in the car business and I agree the car business can't be a part-time gig, unless you're like the old dude I worked with - he was 65, had been selling 30 cars a month for years, had been selling at the same dealership for over 40 years (Lander, WY) and only came in for appointments.
He'd have one of his 3rd-4th generation customers call him at home, sometimes he'd call me to check stock, then the next day they'd show up and make a deal in about 10 minutes. He spent 4-10 hours a week in the dealership and made $100K a year. Heck of a great way to sell cars, but he'd earned that status.
Another way to part-time the car business is to dabble in wholesaling or buying/selling from your home. Buy a couple of cars, do neecessary work, the resell. No huge expenditures, minimal risk. It's an idea....
In reference to Mackabee's story of the guy who was given a $2,000 allowance on his trade but the customer "said" he would have taken $200. Well, we know that if he got $2,000, the car must be worth $3 or $4K retail. Generally, there is no fiduciary responsibility between a car sales person and the customer. But, don't you think that it would be extremely sleezy to give a guy $200 for a car that you will sell for $3,500? A dealership is in business to make money, I know that, but to cheat a customer out of that much money is wrong in my humble opinion. That's probably why I wouldn't be good at selling cars.
So, now that we know that car sales guys are only looking out for themselves and making the "most" profit they can regardless of the lack of knowledge of the customer, we as customers must do the same and grind and grind and grind! Who's fault is that?
I guess opinions on this matter depends on which side of the desk you are on.
Mark
2010 Land Rover LR4, 2013 Honda CR-V, 2009 Bentley GTC, 1990 MB 500SL, 2001 MB S500, 2007 Lincoln TC, 1964 RR Silver Cloud III, 1995 MB E320 Cab., 2015 Prevost Liberty Coach
I've often wondered about this question, and was hoping to get an answer from the many knowledgeable participants of this thread.
Some manufacturers offer a lifetime warranty on repair work. When the repair is performed, any part that is broken is replaced with a genuine factory part just like the original one that broke. If the lifetime warranty is offered on the repaired part, why doesn't the original part have a lifetime warranty, if it's the exact same part?
As such, the original part had a 3/36 warranty, but if I pay for a repair, the new part has a lifetime warranty, even though it's exactly the same factory part as the one that broke. Why not just offer the lifetime warranty from the beginning? I know, I know, huge costs for the manufacturer. Just something to consider.
I am fortunate in that I am able to pay cash for my next vehicle purchase. During the initial contact at the dealer do I just lay my cards on the table do you have this car equiped thus and this is what I'm willing to pay for it and if they say yes continue on and if they say lets talk (meaning no) then thank them for there time and walk?
You can go into a dealer, make your offer, have it refused, and leave. It should not take more than 10-15 very enjoyable minutes.
After going to a couple places and not having your offer accepted, it will be pretty clear that you need to increase your offer.
Of course, if your offer is accepted, then you have a nice new car to drive home.
By the way, make sure you make an "out-the-door" offer that includes ALL taxes and fees. That way they can't surprise you with any additional costs, like a surcharge for breathing their air or for wear-and-tear on the concrete in the parking lot. You know, I bet some dealers have tried to charge for that.
anyone would ever pay cash for a car, unless it was a $500 beater.
With all the radical financial incentives out there - all the 0%, 1.9, 2.9, etc, and someone is going to take a large sum of money, that is or could be earning interest, and use it to buy a known depreciating asset?
Even if you're only getting 4% on your money, buying a car using 1.9% financing still MAKES YOU MONEY!!
concept of earning interest on your money while letting someone else lose interest by loaning you theirs, then the F&I people will really enjoy meeting you at sign up time.
In the case of losing a large rebate on an inexpensive vehicle if you choose 0%, then the cash deal makes sense. The same rebate on a more expensive vehicle, then 0% may make more sense.
depends on rate differential. Plenty of people keep a balance on a 19.9% credit card, but have money sitting in a savings account earning 2%. They would be way ahead paying of the CC. Not even much of a concern with keeping money for emergencies, since you can get a cash advance on a CC (not true if you sink all your cash into a car).
So, if the rates on the loan are better than your after-tax earnings, take the loan. If the loan rate is higher, pay the cash.
Used cars don't normally have 1.9% anyway, nor do new cars if you are "creditly challenged".
