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Questions About Financing New Vehicles

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Comments

  • bobotheclownbobotheclown Member Posts: 53
    You should go into your local credit union and sit down with a loan specialist/manager and see what kind of terms they can offer you. Just make sure you qualify for membership in the credit union first.

    If you know that you will definately finance through the credit union, then complete the loan process. Most of the time the credit union will issue you a convenience check to purchase the car.

    If you want to see if the dealership can beat the terms, then just take the information you researched with you to the dealership and see what happens.
  • art_vandelayart_vandelay Member Posts: 45
    I've financed my last 3 cars thru my credit union. I just call and get my preapproval, go pick out my car, the dealership calls my loan officer, and the dealer drafts the credit union electronically for the sale amount.

    If you want to see if the dealer can match or beat the credit union's interest rate, then yes, you should know the interest rate they've approved you for. The dealership should not need to see anything in writing unless you're trying to get them down to a particular figure and they're close but not budging... even then they don't really need to see anything in writing from your credit union but may ask to, just to be difficult.
  • stickguystickguy Member Posts: 53,330
    Maybe this is a dumb question, but will a CU give a loan to anybody, or just members? I don't have a CU through work or anywhere else that I know of. How many people actually have access to one?

    You can also just as easily walk into your local bank and apply for a loan. From the signs in the lobby, their rates are competitive, and probably not all that much different than a CU these days. In any case, low is low, and lately, rates is low.

    I personally found it to be a major hassle the one time I got a loan from the bank directly, instead of through the dealer. Back and forth with papers, etc. Much easier to do it at the dealer (convenience).

    Also, in theory, the dealer should be able to get the best rate around (whether it makes it to the buyer depends on if they mark it up), since they usually have a number of banks and captive sources they deal with. That's how they usually manage to beat whatever pre-approved rate you bring in, even if they don't always offer the lowest they can do up front.

    2020 Acura RDX tech SH-AWD, 2023 Maverick hybrid Lariat luxury package.

  • audia8qaudia8q Member Posts: 3,138
    FYI...

    Assuming the consumers credit is up to par.
    dealership can almost always match or beat any outside bank or credit union rate. Many don't shop around finance rates or ask the dealer to match the rate.
  • art_vandelayart_vandelay Member Posts: 45
    Credit unions only make loans to their members. Do an internet search for credit unions in your area. If you live in a major metropolitan area, there is probably one you are eligible to join. I qualify for mine through my job, but there are a few others in my area who only require that you live or work within the county or an adjacent county. Pretty broad membership eligibility. Also, if you work in a particular industry, check for credit unions nationally that cater to that industry... it might not be in your town or state, but you can still become a member online if you are eligible.

    In my case, no paperwork back and forth at all between dealer & credit union. One phone call and an electronic draft. Pretty painless for all concerned.

    As far as dealers/manufacturers almost always beating credit union and/or bank rates for customers with credit up to par, I have not found this to be the case unless you're talking about 0% manufacturer financing. Short of that, my credit union consistently beats the manufacturers' standard rates by a country mile. If you qualify for manufacturers' 0% financing and opt to go that route rather than taking cash back, more power to you. If you're financing at anything 3.9% or above, if the dealer can beat it by a decent margin, good for you! If they can't beat it by enough to make a real difference, or even if they match it, I still prefer to stick with my credit union for the personalized service and I also prefer for them to make money off me rather than Ford, Chevy, Honda or whomever.
  • mfullmermfullmer Member Posts: 773
    Art is correct. These days you should never have to into any financer and sit down with a loan officer. My last two purchases were done online with my credit union. The only thing I got was a phone call saying I'd been approved and for what rate. In one instance the dealer couldn't beat the rate I got through the credit union, in the other he could.
  • mfullmermfullmer Member Posts: 773
    I think audia was referring to outside lenders as well. Sometimes dealerships have negotiated special rates with lenders. My last deal they were able to get a rate 19 basis points lower than my CU through Bank of America. BofAs posted rates that day were well over 150 basis points higher than what I got.
  • art_vandelayart_vandelay Member Posts: 45
    Point taken. And good for you that the dealer got you a BofA rate 1.5% less than the BofA posted rate if that's who you wanted to finance through, and that's certainly enough of a difference to notice. But for less than 1/4% below the CU rate, I still would have stuck with my CU. Just my personal preference that my CU get my business for no more difference than <.25%, since when my CU makes money, I make money. :)
  • nw1582nw1582 Member Posts: 3
    I was just rejected for an auto loan from an on line lender that I have used in the past. After getting the e-mail, I did a bit of searching, and think I may have figured out why.

