New car financing

pjindal25

Hi Guys,
Since I didn't find a specific thread on financing here asking my question in a new thread. I am planning to buy a new accord in next two days( trying to get a good deal due to quarter close).
Need some tips on financing options.
Which are few banks who offer good rates? Honda financing rates? Pre approval vs. at the dealership? I have notices honda is running a .99% financing on new 2014 models. Is it accurate? How much credit score do I need to be eligible for it? Any other tips that I need to keep in mind when I go to the dealership in next two days?

Thanks a ton for all the information that I already found on this forum

stever

If you apply for a pre-approval locally (or online), that will give you a good idea of what your credit score is.

Then invite the dealer to beat your financing rate - often they can (and the .9% will be hard to beat if you do qualify for it). Generally 740 and higher is the "excellent" credit range that gets you the best interest rate, but it varies from bank to bank.

We have some Auto Finance articles that you may want to skim.

You'll have to ask the dealer about how to qualify for the Honda rate - that incentive requires you to use Honda Financial Services.

pjindal25

thanks @stever I skimmed the articles. Few questions - which service is better for an online quote - Should I use my own credit union or the honda credit online? If I pre approve using the honda credit online, do you know if I have a chance of getting the .99% financing or is that available through dealers only?
I have an excellent/very good credit.

stever

I don't have any personal experience with the online quote services. You could check the reviews I guess (Yelp maybe?). Quicken seems to get mixed reviews, but more for home loans. Credit unions usually offer good rates so that would be a good place to get a quote to use for comparison. I bet they won't be able to match the .9% that Honda is currently offering.

I don't know why you can't apply online with Honda Financial to see if you can get the special rate and then take that info to the dealer (or have them pull it up somehow).

Credit is getting looser so my guess is that you'll qualify based on your "very good" or better credit (my guess is that anything over 700 will get you there, and maybe even a lesser credit score). Please report back and let us know if you find out what tier Honda is requiring for that special rate.

pjindal25

@stever thanks for the prompt reply! I don't wanna run a credit with the credit union first only to drop my score and then lose a .99% option at honda. So my target is to first negotiate a .99% rate and then go and get the report pulled.

stever

Good point - I've had two hard pulls this month (buying a house) and one of my scores dropped ~40 points. Since that Honda rate will be hard to beat it makes sense to go there first. I dunno, seems simpler just to let the dealer do it. They have the most motivation to get you qualified so they can get you into the Accord.

pjindal25

@stever‌ exactly mine situation and thoughts. Also do you have any information on honda maintenance packages? Is there a nationwide maintenance package I can buy online? I have the info on extended warranty and i know i can buy it with in 6 months but not sure on the maint packages.

stever

All I know about Honda Care Maintenance is what I (occasionally) see in posts and at Honda. I don't think it's worth it to prepay for scheduled maintenance. You may sell the car early (although the plan is transferable, you're not likely get any extra money on the sales price for having it).

The other gotcha you have to watch for with any prepaid service plan is that some dealers or service writers will try to upsell you on stuff that's not needed and perhaps of dubious value - like fuel injection cleaning. Most service writers work on commission and there can be a lot of pressure to sell you stuff that's not on Honda's suggested schedule.

Not sure but last I heard, you could buy Honda Care online from a few dealers.

pjindal25

thanks for the tips. I am not looking for an extended service plan but servicing during even the initial couple of years. I am buying first new car, so my understanding of new car is that you get free servicing upto a certain years. Is that included in the original honda warranty for 3 years? @brian125 do you know any of this as well?

stever

I don't think Honda has ever offered this perk for "free".

Free Car Maintenance Programs

That leads you back to their Vehicle Service Contracts (also known as Honda Care, but it's different from the Honda Care extended warranty). And since you intend to take advantage of the cheap financing, Sentinel oil change coverage is available - that info is at the same link.

The problem with an aftermarket one is coordinating with the dealer. There may be coverage issues (exclusions) and you may have to submit bills for reimbursement.

qbrozen

40 point drop for checking your credit? Are you sure it wasn't just a different agency? (they do vary)
Seems excessive to me. I've never experienced any kind of credit drop while shopping rates in the past.
In any case, pjindal, once the dealer pulls it, they have to disclose that score to you, so you'll know where you stand. As stever said, 740 has been the target score in my experience.

stever

The one I mostly track is Equifax and one hard pull was to initiate a mortgage loan and one hard pull was for a condo rental. There should be a third pull somewhere for switching the mortgage app to a local bank but I think they use Transunion and I don't have easy access to that score.

The main thing hurting my scores is that I keep turning down offers to bump up the line of credit on my two cards. I never run a balance and I have plenty of credit on the cards to at least hire the criminal defense lawyer, so I never bump it up.

qbrozen

my score always seems to be going up and I have no idea why. Not trying to brag, its just that it leaves me wondering if there really is a rhyme or reason to it.

stever

@pjindal25's scores will probably go up with a few hard pulls.