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Car Shopping

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Posted

a bank loan will give you a bit more negotiating power.

Also, not true for everyone, but my credit union offers 1.9% financing on used vehicles. no used car lot will touch that.

Maybe not a rock lot, but a real dealership can do that all day long for qualified buyers.

 

And to be honest it does not give you any leverage at all in negotiating.

 

Dealerships get a small kickback for any loan they send to a bank, so if you finance elsewhere it cost the dealership money in the form of a kickback they'd get from the bank.

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Posted

That's the first time I've seen that.  Usually it's get the lowest payment possible, that way you can increase the payment on your own and if something comes up, you aren't locked into a higher payment.

 

Interesting.

 

The problem here lies in the fact that most Americans pay what they owe, and nothing more.  It's why folks have student loans for 10 years after they graduate.

 

Same as a home, if you can swing the 15 year mortgage, go for it.

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Posted

I hear ya on the 36 month loan thing but I don't know what kind of car that's going to get somebody who does not have a a large monthly budget.

 

Also dealer financing isn't the devil. If they can get you the same or lower rate then why not?

 

You can find an 08 or 09 Honda Accord for 15K or under depending on what all he wants in it.

 

He said that he has 3K to put down, and hopefully can get 1K out of his Suzuki.

 

Lets say 15,500 for the tax, tags, and title work, minus 4K for trade and down payment = $11,500 financed.

 

On a 36 month loan with 5% interest rate payment would be roughly $345 per month.

 

He said that he can swing 300-400 monthly.

 

Below is a link to a low mileage one in ILM, although it doesn't have all the bells and whistles.

 

http://www.autotrader.com/cars-for-sale/vehicledetails.xhtml?zip=28411&endYear=2009&modelCode1=ACCORD&showcaseOwnerId=66424799&startYear=2006&makeCode1=HONDA&searchRadius=25&showcaseListingId=356742855&mmt=%5BHONDA%5BACCORD%5B%5D%5D%5B%5D%5D&listingId=349215744&Log=0

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Posted

I hear ya on the 36 month loan thing but I don't know what kind of car that's going to get somebody who does not have a a large monthly budget.

 

Also dealer financing isn't the devil. If they can get you the same or lower rate then why not?

 

As for dealer financing, I have no problems with it at all, but I have purchased 10 or so cars over the last 15 years and I know what I am looking at when it comes to financing.

 

He seems like a new purchaser, and a good car salesman could easily "convince" him to get the better "deal" tack on another year to his payments, and still lower the payment at the same time.

 

Not saying that there is anything wrong with that, it's the salesmans job.  If he walks onto a lot that has what he is looking for, and he knows his top dollar price, it will take some of the uneasiness out of the deal.

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Posted

Definitely the dealerships can compete with banks on financing, especially when the Auto companies offer reduced financing which can be as low as 0% financing. The easiest way to check APR rate for any type of loan whether personal, mortgage, or auto, is to go to Bankrate.

Here is from their auto loan page, here are local Charlotte auto rates from all the different lenders, Also remember that going outside dealership for financing can result in additional origination and processing charges, so ask for total fees before deciding

http://www.bankrate.com/funnel/auto/auto-results.aspx?prods=73&zip=&MSA=5560

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