Zues, to answer your question about paying cash. Honestly, in my case, it was not an issue of interest savings or whatever. I owe nothing, nada, ziltch to anyone, on anything and it will always be that way if I have anything to do about it. That's just me.
Just my .02... Mark
2010 Land Rover LR4, 2013 Honda CR-V, 2009 Bentley GTC, 1990 MB 500SL, 2001 MB S500, 2007 Lincoln TC, 1964 RR Silver Cloud III, 1995 MB E320 Cab., 2015 Prevost Liberty Coach
Mark, I think the point got lost on you. And I don't mean that disrespectful. The point is there are two negotiations involved when buying a car and there's a trade involved. The negotiation didn't end when the price of the truck was agreed to. The trade was a 99 Plymouth Neon with 66k miles on it and the passenger side of the car had been wrecked on the rear quarter panel and the back door. I doubt it would retail for 3 or 4k. And as I stated I would not "cheat" anyone out of their money. I stated I would have offered $1000.00 for the trade expecting the customer to ask for more as the majority of internet customers seem to do as they are "well informed" on invoice for new trucks and cars. What really matters here is that the customer was happy with the price on the new truck and what he got for his trade. : ) Mackabee
I owe nothing on my cars, but there's a difference between owing nothing on a $3-4K car and a $30,000 car. $3K won't do a whole bunch for you as far as earning interest, but $30,000 sure will!
I paid cash for my '98 Forester. The key is what would you do with the money otherwise?
Well, the hot tip at the time was Ciena stock. Had I invested the $19,200 in that, I would have approximately 12 cents today, and $19,200 of debt (more with interest). So it was, without question, the best decision I made in my life so far, probably the best financial decision I'll ever make.
I guess you could pay off your mortgage quicker, but that money is even less liquid, and you're losing one of your few tax deductions.
CD rates are lousy, savings pays nothing right now. Plus, there is the temptation to spend it on something. Like Ciena stock.
I hope I'm misunderstanding you. How is paying down ones mortage a 'less liquid' option than sinking cash into a car?
Home equity loans are pretty darned straighforward to get liquidity out of one's home.
In fact, unless you are shopping for 0/0 type vehicle (ala Mitsubishi) the real cost of borrowing using a home equity loan is about the cheapest option.
The break even point on a regular old car loan (which have not been deductible for years) and home equity loan would have to be around 2.9% from the factory/dealer for most folks. Anything higher and you do better with home equity rates...
Of course there is a bit of psychology too, as the term on home equity loans tends to be quite a bit longer and you'd have to excercise self-restraint to pay the thing off in 36-48 months...
Be careful for those who get hit with the Alternative Minimmum Tax (AMT)[That is a lesson for another day] on their 1040.
That interest on the home equity loan used to buy the car may not obtain a tax benefit at all due to the way the AMT is calculated. Home equity interest not incurred to improve the home is one of the disallowance items for purposes of AMT.
Sorry to bore you with the technical jargon...but beware.
Is a smart thing to do if it makes you feel more secure. Some of us have 2 paid for cars as well as homes, and I know that I sleep better at night because of this. I also owe nothing to anyone and pay as I go or I don't buy the item. I work with to many people who are up to their eyeballs in debt and then file for bankruptcy! Kind of unfair to the rest of us who live within our means. My house is an average one and my cars are compact ones. Sure I'd like a bigger house and a new car, but i use restaint and get what I need, not what I want! My last car deal in 2000 was an internet deal, very easy and very quick. The salesman wanted us to finance, but when we told him we were paying cash, he dropped it and it made the rest of the experience more enjoyable. (Isn't that an oxymoron like jumbo shrimp? A pleasant car purchase?) Sorry if I rambled here. Happy Holidays to all who frequent Edmunds as much as I do!
On the thread of working at a dealership. What do the mechanics there get paid anyway. I see $65 labor rate s here in the NE. Does the actual mechanic see half that?
I've been thinking the way to get into business for yourself (that I'd like) would be to become a mechainic. Work at a dealership for a year or 2 and then open your own shop. What are the requirements (education wise) to get a mechanic job there?
I managed (service) got $26 per flat rate hour. Some days he'd do 5 hours, some he'd do 15. He averaged 55-60 a week with very low combacks (less than 2%). He was great. The GM, through poor management and no people skills, ran him and a few others off - he's now making the same money in Goldsboro, NC.