     I have a 2001 Dodge Ram financed with my wife as a co-lender. I Also have a 2002 Ram with me being the sole lender. When I applied, I indicated that I would be trading in the 2001. Which would show me as having 2 loans in my name only and no co-lender.

     Now the sticky part, My Fico hovers around 625, and I was applied through a subprime loan company. The loan I applied for would actually have been less than the current payment on the 2001 Ram, but by failing to include a co-buyer, I think I might have gotten myself rejected.

     Does this seem reasonable, while I await the formal rejection letter via USPS?

    Thanks for the expertise
    Chris
  • bowke28bowke28 Member Posts: 2,185
    easy calculation for applying for car credit:

    1 butt, 1 seat.
  • anonymouspostsanonymousposts Member Posts: 3,802
    Don't tell that to American Honda. They gave my husband 3 seats for his one butt.
  • bowke28bowke28 Member Posts: 2,185
    if its a co-made deal, it counts only as 1/2 a seat. ;-)

    also, if you are super-strong, credit-wise (730+), many make exceptions. i was referring to the 625 score, mostly.
  • anonymouspostsanonymousposts Member Posts: 3,802
    Okay, they gave him 2 1/2 seats for his one butt. I am on the Odyssey but his Civic and our Accord are both in his name only because I was not with him when he bought them.

    I know what you are saying though. Most secondary lenders require that any open auto loans be traded or PIF before they will fund the new loan.
  • audia8qaudia8q Member Posts: 3,138
    ArtV says..."....my credit union consistently beats the manufacturers' standard rates by a country mile.."

    all but the smallest of dealers use bank sources other than the manufacturers standard finance sources...This is where almost any dealer can get the consumer a better rate than what a consumer can get on their own. But, if the consumer isnt somewhat proactive they may not realize this. The reason dealers get better rates is due to the volume of loan business they generate. If a dealer sends joe blow bank $5 million or more in loans per year they will pass along "buy rates" to the dealer that will be better than one consumer buying one car. With top tier credit we can get non-subvented rates as low as 3.04% for up to 66 months. I don't know of any bank or credit union in my area that is anywhere near that rate with an instant approval....

    It is always best to be aware of whats available from all sources...This way the consumer can make the decision that works for them.
  • art_vandelayart_vandelay Member Posts: 45
    Thanks for the education, audi!
  • mfullmermfullmer Member Posts: 773
    Yes and you always must have something for them to aspire to. When I ordered my Solara I filled out a credit app so they could check and see what rate they could get me. I already had the 3.75% from my CU but I didn't tell them that. They came back (with my 765 credit score) with a "Great Rate" of 4.85%, which I turned down of course. I then went to look over the car with the salesman while the F&I guy was getting the info into the system. When I came back, lo and behold he had found a 3.54%.
  • asafonovasafonov Member Posts: 401
    In our case, the Honda dealer could not beat the CU rate - they asked what it was (3.9% in 02/2003), and said "we cannot do any better, you should go with your CU" without even checking our credit.

    I understand the argument about dealer F&I getting great rates from banks because of the large business volume. Using the same reasoning, I used to swear by one mortgage broker - until I found a mortgage bank a couple of years ago that no broker could beat. They do not resell their mortgages, either.
  • art_vandelayart_vandelay Member Posts: 45
    "In our case, the Honda dealer could not beat the CU rate - they asked what it was (3.9% in 02/2003), and said "we cannot do any better, you should go with your CU" without even checking our credit."

    That's exactly the way my deal went too.
  • babababa Member Posts: 1
    I am kinda of new to this car buying game as well but here is my question?

    I am trying to buy a new 04 maxima and I am thinking about trading in my 98 camry.. the dealer is talking about paying off the camry but will add the loan back on the maxima.

    are they supposed to do that? i thought once they (dealer) pay off the camry,it shouldn't be added on my new loan... can someone please explain?? thanks
  • stev713stev713 Member Posts: 1
    I just came back from a GM dealer. GM is offering $4500 in rebates and additional 1500 if you finance via GMAC. The dealer came back with an interest rate of 7.25 by CU is giving me 6.05.

