Questions About Financing New Vehicles

zuckerbr · April 2009

I can live with the daily rate, because I intend to pay it off within a week. I checked the payment schedule, and the interest charge for the first month is about $150, so we're talking pocket change.

My main issue is my deep suspicion about why they would cut the price by $1000 and allow me to pay it off immediately. I can read the fine print all day, but I'll still worry that I overlooked something.

lrguy44 · April 2009

Ask the dealership why the finance price is lower. if all the LI dealers are quoting that way, my guess is dealer cash - is it thru Chrysler Credit?

joel0622 · April 2009

It is legit, they are not offering you a lower price exactly, they are offering you an additional reabte to finance with Chrysler, and yes it happens every day that people finance them and pay them off after a month or two. Nothing crooked, nothing under handed. Just a dealer working the system that the motor company presented them with.

romicva · May 2009

What other then up2drive reputable online financing institutions are out there? Anyone with exprience... Thank you. :confuse:

Kirstie_H · May 2009

A reporter is looking to hear from current car-shoppers by 5pm Pacific on May 18, 2009. Please send to jfallon@edmunds.com your daytime contact info and a few sentences about the impressions of the marketplace in relation to the dramatic news surrounding the auto industry.
Thanks,
Jeannine Fallon
Corporate Communications

Edmunds.com

joel0622 · May 2009

Capital One

greensuv · May 2009

We now have an Affordability Calculator which helps you figure out the price range of the cars you can shop for based on your desired monthly payment: http://www.edmunds.com/apps/calc/CalculatorController?pmtcalAction=affordability-

tornadog · August 2009

I had applied for an auto loan through Penfed for their 3.99% APR, and was denied the loan. So I purchased the car with the dealership offered rate which was significantly higher. After doing some research, I found that Penfed allowed reconsideration of loan applications. On reconsideration, my loan was approved and they sent me a check in mail made out to the dealership and me. Now how do I void the dealership contract and make Penfed the lienholder on my title. Who possesses my title at this point? Its been Nine(9) days since I signed the contract and bought the vehicle. Penfed requires me to send them the title and signed promissory note within 30 days. Is that enough time to get the title transferred to them?

volvomax · August 2009

If the dealer sent the contract to their lender it may be too late. they would have sent the title/MSO in with that lenders information.
Check and see if the dealer still has your contract.

mjadhav · August 2009

I am thinking of using a manufacturer incentive to buy a new car. That will knock off a few grand from the price of the vehicle, but I can't take advantage of the manufacturer's low rate financing if I take that option.
What's the best place to get auto financing from? I have heard about PenFed - anybody used them? What was the experience?

lrguy44 · August 2009

Check rates at your local banks and credit unions. The dealer still may be able to furnish a lower rate because he works with banks that may give him a lower rate than you can get However, find out your credit score and do not let anyone pull your credit until you have researched all rates. .

tornadog · August 2009

You are right. They had already sent it to CapOne and so now I will have to wait to get my account information. I will have to deal directly with them now, I guess. I just hope to have everything done and sent within the 30 day window they have given me.

corvette · August 2009

Call PenFed and talk to them. They will probably reissue the check to CapOne.

yuppers213 · August 2009

I applied online for a car loan through Associated Credit Union of Georgia. Someone contact me the next day and approved me for $20,000 (what I had asked for) at 3.9% for 48 months. I needed proof right away so they faxed me an approval letter that day. Completely painless and a fantastic rate. I would definitely recommend them.

bhi · September 2009

my wife and I recently purchased a car, I didn't stress too much over the interest rate tho, for a 20k 48 month loan the difference between 3.99% and 5% is around 9$ a month. Use one of the online payment calculators before you head to the dealer and see if the different interest rates make that big of a difference in monthly payment. I used the one at agcalc.com it lets you try a bunch of different rates, terms, etc. real easy to use.

joel0622 · September 2009

Hey, nice spam

qbrozen · September 2009

I actually think that's a cool looking tool.