If you make an offer and the dealer accepts it right away, you are paying too much. Like bobst said, it would be better to make a low offer and get a few rejections. That way you know what dealers will not accept and you can raise your offer a little bit.
I disagree....if the ealer gives you a price that you know is good, then why not accept it. In my last car, I took the dealers price....18,588 for a Camry LE with Auto, Keyless entry. I knew it was in the holdback.
I was a transaction that was initiated from the internet, though, facilitayted by someone that regularly posts here on edmunds (cliffy).
Are the ones who get right down to business. They've done their research. They also have a grasp of the market and realize we are a business that has to make a profit.
They will tell me..." I don't want to make this an ordeal..I'll give you XXX for the car..I would like 5000.00 for my trade otherwise I'll sell it myself"
The deal makes sense and is accepted. Maybe his trade needs 500.00 in recon and we offer 4500.00 instead..DONE!
Then the customer leaves happy and is off to spend time with his family. He sends in a perfect survey on me. Over the years, we see each other when he is in for service and we chat. Maybe he sends me his neighbor who needs a car.
rerenov8r: I'm refinancing my mortgage right now, and the process is taking months. And I'm only borrowing about half the value of the house, and taking no cash out.
Maybe a home equity loan is quicker, I dunno. Like I said, I could sell a car in a weekend if I had to.
Like bobst, I definitely like to keep it simple. The fewer banks I have to deal with, the better. I had a bad experience with Ford Credit, so I decided that was my last.
You don't tend to spend as much vs leasing or financing, or not more than you have, by default.
I do think that each individual should evaluate their personal situation and decide, of course, and the info on this topic is very useful.
isell: I've tried that, but too often dealers will tack on surprise fees, at least the ones I've been to. Then they want to spit the difference as a "favor", no thanks. So now I started using a no-haggle dealer that doesn't have any surprises up his sleeve.
In my first couple of months at Fremont Motors (Lander WY) I upped a guy who was looking at conversion vans. He was a Kirby vacuum cleaner salesman, had horrible credit and the van was going to be sold to his girlfriend, who was a "credit makeover" (I didn't know what that was at the time). My boss was leary of the deal, but this one Ford Mark III conversion had been sitting for almost a year. High top, all the goodies, $50,000 pricetag.
They jumped all over the deal with an $860 pmt for 84 months, they wanted the rebate ($2K) in a check, not in the deal, and after treating me and the F&I guy like trash, he finally bought the van. Highest commission I ever made, but boy did I pay for it!
Hey, I didn't agree to the numbers, I just delievered the van!!
About 6 months later, after putting on 56,000 (yes, thousand) miles while selling vacuum cleaners, he brought the van back. He wanted to sue us because it didn't come with a hitch (he never mentioned towing a trailer) and he rented one of those clamp-on hitches from U-Haul, which trashed his rear bumper. He wanted the bumper replaced. He told me he had only changed the oil 3 times (these new engines are great, huh?) and blew the engine - replaced it under warranty, against better judgement, but again, he threatened to sue us.
About 2 months later, he blew into town again, this time with 67,000 miles and wanted to TRADE the van. Payoff was $52,000 (they had already missed 2 payments, gotten their insurance cancelled and Ford put on forced insurance), ACV with all the dings, dent and other damage was $18,000. He lost his danged mind.
2 days later, he set fire to my very nice 1992 GMC Yukon - totalled it. He was arrested and convicted. On the bright side, he didn't burn down my house......
In the past six months, I have opened a home equity line of credit and refinanced my lone.
The line of credit took about 6 weeks to open. The refi took 3 months!
The problem was I opened the LOC, then got a call from my first mort. lender loan officer telling me about the current rates. When he said 5.75 for 30 yr fixed, I said lock. Unfortunately, some new items on my credit did not show up: a new car loan, and the LOC. I told them about and was told they would not be a problem.
So, 2 weeks before closing, I ask about the subordination paperwork....not started...Title company makes a mistake and tries to subordinate my car loan...oy vey! Closing is delayed 1 week...Now, I am told by the title processor that I do not need to check the status every few days, that if there are issues, they will contact me...so far so good. Two days before closing (round II), I call up, and find out that the processor left, and did not do any work on her files. Closing is delayed. I further find out they did not request the subordination agreement. They requested it on Dec 5 (loan was applied in Sept)., got the paperwork last fri, closed the loan yesterday.
