Buying a car... do you get your own financing or go the dealer? (1 Viewer)

[lombardi]

I used to just go to the dealership and after negotiating used their financing, after negotiating that a bit.

The last time I bought a car I actually got financing before I went in. Then after the price was settled I pulled that out and then they went in and made some calls and beat the perc. I was pre-approved at.

I'm looking for a minivan and I can usually find a decent deal on the price but I'm wondering how I should go about getting the best financing.

 

[Frank Drebin]

I do the same thing you did last time. Be prepared with the best financing you can get ahead of time and let them beat it at the dealership.

 

[Chadstroma]

Dealers have wholesale access to car loans. Essentially, the higher the rate they charge you the more money they make. That is why they ask you how much you can afford to pay a month or what you want to pay etc. They take the price and play with the rate. As long as they can make something they will get you the lower rate. Find the lowest rate you can find (bank, CU, etc) and then take that in. Tell them you are financing and that you have X rate. Most likely, they will offer you lower. You can play the 'let me check with my bank' and come back and let them know you might be able to get lower and see if you can get lower.

Most banks/CU's will not negoitate their rates though some may.

 

[culdeus]

Dealers have wholesale access to car loans. Essentially, the higher the rate they charge you the more money they make. That is why they ask you how much you can afford to pay a month or what you want to pay etc. They take the price and play with the rate. As long as they can make something they will get you the lower rate. Find the lowest rate you can find (bank, CU, etc) and then take that in. Tell them you are financing and that you have X rate. Most likely, they will offer you lower. You can play the 'let me check with my bank' and come back and let them know you might be able to get lower and see if you can get lower.

Most banks/CU's will not negoitate their rates though some may.

I had an interesting situation with my CU. They got undercut at a dealer so I just called the loan officer and told him. Somehow he already knew what the dealer offered me before I called and had already lowered the rate.

Was a little creepy since I didn't even tell him what car I was looking at. I guess they were in the network and can see anyone buying a car. I don't really get how that's legal, but whatever.

So bottom line they all know what everyone is offering.

 

[Dentist]

straight cash, homey.

If you are financing a car, you probably can't afford it.

If you do finance and accept over a 3 year load, you DEFINITELY can't afford it.

 

[Chadstroma]

Dealers have wholesale access to car loans. Essentially, the higher the rate they charge you the more money they make. That is why they ask you how much you can afford to pay a month or what you want to pay etc. They take the price and play with the rate. As long as they can make something they will get you the lower rate. Find the lowest rate you can find (bank, CU, etc) and then take that in. Tell them you are financing and that you have X rate. Most likely, they will offer you lower. You can play the 'let me check with my bank' and come back and let them know you might be able to get lower and see if you can get lower.

Most banks/CU's will not negoitate their rates though some may.

I had an interesting situation with my CU. They got undercut at a dealer so I just called the loan officer and told him. Somehow he already knew what the dealer offered me before I called and had already lowered the rate.

Was a little creepy since I didn't even tell him what car I was looking at. I guess they were in the network and can see anyone buying a car. I don't really get how that's legal, but whatever.

So bottom line they all know what everyone is offering.

Most likely the CU was one of the wholesellers that the dealership had. The dealership will run your info and then offer it to the lenders to get their rates. The lenders the show the dealer the rate and their cut based on the rate. The dealer will then offer the customer the rate they have- trying to give them the highest rate possible in order to get the sale but get the biggest kickback. For a CU they are small enough for your guy to be in the loop on an inquiry for wholesale and/or the computer system matched it up.

Different companies will not know what other companies are offering. Now, if you say I am getting a 1% on a 60 month loan- which is out of line with what the industry is offering now outside of car maker special offers- then they will say "best of luck" but you can use rates and play them off each other. I got my last car loan down a bit down. The dealer basically ended up giving me the lowest they could.

 

[NREC34]

straight cash, homey.

If you are financing a car, you probably can't afford it.

If you do finance and accept over a 3 year load, you DEFINITELY can't afford it.

I get that and you're probably right but if you really have to have a car due to your old one dying then you have to do it. Especially if a car is your only way to get to your job to continue making more money.

 

[lombardi]

I generally buy a 2-4 year old car, with a 3 year loan.

 

[Bull Dozier]

straight cash, homey.

If you are financing a car, you probably can't afford it.

If you do finance and accept over a 3 year load, you DEFINITELY can't afford it.

noautofinancing.com

 

[Instinctive]

I would never buy I car I couldn't pay cash for.