However, it doesn't reflect what the poster stated. The difference of 1% interest on a $20k/48-mo note shows up as $18/mo on that tool.

tidester · September 2009

Of course, our members already know about and use the Auto loan calculator at Edmunds.

tidester, host
SUVs and Smart Shopper

joel0622 · September 2009

It is a cool little tool but my point being is that if I say. "I sell Ford Service Contracts, contact me through my email in my profile" My post will be deleted and I will get a email from one of our gracious host pointing out the error in my ways.

The fly by night one post wonder guys do a drive buy and there spam does not get deleted.

Thats it, I have learned one thing from my Edmunds friends. I am going to get a lawyer and sue, sue,sue.

qbrozen · September 2009

Oh, I know. I typically call those folks out, too.

And, personally, I use bankrate's calculators, by the by. ;b

grandtotal · September 2009

I don't think bhi is a spammer. Spammers typically post on a number of threads, not just one.

bhi · September 2009

spam?

actually we used edmunds calculator for the final numbers before we signed the papers at the dealer (I dont really trust the dealers) the edmunds calc includes tax and stuff which is cool, the agcalc calculator is good for just quickly seeing the relative difference between different loans, etc.

I just checked it again and the difference between 20k for 48 months at 5% and 4% was $9/month - or did i screw something up?

qbrozen · September 2009

hmmm... maybe I did something wrong. Just checked again and you are correct.

Kirstie_H · October 2009

A high number of complaints about auto dealerships and predatory lending practices are causing several consumer groups to ask that the dealerships be watched by a potential new agency that would oversee consumer financial products.

Consumer Groups Want Dealerships to be Watched by Consumer Financial Protection Agency

pchiffon00 · November 2009

I just purchased a 2010 Honda CRV EX-L 2WD, today and feel I fell into a trap at the dealership, when it came to the interest rate. My credit rating is 835 and they gave me 5.69% APR, and I had to fight to get them to come down from 5.99% I had been an excellent customer and returned a leased Honda Pilot, like new and they even supposedly gave $1,100 in equity toward this purchase. I quoted the rates I had found 2 weeks ago with the range being 4.99 to 5.49% for 36 to 48mos. They suggested I go to the bank or credit union and refinance - for 50- 100 dolllars if I can find a better rate. The price of the car was at invoice, however. Does it sound like I got a fair deal? I DON'T feel good about this. Thanks.

kyfdx · November 2009

I wouldn't be too concerned.. The difference between 5% and 5.7% is only $6/month on $20,000 financed..

The dealer isn't required to give you any interest rate... you have to negotiate for it... To negotiate properly, you need leverage. That leverage comes from knowing what rate you can get elsewhere.. You weren't really trapped at the dealership.. you just weren't prepared.

I'd take the dealer's advice... Shop around local banks and credit unions and see if you can beat their rate. If your credit is that stellar, it should be easy.

regards,
kyfdx

ifontaine · November 2009

Ok, so I went to one of my local Subaru dealers, and bought a new Outback. Got a great price, what I wanted for my trade, and knew all the fees, taxes and what I was going to put down. I put in my present value, future value, interest rate, and number of months into my trusty HP H10B financial calculator and got my payment. I had previously calbrated the periods and finace rate with Edmunds payment calculator, so I knew it to be pretty accurate within $0.05 or so.

When I got into the F&I guy, he tried to pass off my payment being $5.50/month more than what I had. When questioned, it was explained as a "glitch", and new finance agreement was printed off immediately. Over the course of the loan, that was almost $350 extra.

So, how common is this practice? This is why dealers have such a bad reputation. It seems so slimey and unethical. I don't know why it's not illegal, as it was not listed on either the bill of sale, or the finance agreement in the "cost of financing" as an added fee. It just seems soooooooo shady.

Anyone else have any ideas?

tidester · November 2009

They fixed the problem promptly and on the spot. Why would you think it's anything more than a "glitch?"

tidester, host
SUVs and Smart Shopper

ifontaine · November 2009

Numbers are numbers. They are logical and consistent. 2+2 ALWAYS = 4 right? Not 4.1, not 3.9999....but 4.

Same thing with finance numbers. 10,000 financed at 5% over 60 months = $188.71. My HP calculator says that, Edmunds says that. Ford Website says that. So, it's simple to calculate my number. The math works the same in every calculation. But somehow, my amount financed got increased by about $300 or so. The only way it's a glitch is if someone puts the wrong number in. Then it's an embarrassing fat finger mistake, not a computer glitch.