With all due respect to traveler, it did not sound like he was too informed or he would not have asked the question he did. I would think that it is exceedingly rare that you make an offer to a dealer and it is exactly at their rock bottom selling price right off the bat and they immediately agree to the price. All I was saying was that if the offer were accepted right away that it probably was not the lowest price he could get.
OTOH, if you just want to make an offer and be done with it, go for it. It will probably not be the lowest possible price, but saves time and hassle.
$18,588? Everyone knows you can get a Camry LE for $16,700. (wink, wink) Just read the other threads in Smart Shopper. LOL.
rerenov8r, I agree with you. A HELOC car purchase is the way to go for me. Took less than a week to get it, and I have in my possession the title to my car. Plus I can tap the line in the future, at prime (even if I'm unemployed).
And very few middle-income people will have any AMT considerations.
I really like the idea of have title to the vehicle I drive too. I am comfortable with tapping into the equity I have in my home, and don't really have too many tax concerns. It is, of course, a really bad idea to recklessly use any kind of credit, and folks should carefully determine how a HELOC will impact their overall finances. For me, it was the best option.
I am kinda surprised by all the folks who have had long delays. I think from start to finish mine was about 15 business days.
I suspect there are a few factors that work against some folks.
From my friends in both the appraisal and mortgage/lending business, they tell me there are definitely some good companies and bad.
The quickest turn around USUALLY happens with lenders that do smallish numbers of HELOC. If they are not running these things through huge "mills" there is less chance of yours ending up with a processor who is just slow/on vacation/jumping to another job. The processor literally is assembling the file that establishes the legal basis for the loan and your ability to pay it off. If you have non-payroll income you HAVE to provide 1040's to document your income. Similary the lender will want valid information about all your debts/obligations so that you don't exceed their customary limits. The information is pretty standard, but lack of even a single document/signature could be an impediment to an underwriter approving the package in a timely manner.
If the appraisal is done electronically this helps speed things considerably. For new homes/areas with very accurate sales data, lenders are very comfortable without a detailed physical appraisal. No waiting for an appraiser to find time to drive out and poke through your cellar.
As to the AMT, if you are in earning more than $45,000 or so, and considerable portions are NOT from W2 type salary sources, you really OUGHT to consider the tax implication of EVERYTHING financial...
home equity can be a great idea if you are somebody who will stick to a plan and pay off the car with a consistant short payment plan....but more times than not people get lazy or forgetful and the car portion of the home equity loan turns into a 10+ year payment plan. Costing the consumer thousands more than a conventional auto loan.
"but more times than not people get lazy or forgetful and the car portion of the home equity loan turns into a 10+ year payment plan. Costing the consumer thousands more than a conventional auto loan."
"more times than not" Really? Sounds like the party line.
Not really - sounds like human nature to me. I've known several people who used home equity loans to finance cars and all but one were lazy enough that when they wanted to turn over the car after 5-6 years they still owed on the heloc.
That's annecdotal for sure, and a small sample volume as well, but my sense is that it mirrors the norm. No proof so I could be wrong.
I haven't used a home equity line to buy a car, but other than the title and tax advantages (on $20-30K?), what's the difference in getting a 0% 5 year (or 3-4 yr) loan or having the self-discipline to make the extra payment to pay the loan down like you would with a 0% 60 month loan?
To me, having the title (when you REALLY don't, since you still have a lein against the car in some form), is not an advantage.
I would think the majority of folks would fall into the same current refinance frenzy trap - get some money, pay all your credit cards off and buy a car, pay a higher house payment, then run your cards back up again! That, I've seen. Most people don't have the self-discipline to follow through, in my opinion.
"To me, having the title (when you REALLY don't, since you still have a lein against the car in some form), is not an advantage."
If you use a HELOC there is no lein on your car. It's on your house. I don't understand what you mean by this.
The advantages of using a HELOC are much less, if they exist at all, once car loan interest rates drop below 3%, because that's around the effective after-tax rate currently of HELOCs.
And there is one *huge* disadvantage to using a HELOC - it's a variable-rate loan. In two or three years you might be paying 6 or 8% on your HELOC, instead of having that nice fixed 3% car loan rate.