    The dealer suggests going with the GMAC for 3 months so I qualify for the 1500 bringing the total rebate up to 6000 and after the 3 months refinance with the Credit Union.

    Are there advantages/disadvantages to this????
  • mfullmermfullmer Member Posts: 773
    What he means is that you have negative equity (owe more on the Camry than what it is worth) that they will roll onto the new loan. This is never a good idea unless you must get rid of the current car. I'm interested to know how a 6 year old car can have that much of a balance on the loan so that it is more than the value.

    Also, you need to find out what they are offering for your car. Have you booked it out on any website? What is your payoff, as quoted by the bank? I would suggest you post ALL of the specific numbers, including the specific car and options and your purchase price here BEFORE going any further. You need direction, but you've come to the right place!
  • mfullmermfullmer Member Posts: 773
    First, that seems like a very high rate but anyway, that doesn't make that much sense unless you find out what the rate is for a used car from the Credit Union. The rate for a used car can be several points higher than a new car rate.
  • bradg49bradg49 Member Posts: 3
    stev713... I just went through that same situation. I took the gmac financing in order to get the extra $1500 on a new silverado. I got %7.75 from the dealer. I then refinanced with my bank with a lower rate before I made the first payment to gmac. When the dealer tells you that you have to keep the loan for 3 months, they are mistaken. Also, the only drawback to this is once I financed with gmac, the refi had to be for a used vehicle. The rate was still almost 3 points lower! Check the rates for a used loan. You will save by taking the $1500 and then refinancing.
  • bowke28bowke28 Member Posts: 2,185
    as a dealer, i can tell you that we are told to tell people 90 days, whether its for ford, gm, dodge, or whatever.

    if a single dealer has all of its financing contracts paid in full before a single payment is made, the finance company will come down hard on the dealer.
  • bradg49bradg49 Member Posts: 3
    I just had something to add. I was told to keep the contract for 3 months by one dealer, and the dealer I eventually purchased from said there was no minimum contract length. I also called GMAC and was told that I had to keep the contract for six months, but when I questioned that the lady put me on hold. When she came back, she told me that her supervisor said that there wasn't any minimum contract length. I am not disputing that you guys are told to say that, but why not put that in writing to make sure that the person makes at least 3 payments before refinancing?
  • bowke28bowke28 Member Posts: 2,185
    because, in truth, there is no requirement. putting in writing that there is would be fraud.

    it is told to people to make sure that "most" dont pay it off in a week.
  • grandtotalgrandtotal Member Posts: 1,207
    because, in truth, there is no requirement. putting in writing that there is would be fraud.

    it is told to people to make sure that "most" dont pay it off in a week.


    So, it's not fraud if you tell it to people, only if you write it down?
  • bowke28bowke28 Member Posts: 2,185
    according to the law, yes.
  • spikemikespikemike Member Posts: 2
    I have horrible credit and I'm looking for a car loan. My score from Equifax was 563, but since then I've paid off over $2000 in loans leaving me with just my student loan in payments. I realize I've screwed up in the past but I have $1,500 to put down on a $10,500 loan and I have a good job (Air Force). Where do I go to get a loan? I don't want to apply to a lot of places and lower my credit score and I don't want to get screwed on a 22% loan. Are there any bad credit lenders that offer reasonable rates, not as much as they feel they can charge?
  • bowke28bowke28 Member Posts: 2,185
    if you are active military, and stationed stateside, then go to your post's credit union. i was stationed at ft. knox, and used ft. knox FCU numerous times.

    they will not be very lenient on the loan amount, so you may have to come up with a little bit extra cash...but your terms, if approved, will be alot more attractive.
  • spikemikespikemike Member Posts: 2
    I asked USAA to take a look at it but they wouldn't touch it with a 10-ft pole. Will my CU really pick up that kind of loan?
  • danf1danf1 Member Posts: 897
    You will have a much better chance at getting approved through your credit union than most lenders. Credit unions can be very lenient for a number of reasons, one of which being that they will typically take your payment directly from your paycheck so they do not have to worry about you paying them.
  • bowke28bowke28 Member Posts: 2,185
    exactly...if you set up an allotment, then they get their money whether you want to pay them or not.
  • geok991geok991 Member Posts: 5
    The main reason for being told to wait to re-finance is the F&I manager will have the commision he received for the financing deducted
    from his pay check.

