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?

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!!

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.

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.

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.

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.

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...

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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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.

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.

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.

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%