It wasn't that long ago that new-car loan rates were several points higher than HELOCs, which made them very attractive. When rates swing back HELOCs will become a more attractive option again.
**** but more times than not people get lazy or forgetful and the car portion of the home equity loan turns into a 10+ year payment plan. Costing the consumer thousands more than a conventional auto loan."
I do have a tendency to agree with this .. I have known quite a few buyers when asked of their pay-off, they will say "oh, it's just a home equity loan", then I will ask "why is it you owe $11,000 on a $7,500 vehicle" -- and their comment is: "well, we were going to pay it off but ......"
The whole reasoning behind 6/12/18 months "Same as cash" is that 70% of the buyers at Best Buys, Furniture is us, tires are you, etc, etc, is that even though the rate might be $21%+, they don't mind that payment of $50 bucks a month - thats why they do it and thats why they advertise it, and thats why it's Very profitable for the retailers too use it ..
to me, there is absolutely no difference if the car loan amount is a lein against the title or in your home equity loan - you still have to pay it off, and why not use 0% or the other 2-3% stuff?
There is still a lein, and the worst thing you can do is enter another car loan by trading the car while you still owe money on the car as part of your home loan.
Is tht I hink it is stupid to use the hoem equity for anything other than improving the house. If you use it to buy a car, and something happens (lose your job...) youc an lose the house; otherwise you only lose the car.
I refinanced to a lower interest rate back in 1999, a move that involved switching companies. I think it took about 2 months total, between when I first started the paperwork to settlement.
At the beginning of 2001, I took out a second mortgage through my credit union. I can't remember how long it took, but all I had to do was make a phone call or two, and then go in to pick up my check. Scary how easy it was to get that money and put myself into debt!
The real fun came though, when I tried to refinance that 2nd mortgage to a HELOC. They had no trouble at all with the 2nd mortgage, which I think was at 11.5%! The HELOC was only 4% though, and they made it as difficult as possible to get it. My theory is that they gave me the 2nd mortage with no trouble because they'd make a good amount of money off of me, but when it came to refinance, it wouldn't be nearly so profitable, so they made it as difficult as possible. I think it took me about 2 months to refinance to the HELOC. Now that I have it though, I can go pull out money (up to my limit) whenever I want, just like taking it out of the bank.
I'm now in the process of trying to refinance my first mortgage to a 15-year, and it's taken at least two months so far. And the irony of it all is that they have the nerve to call it a "Streamline"! Sure, whatever...
"If you use it to buy a car, and something happens (lose your job...) you can lose the house; otherwise you only lose the car."
Well, I owe 19K on my heloc (3.95% APR). I used it to buy a new Z28 this year. Right now my income is down, and could get worse. Fortunately, if things get really tough, I can make interest-only payments (about $63/ month) instead of having to make a normal full monthly payment on a regular car loan. The way I see it, this makes it easier to keep both car and home. Even on unemployment (God forbid) I could find that much money.
A HELOC is a good thing to have, for any occasion. And you can't get one when you really need one, like the old joke about getting a loan: you have to prove you don't really need it before you can get it. It allows for flexibility. Like with any credit, it has to be used smartly.
I also agree with wayside and zues: when the dealer finance rate drops to the neighborhood of 0%, take it.
Comments
He'd have one of his 3rd-4th generation customers call him at home, sometimes he'd call me to check stock, then the next day they'd show up and make a deal in about 10 minutes. He spent 4-10 hours a week in the dealership and made $100K a year. Heck of a great way to sell cars, but he'd earned that status.
Another way to part-time the car business is to dabble in wholesaling or buying/selling from your home. Buy a couple of cars, do neecessary work, the resell. No huge expenditures, minimal risk. It's an idea....
So, now that we know that car sales guys are only looking out for themselves and making the "most" profit they can regardless of the lack of knowledge of the customer, we as customers must do the same and grind and grind and grind! Who's fault is that?
I guess opinions on this matter depends on which side of the desk you are on.
Mark
Some manufacturers offer a lifetime warranty on repair work. When the repair is performed, any part that is broken is replaced with a genuine factory part just like the original one that broke. If the lifetime warranty is offered on the repaired part, why doesn't the original part have a lifetime warranty, if it's the exact same part?