    He can't earn a bonus if what he sold is refunded.

    Geo K
  • eddie7eddie7 Member Posts: 2
    I have to buy a car soon and I've been reading the forums. I also pulled up my credit report and I found out my credit isn't as good as I hoped. I currently have a FICO score of 582 Yikes!! I make about 30k/yr and would like to put down $3-4k on a used car. I don't have any outstanding debts, or any mortgage/rent. Will I be able to get financing?
  • stickguystickguy Member Posts: 53,330
    If you can put down 4K on a modestly priced car, you won't have a problem. That would be 40% on a 10K car. Most people with iffy credit (and even lots of folks with good ratings)show up with $50 cash and a trade in with negative equity in it.

    If you are conservative with what you buy, and make all the payments on time, it will also help your score go up.

    2020 Acura RDX tech SH-AWD, 2023 Maverick hybrid Lariat luxury package.

  • malo_4malo_4 Member Posts: 15
    Has anybody financed through the Sam's Club program?
  • mark1967mark1967 Member Posts: 4
    I have two BK's on my credit report. The dealorship that Im working with states in order to find financing "they" must pay a finance company to finance me. Is this correct information or are they playing on my two BK's?
    I have $3500 down for a 19K car.
  • rroyce10rroyce10 Member Posts: 9,332
    ...... Did I read this right .. two BK's.?

                
                 Not knowing all the details .. the dealer will probably have to give a "kicker" to the lender to carry this paper ... your also on too much vehicle.

                               Terry.
  • anonymouspostsanonymousposts Member Posts: 3,802
    I know some secondary finance companies will charge the dealer a fee if the buyers credit is bad enough. I've heard of one finance company charging the dealer as much as $900 with a minimum interest rate of 24% and the only form of down payment allowed is cash or certified funds. So if you do have two recent BK's then they are probably on the up and up.
  • mark1967mark1967 Member Posts: 4
    24% interest? Dont states place a cap on interest rates! Thanks for the help, I will ask what kind of interest rate Im looking at. I knew I would be in the high teens but 20's.. Ouch.
  • anonymouspostsanonymousposts Member Posts: 3,802
    The cap in GA is 28%. It could be 25% but I do not believe it's higher than 28%. I tried to search on google but I don't have the attention span to look for what isn't readily available tonight.
  • jqzugajqzuga Member Posts: 2
    My annual income is $33k w/ OT and $1000/mth bonus....credit bureau is 520..I have a $600 credit card maxed and a tax lien for $3,300...I have just paid off the credit card and tax lien..
    Im looking to buy a 2003-2004 Infiinti G35 $30,000...I can afford the payments its a matter of if i can get financed w/ the credit just paid

    A. How long till it shows up on my credit as paid...

    B.How much will my credit score go up

    C. How long should i wait till I look for this vehicle...Would it be better to wait till beginning of year...Or go now and bring proof these are paid...If you have opinions or suggestions you can email me at jqzuga@yahoo.com
  • rroyce10rroyce10 Member Posts: 9,332
    A. How long till it shows up on my credit as paid...

              Never wait until it just "shows up" ... credit bureau's (all three) are very slow, and you might be seeing your first grey hairs or your very first social security check before that info hits the deck, there is no guarantee it will ever "show up" unless you take the initiative to have your credit checked, I look at credit everyday and I see things from 1989/92/96 - don't ever wait for them .l.o.l.....

    B. Can't say, it depends on why you received the tax lein, type, how long you had it and what type of credit card, but you need every piece of proof that you have - and I have a feeling your very young and there is some other issues you haven't explained, yet .. but if I were to guess, somewhere between 45 and 60 days depending on when they received the info and how hard you stood on them.

    C. Refer back to A.

                                Terry.
  • gilbert91gilbert91 Member Posts: 2
    (soory if this is a cross post - Having a difficult time navigating the forums for posting).

    I think/know I got ripped off by my dealer the other day, but using my fuzzy math skills, I am unable to ascertain by how much. I am hoping someone with some math skills can help. Here is the scenario......

