OT: New Vehicle Financing Question

SyonaraStanz

Senior
Mar 5, 2010
3,229
583
113
I just purchased a new truck, and I'm not happy with the rate I got through the dealership's financing department. Do any of you have any suggestions for good low rates? I've talked to MS Telco credit union, and they are in the low 2% range.

Thanks in advance.
 

The Peeper

Heisman
Feb 26, 2008
16,992
12,868
113
NEVER, NEVER, trust the dealership finance mgr (guy you sign all the paperwork with) to guide you to a particular finance company. Depending on whom they pick can mean hundreds of $$$ in difference in commissions to their dealership and to themselves, not to mention football tickets, condo use, trips, etc. ALWAYS know before you walk in the door whom YOU will be using to finance your vehicle. Don't believe that lie they tell you about their volume gets them better rates, it gets them better commissions is what it gets them. If their lips are moving they are lying
 

johnson86-1

All-American
Aug 22, 2012
15,275
5,813
113
I just purchased a new truck, and I'm not happy with the rate I got through the dealership's financing department. Do any of you have any suggestions for good low rates? I've talked to MS Telco credit union, and they are in the low 2% range.

Thanks in advance.

Is low two's not a good rate on a car now? I would have thought that was about as good as it gets outside of dealerships offering a low rate but essentially building interest into the purchase price.
 

EurekaDog

Redshirt
Nov 10, 2010
598
0
0
Horse is out of the barn, but for future purchases, ALWAYS check out CUs ...

and local banks BEFORE you make the purchase.

Otherwise, if you "really want" that car, give the dealer a down payment to hold the car for you while (within 24 hours) you check out local lending institutions.

In your present situation, if you find an interest rate that will save you money in the long run, go ahead and refinance.
 

patdog

Heisman
May 28, 2007
61,337
33,064
113
I doubt you're going to do any better than that. And, peeper's advice is right. Always line up your financing before you even go in to the dealership.
 

SyonaraStanz

Senior
Mar 5, 2010
3,229
583
113
It was Saturday night, so I didn't have the ability to shop rates. I hoped the dealership could find an acceptable rate; poor assumption on my part. I think low 2's is good, but I wasn't sure if anyone knew of anything better or any specials going on right now.

Thanks for all of the help and information.
 

fishwater99

Freshman
Jun 4, 2007
14,073
54
48
I just purchased a new truck, and I'm not happy with the rate I got through the dealership's financing department. Do any of you have any suggestions for good low rates? I've talked to MS Telco credit union, and they are in the low 2% range.

Thanks in advance.

Why did you buy it if you didn't like the rate? Have you already signed the papers?
 

karlchilders.sixpack

All-American
Jun 5, 2008
21,368
5,070
113
The F & I Manager

is supposed to stand for Finance and Insurance.

But as one car dealer friend told me,

It stands for ... 17ing Included.
 

Dawgpile

Senior
May 23, 2006
2,423
923
113
There are a tremendous amout of variables that determine interest rates offered to car buyers. Credit is obviously not an issue from the rate you signed for, but what lender gave you your loan, what year model you purchased, and what brand you bought might help determine the fairness of your rate...

I work in the car business, and may have some insight for you.
 

mcdawg22

Heisman
Sep 18, 2004
13,781
12,430
113
I just purchased a new truck, and I'm not happy with the rate I got through the dealership's financing department. Do any of you have any suggestions for good low rates? I've talked to MS Telco credit union, and they are in the low 2% range.

Thanks in advance.
I work for a CU, so apologies for the long reply. Assuming it is a simple interest loan there should be no penalty for paying off the loan early so you shouldn't expect there to be a penalty. In Florida there used to be Document stamp fees which were a little over $400, so if you are talking a 1 percent reduction on a 60 month loan it wasn't worth it. I don't know if the state you live in has that. In Florida you only pay the title transfer fee, which is minimal, less that $50. Rates here are as low as 1.79 for 66 months maybe 2.25 for 78 assuming A+ credit (750 and higher). The kicker is what your CU will consider for the refi. If they are willing to treat the vehicle as a new car, they will use MSRP as the LTV, (loan to value), meaning the will loan 120% of whatever the suggested price is. The extra 20% includes products such as GAP and Extended Warranty, and Tax tag and title. If not they have to take the NADA value of a used vehicle, which as you know, as soon as you drive it off the lot new cars depreciate. So talk to the CU and see what they can do and get an idea they will give you all of the info before you commit to anything, the only thing that it cost you is another credit pull which dings you 3-5 points but it is something that in the long run isn't that big of deal. Also, and this is for everybody GAP, which I recommend for anybody purchasing a new car, is typically cheaper at the CU, and so is Extended Warranty. Our GAP is $399, I saw a buyers order for a car today and the dealership's was $699. The other benefit is with a CU you can go in and talk to someone. If you forgot to make a payment and are 10 days late, good luck getting a waived late fee from Toyota Finance, but your local CU manager will probably have the power to waive late fees as a courtesy. I do it all the time. ETA: I could do the refi for you but that involves a visual inspection and unless you want to come on vacation to the beach in winter it would be really inconvenient for you.
 
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mcdawg22

Heisman
Sep 18, 2004
13,781
12,430
113
help me out here - what is GAP? probably something I overpaid for apparently....
Gap insurance is an optional insurance on vehicles. If you drive a 30k car off the lot and get in a total accident, most insurance companies are only going to cut a check for the blue book of the car. That value is going to be WAY less than what you paid for it probably 25k. As you drive the car the car depreciates even more, often more than what you are paying down on the principal. So during that time, when you get that check from the insurance company it's going to be for, say 21,000 but you still owe 27,000 on the loan. You are on the hook for that 6k. If you have Gap it pays everything that insurance doesn't pay on the loan balance. If you are getting a new car it makes sense (in theory), if you are getting a used car that holds its value, or is worth more than the loan, it's a waste of money.
 

deanbar

Redshirt
Sep 20, 2007
350
0
0
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DirtyDog

Redshirt
Aug 24, 2012
520
14
18
Mutual Credit in Vicksburg is around 1.99% for a new vehicle. Most financial institutions use risk-based financing so your rate is mostly dependent on your credit score. Anything over 650 gets you the rate noted, but a worse credit score will only qualify you for higher rates. That's probably as good as you are going to get without the dealer 0% incentive. It's actually not all that unusual for people to buy a vehicle through a dealer and turn around and then get the loan through the credit union. It's a matter of pre-planning and convenience. Sometimes its just convenient to make the deal and handle the details later as long as their isn't a penalty with the initial financing.
 

Maroon Eagle

All-American
May 24, 2006
18,677
8,707
102
I think that rate level was also good for newer used cars...

...a couple years ago when Mutual financed my purchase.
 

drt7891

Redshirt
Dec 6, 2010
6,727
0
0
The GAP also lasts longer the longer length of time your loan covers. My advice is never get a car you can't pay off in 3 years. Smaller payments mean you aren't paying as much on principal, and the faster depreciation outpaces what you owe (to a point).

Most cars depreciate between 23-30% a year. If you buy a $20,000 car and finance it for 5 years, it will take about 2-3 years before your loan obligation becomes less than the resale value of the car.

I don't want to sound like Dave Ramsey because I'm not anti-debt, but it's not wise to hold onto assets that spend a long time upside-down. Interest rates don't affect that as much as the length of time it takes to pay down the principal. It means you are holding onto something you have to pay to get rid of.
 
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