That doesn't mean I wouldn't finance, per se. If you're willing to give me a "12 months 0%" loan with no prepayment penalty, I'll just set the money inside and earn something on it before paying off prior to interest kicking in.

 

[Wooderson]

Here is the play on a new car. Many have incentives to use the dealers financing. You get that get the 5k rebate or whatever it is. Make one payment then go to your credit union and get a better rate on a a new loan.

 

[cstu]

straight cash, homey.

If you are financing a car, you probably can't afford it.

If you do finance and accept over a 3 year load, you DEFINITELY can't afford it.

Beat me to it.

 

[fruity pebbles]

Some of the lease specials out there on cars that hold their value well and have a high residual are very tempting. Can get a new Honda Accord for around $200 a month. Hell, maintenance and repairs on an older car will run you $100 a month on average.

 

[Dentist]

straight cash, homey.

If you are financing a car, you probably can't afford it.

If you do finance and accept over a 3 year load, you DEFINITELY can't afford it.

I get that and you're probably right but if you really have to have a car due to your old one dying then you have to do it. Especially if a car is your only way to get to your job to continue making more money.

Depending on how picky you are and how diligent you are, you can probably find a car that you can write a check for. It may be a POS and may not last more than a few years, but the savings you receive from a low insurance rate, low property tax rate, and not having a car payment should allow you to save for a better car when you can afford it.

 

[belljr]

Last 2 cars have been 0% through dealer. I didn't bother putting any cash down

 

[Chadstroma]

Last 2 cars have been 0% through dealer. I didn't bother putting any cash down

If being offered 0% financing vs cash rebate- always do the math. Most times you can get a low auto loan rate and take the cash rebate (used back into the purchase price) and come out ahead.

 

[tommyboy]

I just buy vehicles for my business and write them off, and tge govt gives me money

 

[FUBAR]

Some of the lease specials out there on cars that hold their value well and have a high residual are very tempting. Can get a new Honda Accord for around $200 a month. Hell, maintenance and repairs on an older car will run you $100 a month on average.

Depends how old and crappy the car but your point is solid.

I still won't ever lease a car again. You get nothing at the end of the two years. I had done this in college with a Ford ranger, $99/month and the term ended a month after I graduated. At the time it made sense but the circumstances when it does are limited.

 

[pollardsvision]

Some of the lease specials out there on cars that hold their value well and have a high residual are very tempting. Can get a new Honda Accord for around $200 a month. Hell, maintenance and repairs on an older car will run you $100 a month on average.

For some, maybe, but you're certainly overstating it.

I've got 3 vehicles with a combined 957,000 miles on them. Now, the truck has about half of those and isn't a daily driver, but runs pretty well and the only repair it's had in the 5 years I've owned it is a new starter (that I did myself with a $180 part). After 5 years of use, I should be able to sell it for damn near what I paid for it.

My main daily driver has 287K still on the original engine, transmission, and, clutch. Only one repair over a couple hundred bucks ($1500) in the 14 years I've owned it. Probably about $2500 in repairs over 14 years (and I honestly can't remember even spending the other $1000, just over estimating).

I'm getting ready to give it to my niece, and I glanced around at some prices on the same year/model, and I could probably get $3500 for it if I was going to sell it.

The "baby" of the bunch has 170K and I haven't had it that long, so I have no idea what repair costs will be.

When you say "older" I assume you are talking about far newer vehicles than the beaters I drive and repair costs don't come close to $100 a month. There's no way leasing is cheaper than driving beaters or keeping new/newish cars until they die.

Leasing really only makes sense if your job or personality requires you constantly be driving a nice, new car, or if you simply can't deal with the hassle of owning a car.

 

[belljr]

Last 2 cars have been 0% through dealer. I didn't bother putting any cash down

If being offered 0% financing vs cash rebate- always do the math. Most times you can get a low auto loan rate and take the cash rebate (used back into the purchase price) and come out ahead.

no rebates.

 

[Patrick Bateman]

Put nothing down, and go in pre-approved. Any trade, or $$$ that you give them goes straight to their pockets.

 

[Lester Burnham]

I drive beaters so financing is not an issue. BUT... the dealer financing is rigged, just like the undercoating, fabric protection and snake oil clear coat protection.

Get a loan commitment elsewhere & make your best deal. Sell your trade in to CarMax too. Dealer trade in value sucks. Money talks.