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-   -   How bad are dealer loan rates? (https://www.camaro6.com/forums/showthread.php?t=438786)

M12LRV 02-02-2016 01:22 PM

How bad are dealer loan rates?
 
How much higher are dealers rates than banks? I don't want to shop around at banks because they will pull my credit, and lower it and I don't have a credit union. What have you guys been doing?

ChefBorOzzy 02-02-2016 01:26 PM

Your dealer would send your application to multiple banks or to whichever you want.. Therefore, you'd have multiple inquiries anyway. At least this is my understanding from my experience.

I would NEVER, and I mean NEVER (unless 0 percent from manufacturer) get a loan via dealer again.

I wouldn't be surprised if they send it to banks they work with where they get kickbacks or something for higher rates.

Credit Union.. Do it.

nyrfan 02-02-2016 01:27 PM

Quote:

Originally Posted by ChefBorOzzy (Post 8878071)
Your dealer would send your application to multiple banks or to whichever you want.. Therefore, you'd have multiple inquiries anyway. At least this is my understanding from my experience.

I would NEVER, and I mean NEVER (unless 0 percent from manufacturer) get a loan via dealer again.

I wouldn't be surprised if they send it to banks they work with where they get kickbacks or something for higher rates.

Credit Union.. Do it.

I agree, A Credit Union is the ONLY way to go!!

Glen e 02-02-2016 01:33 PM

dealers have the same rates as everyone else, but then they bump it 1-2% or so...so you are paying for the dealer to make money.

Mark114 02-02-2016 02:22 PM

Chevrolet's web site says they are currently offering 2.9% APR for 60 months on the 2016 Camaro. You might not have a local credit union but you can do some web research to see current rates for local banks, savings & loans, and credit unions. I always go in knowing my finance rate options and let the dealer try to beat the rate. If they can beat my best rate then I finance with their bank. So far I have had good experiences with this and only had one time where they couldn't beat my best rate.

SS 1LE 02-02-2016 02:24 PM

My credit union offers 1.9% on new car sales if you have a 750 or higher FICO score. I have used this, but I also give my dealer the opportunity to match it (less of a hassle). Sometimes they can, sometimes they can't. But them knowing you have that 1.9% in the bag sometimes makes them match it, as oppose to not getting your financing.

Eric SS 02-02-2016 02:27 PM

Quote:

Originally Posted by Mark114 (Post 8878185)
Chevrolet's web site says they are currently offering 2.9% APR for 60 months on the 2016 Camaro. You might not have a local credit union but you can do some web research to see current rates for local banks, savings & loans, and credit unions. I always go in knowing my finance rate options and let the dealer try to beat the rate. If they can beat my best rate then I finance with their bank. So far I have had good experiences with this and only had one time where they couldn't beat my best rate.

Great advise right here. Always go in with as good of a rate as you can find that you know you qualify for. If the dealer can beat it, great. If not, you know that it's a good rate you already got.

And like others have said, having a credit union is very nice.

Glen e 02-02-2016 03:00 PM

anyone can join a national credit union with Pen Fed - the credit union for pentagon employees, you can join with a simple donation to wounded warrior, etc...

Memphis43 02-02-2016 03:52 PM

Most dealerships have local credit unions they work with now as well.

The big thing to do is get a couple of different quotes.

Usually a dealership can get you pretty good rates depending on a couple of factors.

In the time I've been doing this I have only seen a couple of instances where the rate is better than what a dealer can get.

But shopping around for a rate helps you out in the long run.

I will say that if a dealer can match or beat the rate that you have acquired, that it would be kind of you to go with them although not something you have to do if you don't want obviously.


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Seawolf 02-02-2016 11:27 PM

Quote:

Originally Posted by M12LRV (Post 8878061)
I don't want to shop around at banks because they will pull my credit, and lower it and I don't have a credit union.

I would not worry so much about multiple inquiries lowering your credit. The way it works is that if you have a bunch of credit checks from multiple banks or credit unions for a car loan within a given time of each other, they all kind of roll into one. What I mean by that is that if you have 10 credit checks from different banks all within the same week, let's say, then it will not impact your credit any more than one check would have. It's done this way so that you don't "shotgun" your credit when shopping for rates.

CamaroJim56 02-03-2016 07:10 AM

Bought a new Explorer last Spring, told the dealer I could get "x" rate from my Credit Union, I said match it.... He beat it.