I wish I had access to the loan paperwork and sales orders for a random sampling of deals. My hunch is that this happens more often than not. After re-reading the article "Confessions of an Auto Finance Manager" here on Edmunds.com, I believe the practice is called "Payment Packing". Except they tried to do it to me, and I knew what the numbers were supposed to be.

I have every reason to believe that this is a common practice. I'll need to go home and review the paperwork for the last three cars I've bought now. Dang!!!!

lrguy44 · November 2009

Could you have forgotten a Doc Fee?

ifontaine · November 2009

Here was the deal as agreed to:
Purchase Price: $27,800
Doc. Fee: $250
Trade: ($2,000)
Net Price: $26,050
Tax (7.00%): $1,823.50
Title Fee: $33.50
GRAND TOTAL: $27,907
Down Payment: ($11,000)
Amount Financed: $16,907
Interest Rate: 3.9%
Term 63 mos
Payment: $297.21/mo

But when I got to closing the payment was over $301. If it was a forgotten fee, then why would the F&I guy tear it up and print out a new one? Why wouldn't he explain where I was mistaken on my numbers?

tidester · November 2009

The only way it's a glitch is if someone puts the wrong number in.

Precisely! So the question remains: Why would you think it's anything more than a "glitch?"

You've never punched incorrect numbers into a calculator or computer?

tidester, host
SUVs and Smart Shopper

ifontaine · November 2009

So, you're of the opinion that payment packing does not happen? And even if it does, this is not a case of payment packing?

Of course I've punched in wrong numbers before. But if that's the case, why not say, "Oh, I fat fingered it?" instead of blaming it on the computer? Especially when the bill of sale is correct with the above numbers? And the Interest rate and term of payments is correct?

How do you make that "mistake"? If the "Amount Financed" is the same on both documents at $16,907, where does the mistake happen?

tidester · November 2009

So, you're of the opinion that payment packing does not happen?

I wasn't expressing any opinion. I simply wonder how, on the basis of a single transaction, you might infer that (a) it was actually payment packing and that (b) it is widespread. Just curious.

tidester, host
SUVs and Smart Shopper

ifontaine · November 2009

My bad.....I must of been mistaken. Clearly, one incident of perceived payment packing is not an indication that it actually happened.

But if you recall my original post, I came here looking to see if it was a wide spread "business as normal" approach.

I read previous posts in this thread as well, and was hoping to get other people's accounts as to whether or not they knew if this had happened to them.

tidester · November 2009

and was hoping to get other people's accounts as to whether or not they knew if this had happened to them.

I'd like to know too. Perhaps others will jump in and tell us their stories. Anyone?

tidester, host
SUVs and Smart Shopper

british_rover · November 2009

This is one reason why I always quote payments as about 329 or 399 or 499 at least until the customer sits down to finalize the deal in F&I.

There is always the chance a fee or something isn't in their right and then you get the guy with the spread sheet or Financial calculator who will take you to task over $2.85 a month.

Here is one scenario where payments can get skewed a little and the F&I guy won't notice right off. We have a bank that we no longer use for financing but it is still in our menu as the first bank on the list. Why? Probably because it costs money to have it removed by R&R.

Anyway this bank always charged a bank fee of XXX dollars. When I make a deal as a finance it defaults to that bank unless I change it to a cash deal or some other bank. That fee is worked into the deal already in the back. Even if you switch to a different bank that fee gets left on their unless you delete in manually from the back screen.

You work your payments and I work mine they come out 3 something bucks different because we all forgot the bank fee. You can't get charged the bank fee even if no one caught it because when the office reconciles the deal they won't be able to get the numbers to zero out. Its just like if you overpay a state fee things won't zero out and the back office will send you a check for the difference.

lrguy44 · November 2009

Another thing that can skew a payment by a few dollars is time to first payment. The deal will differ if the computer has 30 or 45 days to first payment - could be a $10 or more difference.

british_rover · November 2009

Oh yeah see I rarely do real F&I work so I forgot about that.

