Question on buying car - Loan Process

[Minnie824]

Ok, so we're thinking of buying a new car, but want to go thru our bank for the loan. I haven't bought a car in so long that I forgot how it works. Do we need to have the loan approved before we go 'buy' the car, or do we go to the dealership, sign all the papers, then get them our loan approval? How does this work? Thanks!

 

[Toby'sFriend]

I don't usually finance cars but personally I would shop around at a couple of banks first and get approved for a certain amount at the lowest interest rate possible. Then I would go to the car dealership and force them to negotiate based on the cost of the car and not monthly payments.

Everytime we try to buy a car the dealers only want to talk about what our monthly payment will be -- and they try to make it seem "cheaper" by messing with the term of the loan or bigger down payments and not the price of the car.

 

[holycow]

I would check around too and get approved...they'll let you know how much you can spend and give you a great interest rate too(the rates have been great lately)..then go shopping! But just don't tell the dealer how much you have to spend!

HC

 

[Minnie824]

Well we already know which kind of car we're going to get, how much it is, and have estimated payments...we're just not sure if we have to be approved for the loan before we actually go buy it or how the process goes....our credit union has a pretty good rate at the moment, so we're going to go with that....just haven't applied yet.

 

[bsnyder]

Minnie, I'd definitely check the dealership's interest rate too. Many times they can beat the credit union or banks, because they deal in such volumn.

 

[Dan Murphy]

If you know the car, the price and where you are getting the loan from, let them know you are buying and they will tell you what you need to do. Also, usually by going through your CU or bank or some lending institution, you will maximize any rebates or cash concessions from the dealer, though as Bet says, it is good to check and compare what is available from dealer.

 

[beachbunny]

Also, a lot of dealers are now offering zero percent financing for five years. Can't beat that with a stick!