I think you have to give them a real number that is available to you, and they can usually beat it, if not, use your source.

I am sure they do get a kick back, but bet that they can get rates better than us, and pocket the difference.

63falcondude 02-08-2016 02:46 PM

You also have to take into account the acquisition fees that the dealer charges you if you finance through them. My father bought a used 2012 Laramie Longhorn and the acquisition fee was $697. They did beat his Credit Union's rate by 1%, so he went with the dealer.

Bassment 02-08-2016 03:37 PM

In Canada the dealers are by far the best way to go. I got 0.99%. Bank offered like 5% and same with credit union.

Glen e 02-08-2016 03:49 PM

Quote:

Originally Posted by Bassment (Post 8890244)
In Canada the dealers are by far the best way to go. I got 0.99%. Bank offered like 5% and same with credit union.

Are you sure about this? What institution did the dealer use? Sounds damn near impossible… if Credit unions were giving you 5%

bballr4567 02-08-2016 03:50 PM

Quote:

Originally Posted by M12LRV (Post 8878061)
How much higher are dealers rates than banks? I don't want to shop around at banks because they will pull my credit, and lower it and I don't have a credit union. What have you guys been doing?

That isn't quite the way it works. While, yes, they are pulling your credit and they are hard inquiries the credit companies treat those pulled within a certain time frame as only one credit pull. Do NOT be afraid to shop around.

63falcondude 02-09-2016 10:16 AM

Quote:

Originally Posted by bballr4567 (Post 8890267)
That isn't quite the way it works. While, yes, they are pulling your credit and they are hard inquiries the credit companies treat those pulled within a certain time frame as only one credit pull. Do NOT be afraid to shop around.

Different company's treat hard inquiries differently. Some look at them as one if they are within a certain time frame while others look at them individually.

Disclaimer: This is what my research has showed me, I do not know this for a fact.

bballr4567 02-09-2016 10:34 AM

Quote:

Originally Posted by 63falcondude (Post 8891754)
Different company's treat hard inquiries differently. Some look at them as one if they are within a certain time frame while others look at them individually.

Disclaimer: This is what my research has showed me, I do not know this for a fact.

Quote:

Looking for a mortgage, auto or student loan may cause multiple lenders to request your credit report, even though you are only looking for one loan. To compensate for this, FICO Scores ignore mortgage, auto, and student loan inquiries made in the 30 days prior to scoring. So, if you find a loan within 30 days, the inquiries won't affect your scores while you're rate shopping. In addition, FICO Scores look on your credit report for mortgage, auto, and student loan inquiries older than 30 days. If your FICO Scores find some, your scores will consider inquiries that fall in a typical shopping period as just one inquiry. For FICO Scores calculated from older versions of the scoring formula, this shopping period is any 14 day span. For FICO Scores calculated from the newest versions of the scoring formula, this shopping period is any 45 day span. Each lender chooses which version of the FICO scoring formula it wants the credit reporting agency to use to calculate your FICO Scores.
http://www.myfico.com/crediteducatio...inquiries.aspx

63falcondude 02-09-2016 12:56 PM

Quote:

Originally Posted by bballr4567 (Post 8891794)

Great link, a lot to learn there.

Only thing that I can see being a problem with multiple hard inquiries is if a company doesn't use the FICO score. It says "used by 90% of top lenders" which means that 10% of top lenders don't use it. If 10% of top lenders don't use FICO, how many non-top lenders also don't use FICO?

In the end I am probably over analyzing it. Just my $0.02

63falcondude 02-09-2016 01:16 PM

I have a decision to make so this thread should help with that. I will be going to the dealer today after work to update my sales agreement for my Credit Union. The dealer asked to run my credit to see if they can beat the rate. My CU rate is 2.99% for 72 months with no fees. I am assuming that the dealer will charge an acquisition fee if I finance through them and I don't think they will be able to beat 2.99%. In order to beat that rate, I am assuming that they will make multiple hard inquiries. What do you think? Should I give them the go-ahead?

bballr4567 02-09-2016 02:02 PM

It will be treated as ONE inquiry. Don't worry about it. Hell, I've got three hard inquiries in the last three months and it dropped my score 2 points. It's really over played. As long as you aren't trying to extend your credit by a crap ton you will be fine. Shop around. 2.99% is not that great of an APR if you have great credit.