Most banks default to 45 days but if for some reason it was 30 days or 60 days or whatever days if they were running a promotion that would drastically change the payment.

newbie1985 · February 2010

hi I just purchased a car and I dont know how to make my charges over all lesser in the long run...when I pay my monthly payment, there is like an option to put in money for a standard payment and there is an another option where I can pay up for a principal amount. It says there that if I pay the standard payment ( that is principal with interest) my monthly payment etc would be lesser as months go by. And then If I add an amount in the principal payment, no changes in monthly payment would happen. I want to finish paying for the car as far as I can with a lesser overall cost in the end and that would make my credit score still ok. What should I do....is it paying over the standard monthly payment? paying the standard payment, adding up an amount on principal payment and then refinancing my car? What should I do and what are the steps that I should do? Anybody please help.

tidester · February 2010

Ordinarily, when you make the "standard payment," your monthly payments will remain the same. That is also the case when you pay directly toward the principal. The difference is that when you pay directly toward the principal you will end up making fewer payments and you will get a refund on the interest which can be substantial.

tidester, host
SUVs and Smart Shopper

bjrenker · March 2010

I have a 2006 Acura TSX with 33,000 miles on it. I have leased it for 4 years, leased to me based on 28K. I put 2K down and the lease is up next week. Car is in good shape and I like it. Thinking I want to own instead of leasing like I have done for the last 10 years. Is it a good idea to buy the TSX(for 15K)?? I was thinking of putting down a few thousand and then financing for 2-3 years but I am thinking the dealer will just make a ton on me if I do this? My line of thinking was own the car outright in a few yrs and then trade it in towards another car and maybe be able to get 10-14K for the car...

stickguy · March 2010

dealer isn't going to make anything off of you (unless they mark up the interest rate, but you can shop that, and dont have to go with them).

The buy out amount is fixed in your lease contract. So, that is all you should be concerned about (well, that and whatever your turn in fee is, so if you don't pay that on a buy out, deduct it from your cost).

so, decide if the lease buyout is a good deal or not. Could you get the same car for less? Do you want to own a 4+ YO car?

at least with this one, you know the history!

dtownfb · March 2010

To add to stickguy's post, a 2006 acura TSX (automatic) is valued at $16,921 (dealer's price); $15,427, private party. it seems like the $15,000 is a good price.

I would secure my own financing through a credit union or bank and call Acura Financial directly if you are interested in buying the car.

biancar · April 2010

I have a rewards credit card with a $26,000 limit. Usually we put maybe 2k or so on it every month, and pay it off.

Would it be possible to put $20,000 of the price of a new car on a credit card? Again, I would pay it off when it came due, but it would give me $400 in award points for that sum. Do dealers take credit cards for that much on a car purchase?

tidester · April 2010

You will find that some dealers won't take a credit card for payment or may limit the amount that you can charge. Since most credit card companies charge a fee of something like 2%, that would work out to around $400 that they would "lose" on a $20,000 transaction. The sales people here should be able to give you a more definitive answer.

tidester, host
SUVs and Smart Shopper

steine13 · April 2010

Every dealer I've ever met has a limit on credit card transactions; typically $1-2,000.

One exception I've found is the GM Card; it has good rewards AND you can use it to make any payment (or downpayment) at GM dealerships. I don't know about the Chase Subaru card.

Other credit cards, no.

-Mathias

biancar · April 2010

Thanks, guys. I just spoke with my saleswoman and she said the same thing, that I can't do it.

Pity. I was going to use that extra $400 to buy the cargo cover, nets, etc. Wonder if they'd cut me a break on that stuff...

Pick-up of the car has now been postponed to tomorrow. Not because of the credit card, but just works out better for both of us.

lrguy44 · April 2010

If I have a client who wants to purchase accessories (we call it kit) at time of purchase, I will usually offer them sales cost. Not a big savings as parts is a profit center, but it is a discount. Many big stores will not give the salesperson that authority.

biancar · April 2010

Well, I'll ask, at least. Thanks for the tip.

Say a cargo cover costs $100. What would typically be the sales cost of that item?

I think everything I want along those lines adds up to something between $300 - $400.

Plus I was thinking about adding the portable NAV. If I get it with the car, then it's warrantied same as the car, for five years. Different conditions apply if I get it later.

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