As such, the original part had a 3/36 warranty, but if I pay for a repair, the new part has a lifetime warranty, even though it's exactly the same factory part as the one that broke. Why not just offer the lifetime warranty from the beginning? I know, I know, huge costs for the manufacturer. Just something to consider.
After going to a couple places and not having your offer accepted, it will be pretty clear that you need to increase your offer.
Of course, if your offer is accepted, then you have a nice new car to drive home.
By the way, make sure you make an "out-the-door" offer that includes ALL taxes and fees. That way they can't surprise you with any additional costs, like a surcharge for breathing their air or for wear-and-tear on the concrete in the parking lot. You know, I bet some dealers have tried to charge for that.
With all the radical financial incentives out there - all the 0%, 1.9, 2.9, etc, and someone is going to take a large sum of money, that is or could be earning interest, and use it to buy a known depreciating asset?
Even if you're only getting 4% on your money, buying a car using 1.9% financing still MAKES YOU MONEY!!
But, I also don't think that your thinking and/or reasoning on this matter has to match mine. To each their own.
And I investigate dealer fraud issues, especially involving financial transactions - I see abuses all the time.
The cash question has nothing to do with the car business - it relates to anything consumable.
Ed
So, if the rates on the loan are better than your after-tax earnings, take the loan. If the loan rate is higher, pay the cash.
Used cars don't normally have 1.9% anyway, nor do new cars if you are "creditly challenged".
2020 Acura RDX tech SH-AWD, 2023 Maverick hybrid Lariat luxury package.
Just my .02... Mark
: )
Mackabee
Well, the hot tip at the time was Ciena stock. Had I invested the $19,200 in that, I would have approximately 12 cents today, and $19,200 of debt (more with interest). So it was, without question, the best decision I made in my life so far, probably the best financial decision I'll ever make.
I guess you could pay off your mortgage quicker, but that money is even less liquid, and you're losing one of your few tax deductions.
CD rates are lousy, savings pays nothing right now. Plus, there is the temptation to spend it on something. Like Ciena stock.
-juice
I hope I'm misunderstanding you. How is paying down ones mortage a 'less liquid' option than sinking cash into a car?
Home equity loans are pretty darned straighforward to get liquidity out of one's home.
In fact, unless you are shopping for 0/0 type vehicle (ala Mitsubishi) the real cost of borrowing using a home equity loan is about the cheapest option.
The break even point on a regular old car loan (which have not been deductible for years) and home equity loan would have to be around 2.9% from the factory/dealer for most folks. Anything higher and you do better with home equity rates...
Of course there is a bit of psychology too, as the term on home equity loans tends to be quite a bit longer and you'd have to excercise self-restraint to pay the thing off in 36-48 months...
When we buy a car, it is simpler to just pay for it and be done with it.
That interest on the home equity loan used to buy the car may not obtain a tax benefit at all due to the way the AMT is calculated. Home equity interest not incurred to improve the home is one of the disallowance items for purposes of AMT.
Sorry to bore you with the technical jargon...but beware.
My last car deal in 2000 was an internet deal, very easy and very quick. The salesman wanted us to finance, but when we told him we were paying cash, he dropped it and it made the rest of the experience more enjoyable. (Isn't that an oxymoron like jumbo shrimp? A pleasant car purchase?)
Sorry if I rambled here. Happy Holidays to all who frequent Edmunds as much as I do!
The Sandman :-)
I've been thinking the way to get into business for yourself (that I'd like) would be to become a mechainic. Work at a dealership for a year or 2 and then open your own shop. What are the requirements (education wise) to get a mechanic job there?
TIA,
om
Our labor rate was $65.
I was a transaction that was initiated from the internet, though, facilitayted by someone that regularly posts here on edmunds (cliffy).
They will tell me..." I don't want to make this an ordeal..I'll give you XXX for the car..I would like 5000.00 for my trade otherwise I'll sell it myself"
The deal makes sense and is accepted. Maybe his trade needs 500.00 in recon and we offer 4500.00 instead..DONE!
Then the customer leaves happy and is off to spend time with his family. He sends in a perfect survey on me. Over the years, we see each other when he is in for service and we chat. Maybe he sends me his neighbor who needs a car.
Then there are the ones I hope I never see again.
Maybe a home equity loan is quicker, I dunno. Like I said, I could sell a car in a weekend if I had to.