63falcondude 02-09-2016 02:15 PM

Quote:

Originally Posted by bballr4567 (Post 8892307)
It will be treated as ONE inquiry. Don't worry about it. Hell, I've got three hard inquiries in the last three months and it dropped my score 2 points. It's really over played. As long as you aren't trying to extend your credit by a crap ton you will be fine. Shop around. 2.99% is not that great of an APR if you have great credit.

My FICO score is 746.

bballr4567 02-09-2016 02:19 PM

Then yea, you should get an excellent rate pretty much anywhere. I'd shop around.

63falcondude 02-09-2016 02:25 PM

Quote:

Originally Posted by bballr4567 (Post 8892344)
Then yea, you should get an excellent rate pretty much anywhere. I'd shop around.

I thought 2.99% was pretty good! I guess I'll let them see if they can beat it. You've convinced me. I made an excel spreadsheet to calculate how much more I pay over the life of the loan with different finance rates and acquisition fees.

G Fo12ce 02-09-2016 05:39 PM

Quote:

Originally Posted by 63falcondude (Post 8892359)
I thought 2.99% was pretty good! I guess I'll let them see if they can beat it. You've convinced me. I made an excel spreadsheet to calculate how much more I pay over the life of the loan with different finance rates and acquisition fees.

I just glanced at PedFed based on an above suggestion and their rate for your term of 72 months (assuming good credit) was 2.74%: LINK And FWIW I've heard the same things about multiple inquires like for auto loans for example are treated as one and don't effect your credit dramatically. Hope that helps you, definitely look around.

63falcondude 02-09-2016 08:35 PM

Just got back from the dealer. They beat the credit union by 0.6%! I also qualified for the concord rebate so I saved $1000. You guys are great, happy I was convinced to let the dealer try and beat it.

Now I got the car for $43,000 with 2.39% financing for 72 months. I am a happy man.

bballr4567 02-09-2016 09:14 PM

2.39% isnt that bad!!! If you are happy with it then go for it! Congrats!

bybcous 02-09-2016 09:27 PM

Quote:

Originally Posted by 63falcondude (Post 8892359)
I thought 2.99% was pretty good! I guess I'll let them see if they can beat it. You've convinced me. I made an excel spreadsheet to calculate how much more I pay over the life of the loan with different finance rates and acquisition fees.

You can get all that info by googling auto loan calculator

63falcondude 02-09-2016 09:31 PM

Quote:

Originally Posted by bballr4567 (Post 8893316)
2.39% isnt that bad!!! If you are happy with it then go for it! Congrats!

Thanks for your help!

63falcondude 02-09-2016 09:34 PM

Quote:

Originally Posted by bybcous (Post 8893342)
You can get all that info by googling auto loan calculator

I prefer to have it all in front of me so that I can manipulate it as I wish. I found that one calculator on total interest paid was off by about $30! I trust myself more than a website that I am unfamiliar with.

Z28 CPA 02-09-2016 09:56 PM

Another factor is if you desire GAP insurance, the dealer will likely charge much higher than you can get elsewhere.

koelek 05-16-2020 04:26 PM

Quote:

Originally Posted by Z28 CPA (Post 8893424)
Another factor is if you desire GAP insurance, the dealer will likely charge much higher than you can get elsewhere.

Yeah, you are right, I noticed that... That's why I don't use the dealer loan services, usually, I take a loan from a bank or a credit agency in order to pay for the car. The last time I bought a car, I applied for the loan on https://credit-10.com/fi/vivus-luotto/ and I found the conditions and the interest rate convenient for me. So, the interest rate is 6% and the pay off period is 50 months. Anyway, that offer was suitable for me and the more important is that now I have the car that I wanted.

UnknownJinX 05-16-2020 04:41 PM

Mine has a 5.99% annual interest rate and a 60-month term, but it's an open loan, meaning I could pay it off at any given time without any penalities or extra charges.

I just needed the settlement money from my totaled C7 to come in so that's why I got it. Now that the settlement is in, I can pretty much just pay it off any time I wish.

Redrado 06-16-2020 01:21 PM

Good 5 year rate from my dealer.
 
With excellent credit I qualified for 2.34 % rate. Just missed the zero percent promotion.

