my wife and I are currently in the market for a new used car. We've narrowed our choices down to either a Subaru Outback, Subaru Forester or Honda CRV. They're all roughly in the same price range and have similar mpg. However, i'm not sure which is the best way to pay for the car. We can either take out an auto loan through our bank and get 1.9% apr financing, or get financing through the dealership. Since i'm always suspicious of dealerships I thought it would be best to go through my bank. Does anyone know what dealerships charge for apr financing? when I was talking to my brother he said he got a great deal on his Ford Fusion - 0% financing on a new car. I'm also of the opinion that if we took a loan out at our bank and showed up at the dealership with cash in hand they'd be more likely to lower the price of the vehicle if we paid on the spot. Is there any truth to this? We had checked out a Subaru dealership by our house and I left a little frustrated. One sales guy told me they weren't planning on having any end of the year sales and that all of their inventory usually sells right away. The second sales guy essentially said the same thing. Am I wrong in assuming that nobody ever pays the sticker price on a new or used car? I've been using http://www.cargurus.com as a reference tool and it's been pretty handy, but I don't know if I can use it for leverage with a sale person. They may just tell me to get lost and wait for some other sap to come along and pay the sticker price.
car buying advice: pay with loan or finance through dealership?
- Thread starter gaseousclay
- Start date
If they won't work with you at least a little I wouldn't buy anything from them. I would go with who ever has the best interest rates. I got a new car a couple years ago but in my case both interest rates were nearly equall so I went with my personal bank.
I've done it both ways.
Cut the deal on the car first. Then have the dealer run the numbers, it can't hurt. If they come lower than 1.9% go for it.
One thing to keep in mind, there's always more margin on used cars, the dealer makes more profit than on selling a new car. Figure out what you want to pay and be prepared to walk if they don't get close.
Cut the deal on the car first. Then have the dealer run the numbers, it can't hurt. If they come lower than 1.9% go for it.
One thing to keep in mind, there's always more margin on used cars, the dealer makes more profit than on selling a new car. Figure out what you want to pay and be prepared to walk if they don't get close.
Best to go in pre-approved from your bank and see if the dealer can match or beat it. The nice part about having outside approval is that you can take advantage of any cash incentives that might be available in lieu of cheap financing.
No such thing as 0% on a used car.
Go thru the Internet Sales department when you purchase the vehicle, you will get the best deal that way. Just go onto the dealerships website and send in a inquiry on the vehicle you want and you will be sent a price quote.
Go thru the Internet Sales department when you purchase the vehicle, you will get the best deal that way. Just go onto the dealerships website and send in a inquiry on the vehicle you want and you will be sent a price quote.
Dealers try to make extra $$ with add ons-they love selling Life, and A& H insurance on the loan, often alleging it is part of the "package". What those insurances mean to them are profits in the 40-60% range, hence their desire to sell them. Make sure that so called cheap financing they sell is not in lieu of a discount on the price of a car.
Yep. I bought my last car new. Went into the dealership with pre-approved financing from my credit union. After the deal on the car was done, the finance guy at Honda ran my through the system and came up with a better deal, so I ended up financing with Honda.
I've done both as well, but made sure I was pre-approved when I went in there. I decide what I'm willing to pay and tell them when I get there. If they can match it, I buy, if not, I don't. I don't believe in all the haggling and back and forth, so I don't waste their time and don't let them waste mine.
whatever you do,don't buy from the first guy you see.Find out how much the dealer paid for the car with the accessories,then you can go from there,they have to make a profit,but you don't want to give them too much profit....go to several dealers,keep the figures,they will try to cut their buddies price.Shop the last 3 days of the month,even better if it's bad weather...as for financing,only you and your calculator can tell what's best...
However you go about it, I've always found the best place to go for money is just about any credit union. You'll get much better terms there than from any bank.
Slash McCoy
I freehand dog rockets
Myself, I don't like paying for comprehensive insurance, and when you finance, you generally have to get the full insurance package. Insurance is one of those forgotten expenses of having a vehicle, even though it can amount to nearly the purchase price. It is like buying two, but only getting one. Sure, it is nice to know that no matter what happens, your insurance will pay for it, but I have never wrecked a vehicle, nor had one stolen, or destroyed or badly damaged in any other fashion, and I am okay with taking my chances, and just purchasing the required liability coverage. That means paying cash. If the purchase price of the vehicle is less than 25% of your annual income, you might consider saving, and paying cash, and not only reducing your insurance costs, but also avoiding having that note to pay every month, on pain of vehicle reposession. Just something to consider, that has both pros and cons.
GaseousClay, don't forget to check out credit unions--there are a few in the Twin Cities you can join just by living in Hennepin County. We joined one several years ago because their rates were so much better than the banks' and dealerships' rates. We opened an account for $50 and just let it sit. (and not to derail the thread, but it saves us a lot of money on our cell phones, too)
I have done it both ways also, through dealership, banks ( local and non local ) and currently a credit union. The credit union by far has been the best deal and easiest to deal with.
If you are looking for rates bankrate.com is a nice place to start.
the opening post has two themes , (1) comparing dealer financing with the bank and (2) haggling -- regards the former, any financing whether from a bank or the dealer generally includes an interest rate, a term, and payment amounts - knowing any two and one can determine the third - and so it's not APR alone as Big_John in post #3 suggests , you have to look at the specific terms of each arrangement and then maybe determine something like the present value using the given interest of the total outlay under each arrangement.
haggling is an art as much as a science and to be prepared for that you have to do your research beforehand - good luck !!
haggling is an art as much as a science and to be prepared for that you have to do your research beforehand - good luck !!
Do your homework. Get the best bank rate you can and see if the dealer can or will beat it. They have flex on the rate they charge you, providing you have a very good credit rating.There is no need to reply with the answer either way.
- Thread starter
- #18
just to follow up, we ended up financing through the dealership because they were able to beat the 1.89% financing through my credit union.
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