Like bobst, I definitely like to keep it simple. The fewer banks I have to deal with, the better. I had a bad experience with Ford Credit, so I decided that was my last.
You don't tend to spend as much vs leasing or financing, or not more than you have, by default.
I do think that each individual should evaluate their personal situation and decide, of course, and the info on this topic is very useful.
isell: I've tried that, but too often dealers will tack on surprise fees, at least the ones I've been to. Then they want to spit the difference as a "favor", no thanks. So now I started using a no-haggle dealer that doesn't have any surprises up his sleeve.
-juice
In my first couple of months at Fremont Motors (Lander WY) I upped a guy who was looking at conversion vans. He was a Kirby vacuum cleaner salesman, had horrible credit and the van was going to be sold to his girlfriend, who was a "credit makeover" (I didn't know what that was at the time). My boss was leary of the deal, but this one Ford Mark III conversion had been sitting for almost a year. High top, all the goodies, $50,000 pricetag.
They jumped all over the deal with an $860 pmt for 84 months, they wanted the rebate ($2K) in a check, not in the deal, and after treating me and the F&I guy like trash, he finally bought the van. Highest commission I ever made, but boy did I pay for it!
Hey, I didn't agree to the numbers, I just delievered the van!!
About 6 months later, after putting on 56,000 (yes, thousand) miles while selling vacuum cleaners, he brought the van back. He wanted to sue us because it didn't come with a hitch (he never mentioned towing a trailer) and he rented one of those clamp-on hitches from U-Haul, which trashed his rear bumper. He wanted the bumper replaced. He told me he had only changed the oil 3 times (these new engines are great, huh?) and blew the engine - replaced it under warranty, against better judgement, but again, he threatened to sue us.
About 2 months later, he blew into town again, this time with 67,000 miles and wanted to TRADE the van. Payoff was $52,000 (they had already missed 2 payments, gotten their insurance cancelled and Ford put on forced insurance), ACV with all the dings, dent and other damage was $18,000. He lost his danged mind.
2 days later, he set fire to my very nice 1992 GMC Yukon - totalled it. He was arrested and convicted. On the bright side, he didn't burn down my house......
The line of credit took about 6 weeks to open. The refi took 3 months!
The problem was I opened the LOC, then got a call from my first mort. lender loan officer telling me about the current rates. When he said 5.75 for 30 yr fixed, I said lock. Unfortunately, some new items on my credit did not show up: a new car loan, and the LOC. I told them about and was told they would not be a problem.
So, 2 weeks before closing, I ask about the subordination paperwork....not started...Title company makes a mistake and tries to subordinate my car loan...oy vey! Closing is delayed 1 week...Now, I am told by the title processor that I do not need to check the status every few days, that if there are issues, they will contact me...so far so good. Two days before closing (round II), I call up, and find out that the processor left, and did not do any work on her files. Closing is delayed. I further find out they did not request the subordination agreement. They requested it on Dec 5 (loan was applied in Sept)., got the paperwork last fri, closed the loan yesterday.
Except, there were three errors on the HUD1 form.
Point is home equity can take a while to get to.
I'll have to read up on the Inconsiderate threads.
Wow, manamal. I'm in touch with my mortgage lender every couple of days to make sure everything is going well.
isell: is yours a no-haggle store? Prolly not. What prices are you offering nowadays for the Pilot and Odyssey. Just curious. Any wait?
-juice
LOL...
Ed
http://www.sky.com/skynews/article/0,,30100-12197254,00.html
Pretty wild.
-juice
Call 1-800-WET-CARS.
Could they do that with OnStar? If so, would we call it OnStarfish?
-juice
OTOH, if you just want to make an offer and be done with it, go for it. It will probably not be the lowest possible price, but saves time and hassle.
$18,588? Everyone knows you can get a Camry LE for $16,700. (wink, wink) Just read the other threads in Smart Shopper. LOL.
And very few middle-income people will have any AMT considerations.
I am kinda surprised by all the folks who have had long delays. I think from start to finish mine was about 15 business days.
I suspect there are a few factors that work against some folks.
From my friends in both the appraisal and mortgage/lending business, they tell me there are definitely some good companies and bad.