    I have
    car # 1 that is worth $5000 (trade in value/what they gave me).
    Car #1 Pay Off Value is $9000

    I purchases car #2
    Purchase Price is $25000
    I give them $4000 down payment
    and my trade in

    I return Car #2 due to very poor gas mileage!!!
    They give me $24000 for car#2

    I buy Car #3 for 15000
    I givem them $1800 more down

    So, what is my total payment for the car (not including finance), if anyone knows???
    It seems like a simple question, but I am not thinking right, or am I ?

    If I paid $4000 + $1800 +$15000, I am paying $20800. According to my math.....Thanks.
  • KCRamKCRam Member Posts: 3,516
    Reminder to jqzuga and everyone else...

    These discussions are searchable on the internet via Google and others. PLEASE don't put your email address in your posts - you are just asking to get spam from a bot looking for these things. Email addresses are safe in the profiles; these are NOT visible to the general internet.

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  • gilbert91gilbert91 Member Posts: 2
    I think/know I got ripped off by my dealer the other day, but using my fuzzy math skills, I am unable to ascertain by how much. I am hoping someone with some math skills can help. Here is the scenario......

    I have
    car # 1 that is worth $5000 (trade in value/what they gave me).
    Car #1 Pay Off Value is $9000

    I purchases car #2
    Purchase Price is $25000
    I give them $4000 down payment
    and my trade in

    I return Car #2 due to very poor gas mileage!!!
    They give me $24000 for car#2

    I buy Car #3 for 15000
    I givem them $1800 more down

    So, what is my total payment for the car (not including finance), if anyone knows???
    It seems like a simple question, but I am not thinking right, or am I ?

    If I paid $4000 + $1800 +$15000, I am paying $20800. According to my math.....Thanks.
  • bobotheclownbobotheclown Member Posts: 53
    Let see if I can get this right.
    Your first car is worth $5,000. However, it looks like your upside down $4,000. So the car is worth -$4,000.

    You buy a car that's $25,000. Trade in your first car that is -$4,000 and put down an additional $4,000. Since most dealers tack on the -$4,000 onto the selling price of the new car, your $4,000 down was negated. Therefore you're financing $25,000.

    You trade in car 2 for $24,000. Since you owe $25,000 and only get $24,000 back, your -$1,000 at this point and have no car.

    Then you buy another car for $15,000. Assuming this is from the same dealership, your actually paying -$16,000 (-$1,000 from car 2). You once again put a deposit on the car, $1,800.

    In the end, your financing $14,200+fees and are out $5,800 in cash.

    Wow, I hope you love this 3rd car.
  • qbrozenqbrozen Member Posts: 33,736
    kinda tough to figure out without more details. Like what your tax rate is and how much in fees, registration, etc. you had to pay each time.

    For instance, if you bought that $25K car here in jersey, you'd be looking at $1800 in taxes .... oh, but you had the $5K trade-in, so that would be $20k trade difference and $1200 in taxes. Then you have registration and fees. So let's say you are up to $21,600, then you gotta add that $9k debt. $30,600. Then you put $4k down. $26,600. Then you trade in for $24k. So you carry $2600 negative to the next car. AH, but you bought a cheaper car .... therefore that should have been tax free, no? Then you put $1800 down. So methinks maybe around $16K give or take a couple hundred is the final balance of the whole deal?? Am I warm? Do I get a cookie?

    '11 GMC Sierra 1500; '98 Alfa 156 2.0TS; '08 Maser QP; '67 Coronet R/T; '13 Fiat 500c; '20 S90 T6; '22 MB Sprinter 2500 4x4 diesel; '97 Suzuki R Wagon; '96 Opel Astra; '11 Mini Cooper S

  • stacy2stacy2 Member Posts: 3
    Hi, just got discharged from a ch. 7 and was able to get a loan thru a dealer when the loan didn't exceed 90% of the car's value. The interest rate was 10%. I was very surprised that we got such a rate with the BK, but took it because we surrendered the car the new one replaced. Now we have another car that was included in BK. Still paying on it because we want to keep it, but now its out of warranty and also the payments don't even get reported because its technically a closed account. Apparently I'm better off having the lender pick it up if I want to get another car rather than trading it in since we're about 1K negative on it. (we didnt reaffirm the debt). I am approved for another car loan, but the rate is higher currently. But getting the new car would mean warranty and lower payments, because it's a smaller loan than the original. So, do we keep the one we have and pay on it for 2 years, or get another car and have a 5 year loan that would go on our credit score. Which is better? Please help!
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