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Getting auto finacing at the dealer

mattocs

Platinum Member
Jan 25, 2005
2,246
0
0
The wife and I are going to look at some cars tomorrow. We both have credit, but a decent bit of debt. We both have had car loans, but each had a co-signer as they were our first cars and we were young and had no credit then.

We have some credit card debt (combined about $8.000ish) never had late payments, own our home (8 months now) but our credit scores are in the low 600s. Our combined income is about $45,000 per year.

My question is, do you think the dealer will get us financing? We are not looking to buy a nice new car, but a used one for about $10,000 or so.

I just don't want to get there and they tell us they can't do anything. I know I should have arranged financing beforehand like on our previous cars, but I need a new vehicle now.

Any one think the dealer could get us the loan? I know the interest won't be great.

Thanks.
 

compuwiz1

Admin Emeritus Elite Member
Oct 9, 1999
27,059
864
126
I'm the finance director at my dealership. Your case seems viable, and pretty much what I see everyday. An alternative to you would be to join a major credit union and see if you can get preapproved for up to say, $13000. That way you can look at a $10,000 used car, have room for tax and license, and possibly buy a warranty for it, if you like. You'll most likely get a better rate that way. Most banks, just looking at your scenario, will probably charge you from 10-12.9% interest, maybe as high as mid teens.
 

Aimster

Lifer
Jan 5, 2003
16,129
2
0
why not go to a bank yourself?

Dealer calls bank. Applies for you. Bank gives dealer a rate.
Dealer adds 2-3% on that rate
You have no choice but to accept
Guy who did the loan goes home with a big fat check smiling.
 

compuwiz1

Admin Emeritus Elite Member
Oct 9, 1999
27,059
864
126
Originally posted by: Aimster
why not go to a bank yourself?

Dealer calls bank. Applies for you. Bank gives dealer a rate.
Dealer adds 2-3% on that rate
You have no choice but to accept
Guy who did the loan goes home with a big fat check smiling.
Aren't you funny. ;) Dealers can get deals done based on banking relationships. Dealer's also understand lending criteria. Dealer does not always add 2-3%, infact very rarely. These days it's limited to no more than 2 points. In many cases none at all, although they do pay a flat fee of $100-$300 to the dealer for writing the loan, sometimes, which is common.

 

TechBoyJK

Lifer
Oct 17, 2002
16,701
60
91
Originally posted by: mattocs
The wife and I are going to look at some cars tomorrow. We both have credit, but a decent bit of debt. We both have had car loans, but each had a co-signer as they were our first cars and we were young and had no credit then.

We have some credit card debt (combined about $8.000ish) never had late payments, own our home (8 months now) but our credit scores are in the low 600s. Our combined income is about $45,000 per year.

My question is, do you think the dealer will get us financing? We are not looking to buy a nice new car, but a used one for about $10,000 or so.

I just don't want to get there and they tell us they can't do anything. I know I should have arranged financing beforehand like on our previous cars, but I need a new vehicle now.

Any one think the dealer could get us the loan? I know the interest won't be great.

Thanks.
i'd check into capital one, even though i just had a bad experience with them, it was partially my fault. c1 will approve you online, then send you a blank check that is good up to a certain approved amount. Then you can go negotiate the deal, cut the dealer the check, etc.. Only issue is that you have to wait for the check to clear, which takes about 72-96 hours.. or as much as 5 days..



 

mattocs

Platinum Member
Jan 25, 2005
2,246
0
0
Thanks guys.

If the rate is really high, I can always refinance it after I pay off some debt.

I figured my situation was the same as a ton of other people who buy used cars.

Thanks again.
 

mattocs

Platinum Member
Jan 25, 2005
2,246
0
0
Originally posted by: oldsmoboat
Do you need the car now or can you pay off some debt first?
Need the car now. I am okay with the higher interest...as long as I can get something.
 

TechBoyJK

Lifer
Oct 17, 2002
16,701
60
91
Originally posted by: mattocs
Thanks guys.

If the rate is really high, I can always refinance it after I pay off some debt.

I figured my situation was the same as a ton of other people who buy used cars.