The quickest turn around USUALLY happens with lenders that do smallish numbers of HELOC. If they are not running these things through huge "mills" there is less chance of yours ending up with a processor who is just slow/on vacation/jumping to another job. The processor literally is assembling the file that establishes the legal basis for the loan and your ability to pay it off. If you have non-payroll income you HAVE to provide 1040's to document your income. Similary the lender will want valid information about all your debts/obligations so that you don't exceed their customary limits. The information is pretty standard, but lack of even a single document/signature could be an impediment to an underwriter approving the package in a timely manner.
If the appraisal is done electronically this helps speed things considerably. For new homes/areas with very accurate sales data, lenders are very comfortable without a detailed physical appraisal. No waiting for an appraiser to find time to drive out and poke through your cellar.
As to the AMT, if you are in earning more than $45,000 or so, and considerable portions are NOT from W2 type salary sources, you really OUGHT to consider the tax implication of EVERYTHING financial...
"more times than not" Really?
Sounds like the party line.
That's annecdotal for sure, and a small sample volume as well, but my sense is that it mirrors the norm. No proof so I could be wrong.
To me, having the title (when you REALLY don't, since you still have a lein against the car in some form), is not an advantage.
I would think the majority of folks would fall into the same current refinance frenzy trap - get some money, pay all your credit cards off and buy a car, pay a higher house payment, then run your cards back up again! That, I've seen. Most people don't have the self-discipline to follow through, in my opinion.
If you use a HELOC there is no lein on your car. It's on your house. I don't understand what you mean by this.
The advantages of using a HELOC are much less, if they exist at all, once car loan interest rates drop below 3%, because that's around the effective after-tax rate currently of HELOCs.
And there is one *huge* disadvantage to using a HELOC - it's a variable-rate loan. In two or three years you might be paying 6 or 8% on your HELOC, instead of having that nice fixed 3% car loan rate.
It wasn't that long ago that new-car loan rates were several points higher than HELOCs, which made them very attractive. When rates swing back HELOCs will become a more attractive option again.
I do have a tendency to agree with this .. I have known quite a few buyers when asked of their pay-off, they will say "oh, it's just a home equity loan", then I will ask "why is it you owe $11,000 on a $7,500 vehicle" -- and their comment is: "well, we were going to pay it off but ......"
The whole reasoning behind 6/12/18 months "Same as cash" is that 70% of the buyers at Best Buys, Furniture is us, tires are you, etc, etc, is that even though the rate might be $21%+, they don't mind that payment of $50 bucks a month - thats why they do it and thats why they advertise it, and thats why it's Very profitable for the retailers too use it ..
Terry.
There is still a lein, and the worst thing you can do is enter another car loan by trading the car while you still owe money on the car as part of your home loan.
At the beginning of 2001, I took out a second mortgage through my credit union. I can't remember how long it took, but all I had to do was make a phone call or two, and then go in to pick up my check. Scary how easy it was to get that money and put myself into debt!
The real fun came though, when I tried to refinance that 2nd mortgage to a HELOC. They had no trouble at all with the 2nd mortgage, which I think was at 11.5%! The HELOC was only 4% though, and they made it as difficult as possible to get it. My theory is that they gave me the 2nd mortage with no trouble because they'd make a good amount of money off of me, but when it came to refinance, it wouldn't be nearly so profitable, so they made it as difficult as possible. I think it took me about 2 months to refinance to the HELOC. Now that I have it though, I can go pull out money (up to my limit) whenever I want, just like taking it out of the bank.
I'm now in the process of trying to refinance my first mortgage to a 15-year, and it's taken at least two months so far. And the irony of it all is that they have the nerve to call it a "Streamline"! Sure, whatever...
Well, I owe 19K on my heloc (3.95% APR). I used it to buy a new Z28 this year. Right now my income is down, and could get worse. Fortunately, if things get really tough, I can make interest-only payments (about $63/ month) instead of having to make a normal full monthly payment on a regular car loan. The way I see it, this makes it easier to keep both car and home. Even on unemployment (God forbid) I could find that much money.
A HELOC is a good thing to have, for any occasion. And you can't get one when you really need one, like the old joke about getting a loan: you have to prove you don't really need it before you can get it.
It allows for flexibility. Like with any credit, it has to be used smartly.
I also agree with wayside and zues: when the dealer finance rate drops to the neighborhood of 0%, take it.