95 imp 06-16-2020 04:49 PM

Quote:

Originally Posted by koelek (Post 10791245)
Yeah, you are right, I noticed that... That's why I don't use the dealer loan services, usually, I take a loan from a bank or a credit agency in order to pay for the car. The last time I bought a car, I applied for the loan on https://credit-10.com/fi/vivus-luotto/ and I found the conditions and the interest rate convenient for me. So, the interest rate is 6% and the pay off period is 50 months. Anyway, that offer was suitable for me and the more important is that now I have the car that I wanted.

TOTAL SPAM! Don't click on it!

CamaroSS18 06-16-2020 05:16 PM

Same here, just qualified for the rate of either 2.25 for 72 or 2.5 for 84.

Mrbobcat 06-16-2020 06:43 PM

That's not bad, but I'm assuming you have to have at least 700 score or above?

CamaroSS18 06-16-2020 06:56 PM

Yes, you would have to have a good credit score. Also it was a credit union bank and not a national bank, so for some reason they always have the best rates. The dealer couldn't believe it and didn't even want to try and match it, the salesman even said the best rates they were getting were like 4.25.

kohli143 07-28-2020 04:19 AM

How bad are dealer loan rates?
 
How much higher are dealers rates than banks? I don't want to shop around at banks because they will pull my credit, and lower it and I don't have a credit union. What have you guys been doing?

jerryc231 07-28-2020 05:40 AM

Quote:

Originally Posted by Redrado (Post 10811746)
With excellent credit I qualified for 2.34 % rate. Just missed the zero percent promotion.

If there was any rebates 2.34 probably would be a better deal. Zero from dealer means they keep the rebates.. Have to look at total payoff

ember1205 07-28-2020 09:04 AM

Wow there is a lot of really incorrect information in this thread.

Paying an acquisition fee because you take a loan through a dealer? That's on you, not the dealer. Fees are fees, regardless of what they're called. You are 100% entitled to say no to them. There are certain fees that you simply aren't going to eliminate completely, but you have every right to shop different dealerships before you agree to a particular amount, and that amount can be negotiated just like the price of the car.

"I have great credit and almost qualified for 0%"? You don't have great credit. If you did, you would have qualified. Great credit and a great credit score are related, but aren't the same... It's also about marks on the report and your debt to income ratio.

When shopping for a car, you should start by knowing your own credit score and what that ultimately means for you in terms of where you are LIKELY to land when they pull your credit. You also need to understand how much cash you have available towards a downpayment (in addition to any trade-in amount) to ensure that you are financing a reasonable amount LESS than the value of the car. The closer to 100% you finance, the less wiggle room you have to be selective in dealers, loans, etc.

The next step is deciding on where to BUY the car because that includes things like how far you're traveling as well as what kind of price for the car you can negotiate. Focus on solidifying the ability to get the specific car you want at a price you like. If you have to make concessions (not your first color choice or has an extra option you don't necessarily want), then so does the dealer (better trade value, larger discount, etc.).

You can't get to this point, however, unless you have already done your research and understand your credit-worthiness. When you have a solid credit score and cash to put towards the deal, you can negotiate the terms of the loan as well as everything else. In 30 years of buying cars, I have used a Credit Union to finance a purchase exactly one time (and that was actually recently - Fall 2019). Credit Unions never offer better rates for me than what I can get elsewhere and rates through the dealerships for me are always the most aggressive because they want my loan business.

If you have really strong credit, find out what the prevailing rates are from the manufacturer and ask the Finance Manager the banks that tend to offer them the best rates and what those rates currently are (for your credit score). Also check with AAA to see what THEY can do to get you a decent rate (you don't have to be a member). Last fall, AAA linked me to a local credit union with a decent rate. I negotiated the rate with them BEFORE letting them pull my credit because it was essentially the same as the rate through the manufacturer (CPO) but would mean a fair amount more legwork for me. They agreed to beat the manufacturer rate provided they saw my credit report as being top tier.

The only time you will get a single hard inquiry against your credit report is when you file a loan application with exactly one lender directly. When I bought my car last fall, this is what happened because I was steered to a specific lender by AAA. This year, however, the rates through the dealership were better than what I could get on my own so I ended up with five hits so they could shop my loan app to get me the best rate.

Something else to understand is that your credit score can be represented in a variety of different ways using many different criteria. Mortgages use different criteria than auto loans, and credit cards use other details from both. There are a number of different scoring systems in use and you seldom know which one a particular bank will use (or how to research that version of your score ahead of time).

https://www.myfico.com/credit-educat...score-versions


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