Thanks again.
don't let the idea that you can refinance later keep you from really digging for the best rate now.
 

compuwiz1

Admin Emeritus Elite Member
Oct 9, 1999
27,059
864
126
mattocs, also a couple things to be prepared. Have at least 3 personal references, as will be required on the credit application, complete with addresses and phone numbers. You will also need proof of income, usually your most recent paystubs, as well as proof of where you live. A utility bill showing your address will normally suffice. The more info you have on hand at the time, the better your chances of being immediately approved.
 

mattocs

Platinum Member
Jan 25, 2005
2,246
0
0
Originally posted by: compuwiz1
mattocs, also a couple things to be prepared. Have at least 3 personal references, as will be required on the credit application, complete with addresses and phone numbers. You will also need proof of income, usually your most recent paystubs, as well as proof of where you live. A utility bill showing your address will normally suffice. The more info you have on hand at the time, the better your chances of being immediately approved.
Our address on our drivers licenses and address on paystubs isn't enough?

What about a copy of the deed to our home?

(all our bills are done online so we eliminated all our paper bills)


EDIT: I found water and trash service bills. I guess we do get some paper bills.

Thanks again.
 

Kelemvor

Lifer
May 23, 2002
16,930
7
81
Definitely call a couple banks, credit unions, etc before you go and just ask them what rate you could expect based on whatever car you are looking at. Then you have something to compare to when the stealership gives you their info.

And when negotiating, DO NOT give them an amount that you feel you can afford per month. ONLY negotiate off the total price of the car.
 

RossMAN

Grand Nagus
Feb 24, 2000
78,794
256
116
With any financial product, it pays to shop around.

I was in a similiar situation, dealer gave me 8.50% and I took it.

We made on time payments for 12 months then refinanced with a local credit union for 3.95%.
 

biggestmuff

Diamond Member
Mar 20, 2001
8,201
1
0
compuwiz1, what's up with the interest rates lately? I just bought a new car, went through my back and they gave me 5.99%. What happened to the 2, 3 and 4% rates?
 

smitbret

Diamond Member
Jul 27, 2006
3,389
23
81
Same job as Compuwiz1. Unless you have established a good relationship with a credit union, you'll get the best deal overall by going to the dealership. It's no secret that dealerships make money when they get to do the financing, so they are often willing to take a little off the front to get a little on the financing arrangements. Also, it's a rare thing when I can't get a better rate than you can by getting your own financing, it's what I do and spend my days building relationships with lenders so when I need a good rate on a guy that is a 622 with a bunch of debt, I can call in a favor. If I do hold 1 or 2 percent on that guy, it is still better than the 12.99 he gets by obtaining his own financing.

The one place where you can do better on your own is when you are a sub-prime (less than about 680) and have a credit union you can use, then I usually can't compete with a 7.59 or whatever they will give you. Even then, it's usually worth a shot to see what I can come up with cuz about a third of the time, I'll still beat it.

Sounds like you are on a bit of a budget, so haggle with the guy in the back office a little, but let him know you'll buy a warranty. Get one with a deductible of $50 or $100 (cost about half as much), he'll probably shave a little off the rate to make it fit your payment and you'll have some piece of mind if your car breaks down.

Oh and one last thing, the one sure way to make sure you don't get the best deal on a car is to walk in with a blank Cap One check. They are nothing but headaches for dealerships.
 

Special K

Diamond Member
Jun 18, 2000
7,098
0
76
Originally posted by: RossMAN
With any financial product, it pays to shop around.

I was in a similiar situation, dealer gave me 8.50% and I took it.

We made on time payments for 12 months then refinanced with a local credit union for 3.95%.
How do you find the lowest rates? Do you just start calling around? Are the numbers given on Bankrate accurate?
 

vi edit

Elite Member
Super Moderator
Oct 28, 1999
61,319
5,158
126
Just hit the websites of your local credit union and see what rates are being offered at the terms you want. Those typically are the best rates available and only go up. You might get a quarter point discount for auto withdrawals, but typically that's what you'll be getting.

Have that in hand and ask the dealer what he can do. In three separate financings, a dealer was able to beat the best rates I could find on my own.

But I've had great credit (740+) in each situation so obviously YMMV.
 

RossMAN

Grand Nagus
Feb 24, 2000
78,794
256
116
Originally posted by: Special K
Originally posted by: RossMAN
With any financial product, it pays to shop around.

I was in a similiar situation, dealer gave me 8.50% and I took it.

We made on time payments for 12 months then refinanced with a local credit union for 3.95%.
How do you find the lowest rates? Do you just start calling around? Are the numbers given on Bankrate accurate?
Actually I found it by accident walking around during lunch time. I saw an advertisement in the window of a small CU (one branch). A week later my wife and I came in, applied, I was 99% they'd decline us but we were approved. They inspected the collateral, approved it and we signed loan documents.

I wonder if there is a lendingtree.com equivelant for CU's?
 

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