definitely a good loan experience.
I ditto everthing right to the letter!!
They'll definitely get my recommendation to relatives and friends, as well as a shot at any future car purchases.
Scott
apartments and buy a new car -:). The question is that: When is the best time to get financing?
1) before taking a new job -
It means (+) I would have lower income, however
(- )they would figure out I'd had a job for a while.
2) after getting a new job -
(+) higher income
(-) not enough time on the job
I'm puzzled.
Art
I am also leasing a second car (Corolla), which I intend to return at lease end in Aug98. I have the usual credit cards etc and my credit is excellent.
When I asked the dealership about leasing the tracker, they told me that GMAC would not approve a lease unless I turned in my other car now. Obviously I did not want to do that because we wanted two cars, but the finance manager told me I could not have two cars on a lease because I was maxed out according to GMAC.
They actually got us the finance through Ford Motor Credit who must have less strict criteria.
My concern now is that I want to lease another GM car after I return the Corolla, but I expect to run into the same problems and have finance it with a conventional loan (possibly at a higher rate).
I have been reducing my monthly outgoings by paying off my credit cards and cancelling anything that I don't really need, so come Aug/Sep my loan to income ratio will be better.
I also expect a pay raise and a bonus in Aug which should help too.
My question is how much IS TOO MUCH?
Is there an average formula that finance companies work from, or even better does anyone have a contact at GMAC that could tell me what their criteria is.
Many thanks.
I'm in Texas and looking to purchase a 98 Exepedition. There is a dealer in Oklahoma that will order one from the factory for me for $99 below invoice. I either have to pick it up from them myself or they will drop ship it to a Texas dealer for $500.
It appears to be a legitimate deal. I have seen numerous posts on several internet sites saying that people have actually done this and that is worked very well.
The issue is the lease financing. They say that they normally only do purchase loans for out-of-state customers. Not leasing.
So, I need to find my own lease financing.
Any recommendations?