What's the best way to finance a car?

[bookworm2]

Hello! I read the recent post on Honda Odesseys - very interesting. You're all so knowledgeable that I thought I'd throw out another car question

We're talking about getting a mini-van (Odessey or Sienna) but have some time and want to wait for the best deal. I was wondering if you could tell me what, in your experience, is the best way to finance a car.

We've financed through the dealership in the past, but I don't know if that's the best way to go, or if it's better to look at going through a bank, credit union, etc.

Suggestions?

 

[Muushka]

If there is no deal on financing, we found that our credit union was the best deal. Good luck!

 

[bellarella]

If you have good credit, generally the best way is to wait for dealer financing. These rates are generally below market rates. Just be sure to negotiate your sales price before you discuss with them how you're going to pay for the vehicle. Otherwise you may not get the best price on the vehicle.

 

[1PrincessMomma1]

On the Odysseys the finance rate can not be combined with the factory to dealer incentive so that may affect your price even if you've already negotiated.

 

[Golf4food]

I would only go through the dealer if they are offering 0% or something else very low. Otherwise get pre-approved by a credit union in advance and don't tell the dealer until all the haggling has been done and a final price is set. THEN give them the check from the credit union - otherwise they'll likely charge you more to make up the difference in not doing the financing themselves (where they get a piece of the action).

 

[Green Tea]

If you are a costco member, and worth it to join even if you are not, they have a partnership with Capital One auto finance for cars. You fill out the paperwork online through the Costco Member services link, it takes a couple of minutes. They send you a blank check that you use as cash at the dealership. Negotiate the best price, then fill out the check. As far as the dealer is concerned it is a cash transaction. I've seen any rates lower than the Costco rate from a non incentive manufacturer finance place. Executive members which costs 100 instead of 50 gets another .10 percent off, which makes up for the difference between the 2 membership levels fairly quick;y, I think.

Just looked at rates. New car from dealer with executive member ship would be 5.64% Not sure how that compares to bank rates right now though.

 

[Neiko's Mom]

In my opinion and unless you can nab a 0% interest rate from the car dealer; I will ALWAYS use a Credit Union.

I just bought a 2008 Nissan Altima 2 weeks ago, financed through my Credit Union at the rate of 5.25% for 60 mos.

Nissan was offering 2.9% for 60 mos. The difference in my monthly payment would only have been $25.48, which was not enough to sway from my "loyalty" to the Credit Union.

The dealer finance guy was not a happy camper because not only did I decline his financing, I also declined his LoJack and his service warranty package (which could only be used at his dealership).

To make a long story short, I kindly left his dealership, drove 20 mins to a competitor and bought my new Nissan for $100 over dealer's invoice, received $200 over KBB for my trade, and used my own financing!

 

[1PrincessMomma1]

In my opinion and unless you can nab a 0% interest rate from the car dealer; I will ALWAYS use a Credit Union.

I just bought a 2008 Nissan Altima 2 weeks ago, financed through my Credit Union at the rate of 5.25% for 60 mos.

Nissan was offering 2.9% for 60 mos. The difference in my monthly payment would only have been $25.48, which was not enough to sway from my "loyalty" to the Credit Union.

The dealer finance guy was not a happy camper because not only did I decline his financing, I also declined his LoJack and his service warranty package (which could only be used at his dealership).

To make a long story short, I kindly left his dealership, drove 20 mins to a competitor and bought my new Nissan for $100 over dealer's invoice, received $200 over KBB for my trade, and used my own financing!

If you'd taken the 2.9 you'd have saved over $1500 over the life of the loan. I'd rather save that money than loyalty to a CU.

 

[Neiko's Mom]

If you'd taken the 2.9 you'd have saved over $1500 over the life of the loan. I'd rather save that money than loyalty to a CU.

I'm very aware of the $1500 savings ($25.38 x 60 mos.); however, the approach of the finance guy (he was more high-pressure than the salesman) was enough to make me not want to give him my business anyway.

For me, it's not always about the $$$...and I'm not rich by any means!

The same credit union financed my home, the car I traded, as well as our 2nd car (which has been paid off for 3 yrs). I'm happy with them, they're obviously happy with me (judging by the great rates), so as of now I see no reasons to sway!

 

[HeatherC]

We bought a Sienna last fall when Toyota was running a 0% deal. But...we went prepared because we had heard they only offer those deals to their "best" customers. Apparently, a lot of them get you in the door and then tell you that you're not eligible.

So...we used Autobytel to negotiate a price with several local dealers. We picked the lowest one and made an appointment. When we got out of the car, we handed the guy our licenses and told him to go run our credit. If we didn't qualify for 0% we were leaving. He was a little taken aback but he did it. Once he came back and said our credit was great...which we knew, he then started giving us the spiel. But we cut him off, told him the price we were quoted, asked to drive the vehicle, and told him we would take it. We had even figured out all the taxes and registration fees before we even got there. Yes, he tried to do upgrades, but we stuck to our guns and he matched the price down to the penny and we aren't paying any interest on the loan for 5 years.

We have never done a 5 year loan, but we figured since we aren't paying any interest, there is no hurry to pay it off unless we decide to.

If he had tried to do the typical bait and switch, we would have walked and gone somewhere else. And unless they were running the zero interest, we would have also used a credit union.
Best of luck to you.

Heather

 

[1PrincessMomma1]

I'm very aware of the $1500 savings ($25.38 x 60 mos.); however, the approach of the finance guy (he was more high-pressure than the salesman) was enough to make me not want to give him my business anyway.

For me, it's not always about the $$$...and I'm not rich by any means!

The same credit union financed my home, the car I traded, as well as our 2nd car (which has been paid off for 3 yrs). I'm happy with them, they're obviously happy with me (judging by the great rates), so as of now I see no reasons to sway!

Most finance guys are high pressure thats where they make the money. I don't even give them a chance. I go right in saying I'm not getting anything extra so don't waste your time or mine. If they persist then yes I leave but most will realize that you are serious and go on from there. I know what I'm paying when I go in and quickly tell them to remove any doc fee's or junk fee's right away. I know my purchase price & TTL before I even go into the dealer. I would have let the other dealer finace me for the 2.9 if they offered it or find another one offering it since money is money to me.

 

[Muushka]

I am remembering back to an auto-purchase fiasco. They offered financing with a $500 rebate if you used it. We asked if we paid it off in 2 months, would there be a pre-payment penalty? They said no. So we did the paperwork and the final numbers did not add up. I missed it (and believe me, I don't miss much when it comes to finances) but my husband caught it. They tacked on an extra $800 or so fee for the financing. It was the insurance that if you wreck your car the car would not be valued at less than what you owe. In addition to the $800, there was another $1600 tacked on for mechanical warranty and a bucket of cleaning stuff that the salesman touted as "free". $2400 added to the price of the car that was hidden away in the financing!!!!

Needless to say, we walked. Never to return. And for those here in NC, I won't name the dealership, but the hint is they sponsor the NASCAR top (NOT my favorite) racing team #24, #48 and Jr's car. So sad for Jr to be racing for such a lousy organization. Sorry, I digress.........

So, in conclusion, if you ever finance at the dealership, CHECK THOSE NUMBERS!!! They are very sneaky.

 

[bnorm27]

It is best to shop around for your own financing before you get to the dealership. As some of the previous posters have stated, most credit unions offer better rates then the banks or the dealers, unless of course you get a good finance rate from the dealer. Many credit unions also offer longer terms on vehicle loans. If you belong to one, or can join one, It is worth checking out.

Dealers will generally steer you towards the financing company that gives them the best kickback. Be sure to ask what banks they deal with, and if you already have a relationship with that bank, you could get a better deal.

Do your homework regarding the price of the vehicle as well. And remember one things. You hold the ultimate power as the customer. If you think you aren't getting a good deal, get up and walk out the door!

 

[Green Tea]

We bought a Sienna last fall when Toyota was running a 0% deal. But...we went prepared because we had heard they only offer those deals to their "best" customers. Apparently, a lot of them get you in the door and then tell you that you're not eligible.

So...we used Autobytel to negotiate a price with several local dealers. We picked the lowest one and made an appointment. When we got out of the car, we handed the guy our licenses and told him to go run our credit. If we didn't qualify for 0% we were leaving. He was a little taken aback but he did it. Once he came back and said our credit was great...which we knew, he then started giving us the spiel. But we cut him off, told him the price we were quoted, asked to drive the vehicle, and told him we would take it. We had even figured out all the taxes and registration fees before we even got there. Yes, he tried to do upgrades, but we stuck to our guns and he matched the price down to the penny and we aren't paying any interest on the loan for 5 years.

We have never done a 5 year loan, but we figured since we aren't paying any interest, there is no hurry to pay it off unless we decide to.

If he had tried to do the typical bait and switch, we would have walked and gone somewhere else. And unless they were running the zero interest, we would have also used a credit union.
Best of luck to you.

Heather

You are a very smart consumer! That is how I buy cars too. We have bought 3 where we sent out emails to dealers and said we'd buy the lowest price. We cast our net wide too-one took a weekend's drive to pick up. We knew we were set on the price, and after we looked over the car and drove it, which we had never done, we took them home.

I've never had the office guys bother me though. One offered a lower rate than through Costco, and at the time their program said they guranteed to be the lowest. I called them and they lowered their rate to beat the dealer and off we drove.

 

[MinMouse]

I must say I love HeatherC's method! The last car we bought we went to a local dealership and drove it. They wouldn't deal on price. So we shopped the internet through the GM site and were able to see what dealers had in actual inventory. We got several quotes via e-mail. The cheapest was $2000 less than the original price where we test drove ($19K instead of $21K . . . a 10% savings!). We had our own financing. We went to the dealership which was about 45 minutes away into PA (we're in DE); test drove; gave them the check! It was painless and the dealer knew exactly why we choose them . . . price!

Has anybody ever used BJ's Wholesale for the financing?

 

[mrsklamc]

We compared dealer financing, Costco financing, our credit union and lendingtree.com

For us the credit union was far lower than any other option.